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Exhibit 10.44 EXECUTION COPY   MERGER AGREEMENT among AMERIGROUP ACQUISITION CORP.
(Buyer) and AMERIGROUP CORPORATION
(Parent) and CAREPLUS, LLC
(Company) Dated as of October 26, 2004




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Exhibit 10.44 TABLE OF CONTENTS PageARTICLE I DEFINITIONS
    
    
    2Section 1.1 Certain Defined Terms
    
    
    2Section 1.2 Accounting Terms
    
    
    12Section 1.3 Company After Closing
    
    
    12ARTICLE II TRANSACTIONS
    
    
    12Section 2.1 Basic Transaction
    
    
    12Section 2.2 Purchase Price; Escrow; Audit
    
    
    13Section 2.8. Dissenting Shares
    
    
    17Section 2.2 Contingent Payment
    
    
    18Section 2.2 True Up of Claims
    
    
    20Section 2.4 Closing
    
    
    20ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLER
    
    
    21Section 4.1 Organization of Certain Sellers
    
    
    21Section 4.1 Authorization of Transaction
    
    
    21Section 4.1 Non-contravention
    
    
    22Section 4.1 Brokers Fees
    
    
    22Section 4.1 Membership Interests
    
    
    22Section 4.1 Disqualifying Background
    
    
    22ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY
    
    
    22Section 4.1 Organization
    
    
    22Section 4.2 Subsidiaries
    
    
    23Section 4.3 Capitalization
    
    
    23Section 4.4 Authorization; Validity of Agreement
    
    
    24Section 4.5 Consents and Approvals; No Violations
    
    
    24Section 4.6 Financial Information
    
    
    25Section 4.7 No Undisclosed Liabilities
    
    
    25Section 4.8 Employee Benefit Plans; ERISA
    
    
    25Section 4.9 Environmental, Health and Safety Matters
    
    
    26Section 4.10 Litigation
    
    
    27Section 4.11 No Default; Compliance with Applicable Laws
    
    
    27Section 4.14 No Bankruptcy
    
    
    28Section 4.14 Statutory Reserves
    
    
    28Section 4.14 Taxes
    
    
    28Section 4.15 Real Property
    
    
    29Section 4.16 Intellectual Property; Authorizations
    
    
    31Section 4.17 Material Agreements
    
    
    32Section 4.18 Providers and Provider Contracts
    
    
    33Section 4.18 Absence of Certain Changes or Events
    
    
    33Section 4.20 Labor Matters
    
    
    34Section 4.21 Insurance
    
    
    34Section 4.22 Employees
    
    
    35




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Exhibit 10.44 PageSection 4.23 Independent Contractors
    
    
    35Section 4.24 Relations and Members
    
    
    35Section 4.25 Books and Records
    
    
    35Section 4.26 Brokers or Finders
    
    
    35Section 4.27 Business Operations
    
    
    35Section 4.28 Powers of Attorney
    
    
    35Section 4.29 Guarantees
    
    
    35Section 4.30 Receivables
    
    
    36Section 4.31 Banks and Depositories
    
    
    36Section 4.32 Limitation on Use of Funds
    
    
    36Section 4.33 Terrorism Compliance
    
    
    36Section 4.34 Condition of Assets
    
    
    37Section 4.35 Standby Agreements
    
    
    37Section 4.36 Misstatements and Omissions
    
    
    37ARTICLE V REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT
    
    
    37Section 5.1 Organization
    
    
    37Section 5.2 Authorization; Validity of Agreement; Necessary Action
    
    
    37Section 5.3 Consents and Approvals; No Violations
    
    
    38Section 5.4 Brokers or Finders
    
    
    38Section 5.6 Litigation
    
    
    38Section 5.6 No Bankruptcy
    
    
    38Section 5.6 Disqualifying Background
    
    
    39Section 5.8 Misstatements and Omissions
    
    
    39ARTICLE VI COVENANTS
    
    
    39Section 6.1 Interim Operations of the Company
    
    
    39Section 6.2 Access to Information
    
    
    40Section 6.3 Maintenance of Certain Insurance
    
    
    41Section 6.4 Tax Matters
    
    
    41Section 6.5 Audited Financial Information
    
    
    42Section 6.6 Publicity
    
    
    43Section 6.7 Approvals and Consents; Cooperation; Notification
    
    
    43Section 6.8 Regulatory Filings
    
    
    44Section 6.9 Further Assurances
    
    
    44Section 6.10 Conditions
    
    
    44Section 6.11 Revised Disclosure Schedule
    
    
    44Section 6.12 New Contracts
    
    
    45Section 6.13 No Solicitation
    
    
    45Section 6.14 Collection of Receivables, Other Assets
    
    
    45Section 6.15 Meeting of Company Members
    
    
    45ARTICLE VIII TRANSITION
    
    
    46Section 8.1 Employees
    
    
    46ARTICLE VIII INDEMNIFICATION
    
    
    46Section 8.1 Basic Provisions
    
    
    46Section 8.2 Survival of Representations and Warranties
    
    
    48Section 8.3 Notice and Opportunity to Defend
    
    
    48Section 8.4 Payment of Deficiencies
    
    
    50




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Exhibit 10.44 PageARTICLE IX CONDITIONS
    
    
    50Section 9.1 Conditions to Each Partys Obligation to Effect the Closing
    
    
    50Section 9.2 Conditions to the Obligations of Buyer and Parent
    
    
    51Section 9.3 Conditions to the Obligations of Seller
    
    
    52ARTICLE X TERMINATION
    
    
    53Section 10.1 Termination
    
    
    53Section 10.2 Procedure and Effect of Termination
    
    
    54ARTICLE XI MISCELLANEOUS
    
    
    55Section 11.1 Governing Law and Consent to Jurisdiction
    
    
    55Section 11.2 Dispute Resolution
    
    
    55Section 11.3 Amendment and Modification
    
    
    56Section 11.4 Notices
    
    
    56Section 11.5 Interpretation
    
    
    58Section 11.6 Counterparts
    
    
    58Section 11.7 Entire Agreements; Third Party Beneficiaries
    
    
    58Section 11.7 Partial Invalidity
    
    
    58Section 11.9 Service of Process
    
    
    59Section 11.10 Specific Performance
    
    
    59Section 11.11 Assignment; Binding Agreement
    
    
    59Section 11.12 Expenses
    
    
    59Section 11.13 Waivers
    
    
    59Section 11.14 No Double Recovery
    
    
    60
 Company Disclosure Schedule
Buyer Disclosure Schedule Exhibits: A
    
    Company MembersB
    
    Escrow AgreementC
    
    Company Members Agreement for MergerD
    
    RESERVEDE
    
    Companys OpinionF
    
    Buyers OpinionG
    
    Company Members Closing Acknowledgment and ReleaseH
    
    RESERVEDI
    
    Company Members Agent Agreement




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MERGER AGREEMENT This MERGER AGREEMENT (this Agreement), dated as of October 26, 2004, is
entered into by and between CAREPLUS, LLC, a New York limited liability company
(the Company), AMERIGROUP ACQUISITION CORP., a New York corporation
(Buyer), and AMERIGROUP CORPORATION, a Delaware corporation (Parent). WITNESSETH: WHEREAS, the Persons listed on Exhibit A hereto (each a Company
Member and collectively, Company Members) are the record and beneficial
owners of 100% of the issued and outstanding Membership Interests of the
Company (the Membership Interests) and all Company Members executed and

delivered a Company Members Agreement for Merger in the form of Exhibit
C (the Support Agreement) (each a Signing Member and collectively the
Signing Members); WHEREAS, the Company conducts a health maintenance organization (HMO)
business currently licensed and operating in the State of New York pursuant to
a Special Purpose Certificate of Authority from the New York State Department
of Health (HMO License), which authorizes the Company to provide and arrange
for the provision of comprehensive health services for Members; WHEREAS, the Company (i) has entered into (a) the Medicaid Managed Care
Contracts with the New York City Department of Health and Mental Hygiene and
the Putnam County Department of Social Services, both effective October 1, 2004
(collectively, the Medicaid Contract), (b) the Child Health Plus Contract
effective July 1, 1998, amended June 9, 2000, December 3, 2001, January 31,
2002, January 6, 2003, December 22, 2003 and June 2, 2004 (the CHP Contract)
with the New York State Department of Health and (c) the Family Health Plus
Participating Managed Care Plan Agreement effective October 1, 2001, amended
October 1, 2002, April 1, 2003 and April 1, 2004 (the FHP Contract) with the
New York State Department of Health and (ii) is in the process of entering into
the Managed Long-Term Care Contract with the New York State Department of
Health (the Managed Long-Term Care Contract) (the Medicaid Contract, the CHP
Contract, the FHP Contract and the Managed Long-Term Care Contract,
collectively, the Payor Contracts); WHEREAS, under the Medicaid Contract, the Company is authorized to arrange
for the provision of comprehensive health services to Medicaid beneficiaries
enrolled in the Companys Medicaid managed care plan and has established,
throughout the Medicaid Enrollment Area and the Child Health/Family Health
Enrollment Area, a network of healthcare providers (as described, the Medicaid
Business); WHEREAS, in addition to the Medicaid Business, the Company operates a
Child Health Plus business in Kings, Queens and Richmond Counties, New York
pursuant to the CHP Contract (the CHP Business), a Family Health Plus
business in Kings, Queens and Richmond Counties, New York pursuant to the FHP
Contract (the FHP Business) and is developing a 1




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Exhibit 10.44 Managed Long-Term Care business pursuant to the Managed Long-Term Care
Contract (the Managed Long-Term Care Business) (the Medicaid Business, the
CHP Business, the FHP Business and the Managed Long-Term Care Business,
collectively, the Business); and WHEREAS, the Board of Managers of the Company and the Board of Directors
of Buyer each has determined that it is in the best interests of their
respective equity owners for Buyer to merge with and into the Company on the
terms and subject to the conditions set forth in this Agreement and in
accordance with the NY LLC Law so that the Company continues as the surviving
entity and has approved this Agreement. As a result of the Merger, Company
Members and Dissenting Members will receive the consideration, subject to the
claims, set forth in this Agreement. NOW, THEREFORE, in consideration of the representations, warranties,
covenants, agreements and conditions set forth in this Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties to this Agreement, intending to be legally bound,
agree as follows: ARTICLE I
DEFINITIONS Section 1.1 Certain Defined Terms. Unless the context otherwise
specifies or requires, the following terms have the meanings specified below: AAA has the meaning set forth in Section 11.2(c). Acquisition Proposal has the meaning set forth in Section 6.13. Affiliate means (i) any Person directly or indirectly controlling,
controlled by or under common control with another Person; (ii) any Person
owning or controlling ten percent (10%) or more of the outstanding voting
securities of such other Person; (iii) any officer, manager or director of such
Person; and (iv) if such Person is an officer, manager or director of another
company or entity, the company or entity for which such Person acts in such
capacity. Agent means the party appointed by the Company Members pursuant to the
Company Members Agent Agreement to represent their interests under this
Agreement and the Ancillary Agreements. Aggregate Consideration has the meaning set forth in Section 2.2(a). Agreement has the meaning set forth in the preface. Allocated Closing Cash Amount has the meaning set forth in Section
2.2(f)(ii)(1). Allocated Contingent Payment has the meaning set forth in Section
2.2(f)(ii)(3). Allocated Escrow Amount has the meaning set forth in Section
2.2(f)(ii)(2). 2




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Exhibit 10.44 Ancillary Agreements has the meaning set forth in Section 4.4. Arbitrators has the meaning set forth in Section 11.2(c). Asserted Liability has the meaning set forth in Section 8.3. Assets has the meaning set forth in Section 2.1(b). Audited 2005 Financial Statements has the meaning set forth in Section
2.3(b). Authorizations has the meaning set forth in Section 4.11(e). Bankruptcy means with respect to any Person: (i) the filing of an
application by such Person for, or its consent to, the appointment of a
trustee, receiver or custodian of its assets; (ii) the entry of an order for
relief with respect to such Person in proceedings under the United States
Bankruptcy Code, as amended or superseded from time to time; (iii) the making
by such Person of a general assignment for the benefit of creditors; (iv) the
entry of an order, judgment or decree by any court of competent jurisdiction
appointing a trustee, receiver or custodian of the assets of such Person; or
(v) the failure by such Person generally to pay its debts as the debts become
due within the meaning of Section 303(h)(1) of the United States Bankruptcy
Code or the admission in writing of its inability to pay its debts as they
become due. Benefit Plan has the meaning set forth in Section 4.8(a). Business has the meaning set forth in the Recitals. Business Day means a day, other than a Saturday or Sunday, on which
banking institutions in the City of New York are open for regular commercial
business. Buyer has the meaning set forth in the preface. Buyer Disclosure Schedule means the Buyers disclosure schedule, dated
as of the date of this Agreement, which shall be delivered by Buyer to the
Company and Agent as of the date of this Agreement. The Buyer Disclosure
Schedule will be arranged in paragraphs corresponding to the numbered Sections
of this Agreement. Certificate of Merger means the document delivered to the Department of
State evidencing the Merger in accordance with Section 1003 of the NY LLC Law. Child Health/Family Health Enrollment Area means the counties of Kings,
Queens and Richmond, New York within which an eligible person must reside in
order to enroll in either the Child Health Plus Contract or the Family Health
Plus Contract. CHP Business has the meaning set forth in the Recitals. 3




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Exhibit 10.44 CHP Contract has the meaning set forth in the Recitals. Claims has the meaning set forth in Section 2.4. Closing has the meaning set forth in Section 2.5(a). Closing Balance Sheet has the meaning set forth in Section 2.2(d)(v). Closing Book Value has the meaning set forth in Section 2.2(c). Closing Cash Amount has the meaning set forth in Section 2.2(a)(i). Closing Date has the meaning set forth in Section 2.5(a). Code means the Internal Revenue Code of 1986, as amended. Company has the meaning set forth in the preface. For purposes of this
Agreement, whenever Company is used, it shall mean the Company and
Intelli-dent. Company Disclosure Schedule means the Companys disclosure schedule,
dated as of the date of this Agreement, which shall be delivered by the Company
to Buyer as of the date of this Agreement, and thereafter updated (as permitted
hereunder) and delivered to Buyer at Closing. The Company Disclosure Schedule
will be arranged in paragraphs corresponding to the numbered Sections of this
Agreement. Company Members has the meaning set forth in the Recitals. Company Members Agent Agreement means the Members Agent Agreement in
the form attached as Exhibit I executed by the Signing Members. Companys Knowledge means (i) the actual knowledge of the following
executive officers of the Company: Chairman of the Board, President, COO, CFO
and General Counsel and (ii) the knowledge a reasonable business Person acting
in the capacity of Chairman of the Board, President, COO, CFO or General
Counsel, as applicable, would have obtained after making reasonable inquiry and
exercising reasonable diligence with respect to the matters at hand. Confidentiality Agreement means the Confidentiality Agreement dated June
22, 2004 by and between Buyer and the Company. Contest Notice has the meaning set forth in Section 8.3. Contingent MLTC Cash Amount has the meaning set forth in Section 2.2(a). Contingent Payment has the meaning set forth in Section 2.3(a). 4




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Exhibit 10.44 Contingent Payment EBITDA means, for the 12-month period following
Closing, the total premium revenues of the Company derived from the Medicaid
Business, the CHP Business and the FHP Business as determined in accordance
with GAAP, minus (1) total Medical Costs of the Company derived from the
Medicaid Business, the CHP Business and the FHP Business as determined in
accordance with GAAP, minus (2) an amount equal to 17.6% of the total premium
revenues of the Company derived from the Medicaid Business, the CHP Business
and the FHP Business as determined in accordance with GAAP. If Parent shall
merge the Company with another legal entity that has any business operations in
New York within 12 months following the Closing Date, the calculation of
Contingent Payment EBITDA shall be equal to the sum of (i) the actual
Contingent Payment EBITDA for the period before the effective date of the
merger and (ii) for the period on and after the effective date of the merger,
the amount for such period that was used in determining the EBITDA Target as
set forth on that certain EBITDA Target Budget dated October 19, 2004. Contracts means any written agreement relating to the operation of the
Business to which the Company is a party or by which it is bound, including all
amendments thereto. Department of State has the meaning set forth in Section 2.2(f). Dissenters Allocable Consideration has the meaning set forth in Section
2.2(g). Dissenters Withhold Amount has the meaning set forth in Section 2.2(g). Dissenting Member Claims has the meaning set forth in Section 8.1(a)(i). Dissenting Members has the meaning set forth in Section 2.2(g). DOH means New York State Department of Health. Earnout Period has the meaning set forth in Section 2.3(c). EBITDA Target has the meaning set forth in Section 2.3(a). Effective Time means 12:00 A.M., E.S.T., on the calendar day immediately
following the Closing Date, notwithstanding the Statutory Effective Date. Environmental, Health and Safety Requirements means all federal, state,
local and foreign statutes, regulations, and ordinances and similar provisions
having the force or effect of law, all judicial and administrative orders and
determinations, and all common law concerning public health and safety, worker
health and safety, and pollution or protection of the environment, including
without limitation all those relating to the presence, use, production,
generation, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control, or cleanup of any hazardous materials, substances or wastes,
chemical substances or mixtures, pesticides, pollutants, contaminants, toxic
chemicals, petroleum products or byproducts, asbestos, polychlorinated
biphenyls, noise or radiation. 5




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Exhibit 10.44 ERISA means the Employee Retirement Income Security Act of 1974, as
amended. Escrow Account means the bank account maintained by the Escrow Agent
pursuant to the Escrow Agreement into which all funds held by the Escrow Agent
are deposited and held. Escrow Agent means Wachovia Bank, N.A. or such other escrow agent as
mutually agreed by the parties. Escrow Agreement means the Escrow Agreement by and among Buyer, the
Company, Agent and Escrow Agent entered into at the Closing in the form of
Exhibit B attached hereto. Estimated EBITDA Amount has the meaning set forth in Section 2.3(b). Exchange Act has the meaning set forth in Section 6.5. FHP Contract has the meaning set forth in the Recitals. FHP Business has the meaning set forth in the Recitals. Final EBITDA Certificate has the meaning set forth in Section 2.3(b). Final Financial Statements has the meaning set forth in Section
2.2(d)(v). Financial Information has the meaning set forth in Section 4.6. Financial Statements has the meaning set forth in Section 6.5. Generally Accepted Accounting Principles or GAAP means principles,
consistently applied, which are consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors. GGK means Goldstein, Golub and Kessler. Governmental Entity means any court, legislative, executive or
regulatory authority or agency. HIPAA means the Health Insurance Portability and Accountability Act of
1996 and the regulations promulgated thereunder. HMO has the meaning set forth in the Recitals. HMO License has the meaning set forth in the Recitals. HSR Act means the Hart-Scott-Rodino Antitrust Improvements Act of 1976. IBNR has the meaning set forth in Section 2.4. 6




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Exhibit 10.44 Improvements has the meaning set forth in Section 4.15(d). Income Taxes means any Federal, state, local or foreign income or other
similar Tax. Income Tax Return means any Tax Return relating to Income Taxes. Indemnifying Party has the meaning set forth in Section 8.3. Indemnitee has the meaning set forth in Section 8.3. Independent Accountants means a firm of independent certified public
accountants of national reputation which has not performed audit services for
Buyer, the Company or any of their respective Affiliates during the
then-preceding three year period, which is selected by Buyer and Agent (or if
they cannot agree, by KPMG and GGK). Initial Notice has the meaning set forth in Section 11.2(b). Intellectual Property means all patents, trademarks, trade names,
service marks, service names, brand names, inventions, processes, formulae,
copyrights, trade dress, business and product names, logos, slogans, designs,
trade secrets, know how, industrial models, proprietary data, methodologies,
computer programs and software (including all source codes), all related rights
thereto and related documentation in whatever format, technical information,
manufacturing, engineering and technical drawings, operations manuals, quality
assurance manuals, HIPAA compliance programs and manuals, programs preapproved
by the DOH for the provision of Medicaid managed care coverage, contract forms
(including, without limitation, hospital provider agreement forms, primary care
provider agreement forms, specialty care provider agreement forms and ancillary
care provider agreement forms), know-how, inventions, works of authorship,
management information systems, and all pending applications for and
registrations of patents, trademarks, service marks and copyrights used or
owned by the Company. Intelli-dent means INTELLI-DENT IPA, INC., a New York corporation. Interim Period has the meaning set forth in Section 6.1. IRS means the Internal Revenue Service. KPMG means the accounting firm KPMG, LLP or such other Big-4 firm of
certified public accountants engaged by Buyer. Liabilities means all indebtedness, obligations and other liabilities of
the Company or Intelli-dent of any nature whatsoever, whether direct or
indirect, matured or unmatured, absolute,
accrued, contingent (or based on any contingency), known or unknown, fixed
or otherwise, or whether due or to become due. 7




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Exhibit 10.44 Loss or Losses has the meaning set forth in Section 8.1(a)(i). Managed Long-Term Care Business has the meaning set forth in the
Recitals. Managed Long-Term Care Contract has the meaning set forth in the
Recitals. Material Adverse Effect means any material and adverse effect (but
excluding any adverse effect attributable to changes in, or resulting from,
general economic, market, regulatory or political conditions or conditions
generally applicable to the healthcare or HMO industry in general, changes to
financial, banking or securities markets or in GAAP, changes resulting from
terrorism, acts of war or military actions, changes to Subpart 98-1 of Title 10
of N.Y. Comp. Codes R. & Regs. proposed as of the date hereof, the transactions
contemplated by this Agreement or the announcement thereof, any actions taken
at Buyers request, or Buyers operation of the Business) on the assets,
liabilities, financial condition, revenues, operating income, business or
operations of a party to this Agreement or the Business. Material Agreement(s) means each Contract or oral agreement and all
amendments thereto to which the Company is a party or by which it is bound that
(i) obligates the Company to pay or receive an amount in excess of $25,000 in
any 12-month period beginning after December 31, 2004; (ii) provides for a
guaranty by the Company of obligations of others in excess of $10,000; (iii)
constitutes an employment or consulting agreement terminable on more than 30
days notice; (iv) evidences any indebtedness or capital lease obligations; (v)
expressly limits in any material respect the ability of the Company to engage
in any business, compete with any Person or expand the nature or geographic
scope of its Business or (vi) is a Payor Contract or a Provider Contract. Medicaid Business has the meaning set forth in the Recitals. Medicaid Contract has the meaning set forth in the Recitals. Medicaid Enrollment Area means the boroughs of Brooklyn, Queens, Staten
Island and Manhattan, New York and Putnam County, New York. Medical Costs consist of all expenses incurred to provide medical
services to Members, including, but not limited to, fees paid to hospitals,
physicians and providers of ancillary medical services, such as pharmacy,
laboratory, radiology, dental and vision, and expenses related to services such
as health promotion, quality assurance, case management, disease management and
24-hour on-call nurses. Member means an individual enrolled in any of the Companys health plans
comprising the Medicaid Business, the CHP Business, the FHP Business and the
Managed Long- Term Care Business. A Member enrolled in the Companys Medicaid
Business is a Medicaid Member, a Member enrolled in the Companys CHP
Business is a CHP Member, a Member
enrolled in the Companys FHP Business is a FHP Member and a Member enrolled
in the Companys Managed Long-Term Care Business is a MLTC Member. 8




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Exhibit 10.44 Membership Interests means all of the Class A, Class B, Class C and
Class D membership interests of the Company, as such term is defined in the
Companys Operating Agreement. Membership Premium Threshold has the meaning set forth in Section
2.2(e). Merger has the meaning set forth in Section 2.1(a). Merger Consideration has the meaning set forth in Section 2.2(f). Minimum EBITDA Amount has the meaning set forth in Section 2.3(a). MMCOR means New York Medicaid managed care operating report. Net Worth means the amount expressed in terms of dollars by which the
Assets exceed the Liabilities, as determined in accordance with GAAP. NY LLC Law has the meaning set forth in Section 2.1(a). Operating Agreement means the Limited Liability Company Operating
Agreement of the Company dated as of May 19, 1995, as amended by First
Amendment dated December 1, 1995, and by Letter Agreement dated January 4,
1996. Parent has the meaning set forth in the preface. Payor Contracts has the meaning set forth in the Recitals. Payors means the New York State Department of Health, the New York City
Department of Health and Mental Hygiene, and Putnam County local department of
Social Services. PBGC means the Pension Benefit Guarantee Corporation. Percentage Interest means a Company Members percentage interest, as set
forth in column 4 of Schedule 3.5 of the Company Disclosure Schedule. Permits has the meaning set forth in Section 4.11(a). Permitted Encumbrances means (a) liens for Taxes not yet due or the
validity of which is being contested in good faith by appropriate proceedings;
(b) liens incurred in the ordinary course of business in connection with
workmens compensation laws, unemployment insurance, old-age pensions and other
social security benefits, (c) liens securing the performance of bids, tenders,
leases, contracts (other than for the repayment of debt), statutory
obligations, surety,
customs and appeal bonds and other obligations of a like nature, incident to
the ordinary course of business, (d) liens imposed by law, such as carriers,
warehousemens, mechanics, laborers and materialmens, landlords, suppliers
and vendors liens, incurred in good faith in the ordinary 9




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Exhibit 10.44 course of business
and (e) liens incidental to the conduct of the Business of the Company that
were not incurred in connection with the borrowing of money or the obtaining of
advances or credits. The Company Disclosure Schedule lists those Permitted
Encumbrances that are consensual and/or of which the Company has received
notice. Person means any individual, corporation, partnership, limited liability
company and any other legal entity or Governmental Entity. Pre-Closing Partial Period has the meaning set forth in Section 6.4(b). Preliminary Closing Book Value has the meaning set forth in Section
2.2(d)(i). Premium Revenue means premium revenue of the Company paid by Payors on a
capitated per Member per month basis for healthcare services provided to
Medicaid Members, CHP Members and FHP Members, but not including retroactive
adjustments, supplemental payments, interest and the like. Provider means any physician, hospital, pharmacy or other health care
professional, facility or supplier that has contracted to provide services,
prescription drugs or supplies to Members. Provider Contracts means any Contract between the Company and any
physicians, hospitals, pharmacies, pharmacy benefit management, ancillary
service providers or other health care service providers that participate in
the Business as Providers. Providers has the meaning set forth in the Recitals. Real Property has the meaning set forth in Section 4.15(b). Real Property Laws has the meaning set forth in Section 4.15(e). Receivables means all of the Companys trade accounts, receivables from
Payors, reinsurance receivables and claims against Providers. Review Period has the meaning set forth in Section 2.4. Securities Act has the meaning set forth in Section 6.5. Securities Filings has the meaning set forth in Section 6.5. Security Interests means any mortgages, liens, deeds of trust, security
interests, pledges, restrictions, prior assignments, charges, claims, defects
in title, restrictions on transfer,
taxes, options, warrants, purchase rights, demands and encumbrances of any kind
or type whatsoever. Settlement Agent has the meaning set forth in Section 11.2(b). 10




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Exhibit 10.44 Signing Member has the meaning set forth in the Recitals. Statutory Effective Time means the time that the Merger shall become
effective under Sections 1002 and 1003 of the NY LLC Law. Stub Period Financials has the meaning set forth in Section 2.3(b). Subsidiary means any entity with respect to which a specified Person (or
a Subsidiary thereof) owns a majority of the common stock or other equity
interests or has the power to vote or direct the voting of sufficient
securities to elect a majority of the directors or other managing body. Superior Claims has the meaning set forth in Section 8.2. Support Agreement has the meaning set forth in the Recitals. Survival Date means for all claims other than Superior Claims, the
shorter of (1) the date on which the applicable statute of limitations would
bar such claim or (2) 24 months after the Closing Date. Tangible Personal Property means the equipment, office materials and
supplies, tools, vehicles, computers, fixtures, improvements and furniture and
other tangible personal property owned, leased or otherwise used by the Company
and such other tangible personal property as is used in the conduct of the
Business. Taxes means any and all income, gross receipts, excise, real or personal
property, sales, withholding, social security, occupation, use, service,
service use, value added, license, net worth, payroll, franchise, taxes on
intangibles, transfer and recording taxes, fees, levies, charges and other
assessments, imposed by any federal, state, local or foreign government or any
subdivision or taxing agency thereof (including a United States possession),
whether computed on separate, consolidated, unitary, combined or any other
basis; and such term shall include any interest, penalties or additional
amounts attributable to, or imposed with respect thereto. Tax Escrow Set Aside has the meaning set forth in Section
2.2(b)(iii)(A). Tax Return means any return, document, declaration or other information
or filing required to be supplied to any taxing authority or jurisdiction
(foreign or domestic) with respect to Taxes. Transaction means the Merger and the related transactions described in
this Agreement. Transaction Documents has the meaning set forth in Section 4.4. True up Period has the meaning set forth in Section 2.4. 11




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Exhibit 10.44 True up Report has the meaning set forth in Section 2.4. Unaudited Closing Balance Sheet has the meaning set forth in Section
2.2(d)(i). Section 1.2 Accounting Terms. All terms of an accounting nature
not specifically defined herein shall have the respective meanings given to
them under GAAP. Section 1.3 Company After Closing. Any reference herein to the
Company with respect to a period or point in time after Closing shall include
Buyer and any reference herein to the Buyer with respect to a period or point
in time after Closing shall include the Company as successor to Buyer, if
required by the context. Notwithstanding anything to the contrary set forth
herein, Parent shall not merge the Company within three months following the
Closing. ARTICLE II
TRANSACTION Section 2.1 Basic Transaction. (a) On the terms and conditions of this Agreement and in accordance with
the New York Limited Liability Company Law, as amended (the NY LLC Law), at
the Statutory Effective Time, Buyer will be merged with and into the Company
(the Merger) pursuant to the terms and conditions of this Agreement and the
Certificate of Merger. As a result of the Merger, the separate corporate
existence of Buyer shall cease and the Company shall continue as the surviving
entity. Buyer and Parent are entering into this Agreement in conjunction with
the full execution of Support Agreements by Company Members holding 100 % of
the Membership Interests in the Company. The Company will continue to use best
efforts, and Buyer and Parent shall cooperate with such efforts, to obtain
Support Agreements from the Company Members who did not execute such agreements
on the date of this Agreement and will deliver a copy of any such Support
Agreement to Buyer and Parent when they are executed. (b) Buyer is merging with the Company with the understanding that the
Company owns or leases the properties and assets, real, personal and mixed,
tangible and intangible, of every type and description, which are used in the
operation of the Business, including, without limitation, the property and
assets which are acquired between the date hereof and the Closing Date and all
claims and rights of the Company of every kind relating to the ownership of the
Business, whether arising before, on or after the Closing Date, including
deposits, prepayments, refunds, causes of action, choses in action, rights of
recovery, rights of setoff, and rights of recoupment (collectively, the
Assets). (c) On the Closing Date, the Assets shall include cash, cash equivalents,
marketable securities, uncleared checks from third parties for good funds,
Receivables from Payors and other short-term investments in an aggregate amount
that shall not be less than: (i) the amount required to satisfy statutory net worth requirements
applicable to the Company (including, without limitation, deposits required of
the Company by the State of New York or otherwise required by New York statutes
and regulations or the 12




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Exhibit 10.44 Medicaid Contract, the CHP Contract, and the FHP
Contract or the Managed Long-Term Care Contract to be owned by the Company);
and (ii) the Companys accrued expenses, payables and other current
liabilities (as such term is used in accordance with GAAP). Section 2.2 Aggregate Consideration; Escrow; Audit. (a) Aggregate Consideration. (i) Subject to the terms and conditions set forth in this Agreement, the
Aggregate Consideration payable to the holders of 100% of the Membership
Interests by Parent shall be equal to the sum of: (A) One Hundred Twenty-Five
Million Dollars ($125,000,000), as adjusted pursuant to Sections 2.2(d)(ii), in
cash on the Closing Date (the Closing Cash Amount), and (B) up to an
additional Four Million Dollars ($4,000,000) if earned, as provided in Section
2.2(b)(ii) below (the Contingent MLTC Cash Amount), which will be paid to
Escrow Agent on the terms set forth in Section 2.2(b)(iii) below, and, if
applicable, which will be paid to Agent as provided in Section 2.2(b)(iii)
below. The Closing Cash Amount plus the Contingent MLTC Cash Amount, plus or
minus the adjustment described in Sections 2.2(d)(ii), 2.2(d)(iii),
2.2(d)(viii), 2.2(e) and 2.4, are collectively referred to herein as the
Aggregate Consideration. (ii) The Closing Cash Amount less the Dissenters Withhold Amount, if any,
shall be paid to Agent at Closing by wire transfer of immediately available
funds to an account specified by Agent to Parent. The Dissenters Withhold
Amount, if any, shall be deposited into the Escrow Account at Closing by wire
transfer of immediately available funds to an account specified by Escrow Agent
to Parent. Wire transfer instructions shall be specified in writing not less
than three (3) Business Days before the Closing. All other payments with
respect to the Aggregate Consideration shall be paid to Agent or Escrow Agent,
as the case may be, by wire transfer of immediately available funds to an
account specified by Agent or the Escrow Agent, as the case may be. (b) Escrow Account and Contingent MLTC Cash Amount. (i) Establishment of Escrow Account. At Closing, the Company shall
deposit Two Million Dollars ($2,000,000) into the Escrow Account which amount
shall be included in the Companys Net Worth. (ii) Contingent MLTC Cash Amount. If the Company receives approval
from, and a contract with, DOH to conduct the Managed Long-Term Care Business
in the State of New York and enrolls the first Member in the Managed Long-Term
Care Business during the first 24 calendar months after the Closing Date, then
Parent shall deposit the Contingent MLTC Cash Amount into the Escrow Account
within 30 days of Parents reasonable confirmation of such enrollment. (iii) Use of Escrow Account Funds. The Escrow Account funds (which
shall include the Contingent MLTC Cash Amount if payable pursuant to this
Section 2.2(b) and additional amounts contributed by Parent pursuant to this
Agreement) shall be used to satisfy 13




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Exhibit 10.44 Company Members liabilities, if any,
arising under Sections 2.2(d)(viii), 2.2(e), 2.4 and Article VIII, and shall be
paid to Company Members as set forth in this Section 2.2(b)(iii) below.
Notwithstanding anything to the contrary set forth in this Agreement, any
amounts that Parent is required to deposit into the Escrow Account pursuant to
any provision of this Agreement shall instead be paid directly to Agent for the
benefit of Company Members after the total amount paid into the Escrow Account
by Company and/or Parent under this Agreement equals $11 million plus
Dissenters Withhold Amount, if any. (A) All funds remaining in the Escrow Account, less a One Million Dollar
($1,000,000) reserve (the Tax Escrow Set Aside) for liabilities hereunder,
shall be paid by Escrow Agent to Agent for the benefit of Company Members on
the last day of the 24th calendar month following the Closing Date, provided,
however,that such funds shall not be paid to Agent to the extent necessary to
satisfy any then-pending claims made by Company as successor to Buyer or Parent
in good faith under Article VIII. (B) On the last day of the thirty sixth month (plus any additional period
that the statute of limitations is extended by the Company as reasonably agreed
to by Agent) following the filing by the Company of the last to be filed of
federal, state and local Tax Returns by the Company with respect to the taxable
period ending on the Closing Date, Escrow Agent shall pay to Agent for the
benefit of Company Members all remaining amounts in the Escrow Account, less an
amount necessary to satisfy any then-pending claims made by Company as
successor to Buyer or Parent in good faith under Article VIII. (C) If funds otherwise payable to Agent from the Escrow Account pursuant
to this Section 2.2(b) are, instead, retained by the Escrow Agent because of
the existence of then-pending claims made by Company as successor to Buyer or
Parent in good faith under Sections 2.2(d), 2.2(e), 2.4 and Article VIII, then
Escrow Agent shall release such funds to Buyer or Agent, as the case may be,
upon final resolution of the claims within the period set forth under Section
2.2(d)(viii), 2.2(e), Section 2.4 or Article VIII, as extended under such
provisions. (c) Closing Book Value. Closing Book Value means the Companys
Net Worth at the Closing Date (whether or not positive), as determined in
accordance with GAAP. In determining Closing Book Value, the operation of the
Business and the income and normal operating expenses attributable thereto
through the Closing Date shall be reflected in the Closing Book Value as of the
end of the Closing Date. Revenues and expenses for services rendered or
services received both before and after the Closing Date, Taxes, power and
utilities charges, bonuses, wages, rents and similar prepaid and deferred items
shall be prorated as of the Effective Time and so reflected in the Closing
Book Value in accordance with GAAP. 14




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Exhibit 10.44 (d) Audit. (i) Not less than two (2) Business Days before the Closing Date, the
Company shall deliver to Buyer and Parent a balance sheet (Unaudited Closing
Balance Sheet) for the Company, which shall be prepared from the books and
records of the Company in accordance with GAAP and represent the Companys best
efforts to estimate the Closing Book Value as of the Closing Date (Preliminary
Closing Book Value). (ii) If the Unaudited Closing Balance Sheet shows (i) a Preliminary
Closing Book Value of less than Twenty Million Dollars ($20,000,000), then
Parent shall reduce the Closing Cash Amount and the Aggregate Consideration
shall decrease, by an amount equal to the difference between Twenty Million
Dollars ($20,000,000) and the Preliminary Closing Book Value. (iii) If the Unaudited Closing Balance Sheet shows a Preliminary Closing
Book Value of more than Twenty Million Dollars ($20,000,000), then the Closing
Cash Amount and the Aggregate Consideration shall increase by the excess of the
Preliminary Closing Book Value over Twenty Million Dollars ($20,000,000) and
such amount shall be deposited by Parent into the Escrow Account. (iv) Within 60 days after the Closing Date, Parent shall cause the Company
to prepare and deliver to GGK, Agent and Parent consolidated financial
statements of the Company for the period from the first day of the fiscal year
that includes the Closing Date through the Closing Date, including, a balance
sheet as of the Closing Date, an income statement for the period from the first
day of the fiscal year that includes the Closing Date through the Closing Date,
related footnotes and supporting schedules prepared in accordance with GAAP.
Through March 31, 2005, Parent will fully cooperate with GGK in filing the 2004
MMCOR for the Company. (v) Within 90 days after the Closing Date, Parent will cause GGK to
deliver to Agent and Parent the final audited consolidated financial statements
of the Company for the period from the first day of the fiscal year that
includes the Closing Date through the Closing Date, including a balance sheet
as of the Closing Date (the Closing Balance Sheet) and income statements for
the period from the first day of the fiscal year that includes the Closing Date
through the Closing Date, related footnotes and supporting schedules prepared
in accordance with GAAP (the Final Financial Statements). The cost for such
audited financials
shall be accrued on the Closing Balance Sheet. Such financial statements
shall be audited by GGK in accordance with generally accepted auditing
standards. (vi) Immediately upon receipt of the Final Financial Statements, Parent
will review such financial statements to determine, with the assistance of
KPMG, the accuracy of such financial statements and that they were prepared in
accordance with GAAP and suggest any adjustments thereto. GGK will provide
Parent and KPMG access to their work papers, provided KPMG signs the customary
work paper access letter utilized in the public accounting industry. (vii) Within 120 days after the Closing Date, Parent shall deliver to
Agent Parents conclusion of the accuracy of the Final Financial Statements and
Closing Balance 15




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Exhibit 10.44 Sheet and the recomputation of the Closing Book Value. Within
30 days of receipt of such conclusion, Parent and Agent will either agree to
accept the Closing Balance Sheet or shall submit the dispute to an Independent
Accountant in accordance with Section 11.2 below. Once accepted by the parties
or on the issuance of a determination by the Independent Accountant, the
Closing Balance Sheet will be deemed final and binding on the parties. (viii) If the Final Financial Statements show that the Closing Book Value
differs from the Preliminary Closing Book Value, then within five Business Days
after the Closing Balance Sheet is deemed to be final as set forth in Section
2.2(d)(vii) above, (A) the Escrow Agent shall distribute to Parent the amount,
if any, by which the Closing Book Value is less than the Preliminary Closing
Book Value; or (B) Parent shall deposit the amount, if any, by which the
Closing Book Value exceeds the Preliminary Closing Book Value to the Escrow
Account. Notwithstanding any provision of this Agreement to the contrary, if
Parent is entitled to a Payment from Escrow Account under any provision of this
Agreement but the funds in the Escrow Account are insufficient to make such
payment, Parents claim shall continue and be paid when additional funds are
deposited into the Escrow Account from any source; provided, nevertheless, that
no claim asserted by Parent or Buyer shall be paid from funds deposited in the
Escrow Account in excess of the first $11,000,000 of such deposits exclusive of
Dissenters Withhold Amount deposited to the Escrow Account by Agent, Parent,
Buyer, Company Member or Company which excess shall not be subject to Parent or
Buyer claims for any reason. (e) Aggregate Consideration Adjustment. The $125,000,000 provided
for in Section 2.2(a)(i) is based on the Company having Premium Revenue equal
to $16.53 million (the Membership Premium Threshold) for the full calendar
month including the Closing Date (the Final Month). The Companys Premium
Revenue for the Final Month shall be determined by the Parent within 90 days of
the Closing Date and the computation thereof together with supporting work
papers shall be delivered by Parent to Agent as such time, whereupon it will be
subject to the review and resolution provisions of Section 2.2(d). If the
Companys Premium Revenue for the Final Month is less than the Membership
Premium Threshold, then the $125,000,000 shall be adjusted to an amount equal
to the product of the $125,000,000 and the actual Premium Revenues divided by
the Membership Premium Threshold and Escrow Agent shall pay $125,000,000 minus
such adjusted amount to Parent at the time required by Section 2.2(d)(viii).
If the Companys Premium Revenue for the Final Month exceeds the Membership
Premium Threshold, then the $125,000,000 shall be adjusted to an amount equal
to the product of the $125,000,000 and the actual Premium Revenues divided by
the Membership Premium Threshold and Parent shall deposit such adjusted
amount in excess of the $125,000,000 into the Escrow Account at the time
required by Section 2.2(d)(viii). (f) Consummation and Effect of Merger. The parties shall cause the
Merger to be consummated by filing duly executed Certificate of Merger with the
New York State Department of State (the Department of State), in such form as
Buyer and Agent reasonably determine is required by, and is in accordance with,
the relevant provisions of the NY LLC Law (Certificate of Merger). The
Merger shall become effective at the Statutory Effective Time and the Merger
shall have the effect set forth in the NY LLC Law. The Company may, at any
time after the Statutory Effective Time, take any action (including executing
and delivering any document) in the name and on behalf of either the Company or
Buyer to carry out and effectuate the transactions contemplated by this
Agreement. At the Statutory Effective Time by virtue of 16




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Exhibit 10.44 the Merger and without
any action on the part of the Company, Parent, Buyer, or the Company Members,
the following actions will occur: (i) each issued and outstanding share of Buyer (which shall have 100
issued and outstanding shares at Closing) shall be converted into a 1%
membership interest of the Company (which will be the surviving entity of the
Merger); (ii) each Membership Interest (except for those Membership Interests held
by Dissenting Members) shall automatically be cancelled and cease to exist and
shall be converted into the right for the holder of such Membership Interest to
receive, in cash, an amount equal to the sum of the following:  (1)
    an amount equal to its
pro rata share (based on its Percentage Interest)
of the Closing Cash Amount minus any Dissenters
Withhold Amount (the Allocated Closing Cash
Amount);(2)
    an amount equal to its
pro rata share (based on its Percentage Interest)
of the funds in the Escrow Account distributed to
or for the benefit of Company Members (the
Allocated Escrow Amount); and(3)
    an amount equal to its
pro rata share (based on its Percentage Interest)
of the portion of the Contingent Payment not
deposited into the Escrow Account by Parent (the
Allocated Contingent Payment);in each case rounded to the nearest whole cent (the
Merger Consideration). The Merger Consideration
shall be paid to the Agent for the benefit of Company
Members, to be distributed to Company Members in
accordance with their Percentage Interest upon receipt
of documentation as reasonably required by the Agent. (g) Dissenting Shares; Waiver of Dissenters Rights.
Notwithstanding any other provision of this Agreement to the contrary,
Membership Interests that are issued and outstanding immediately before the
Statutory Effective Time and which are held by Company Members (i) who shall
have not voted in favor of the Merger or consented thereto in writing, and (ii)
who shall have delivered a written notice of dissent from the proposed Merger
in accordance with Section 1002(e) of the NY LLC Law and otherwise perfected
their rights under Section 1002(e) of the NY LLC Law shall be converted into
and represent the right to receive a portion of the Aggregate Consideration and
shall be deemed cancelled. Such Company Members (the Dissenting Members)
shall be entitled to only receive payment of the value of such Membership
Interests held by them in accordance with the provisions of the NY LLC Law,
except that all Membership Interests held by members who shall have failed to
perfect or who effectively shall have withdrawn or lost their rights to
appraisal of such Membership Interests pursuant to relevant provisions of the
NY LLC Law, shall thereupon be deemed to have been 17




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Exhibit 10.44 converted into and to have
become exchangeable, as of the Statutory Effective Time, for the right to
receive, without any interest thereon, such members allocated share of the
Aggregate Consideration. The Company shall comply with Section 1005 of the NY
LLC Law. Notwithstanding any other provision of this Agreement to the
contrary, Parent shall withhold from payment of the Closing Cash Amount payable
to Agent for the benefit of Company Members hereunder and instead pay to Escrow
Agent, 200% of the Dissenting Members Percentage Interests times $120,000,000
(the Dissenters Withhold Amount). Escrow Agent shall hold the Dissenters
Withhold Amount until such time as the Dissenting Member and Agent agree to
settle the dispute or the final, unappealable amount of payment is determined
for the Dissenting Members Membership Interests under the NY LLC Law, at which
time Agent shall distribute (A) such amount (Dissenters Allocable
Consideration) to the Dissenting Members in accordance with the NY LLC Law,
(B) any Losses for which Dissenting Member is responsible under Section
8.1(a)(ii)(B) to the Parent, and (C) the balance to the Agent for distribution
to Signing Members pro rata in accordance with their Percentage Interests. (h) Adjustments to Merger Consideration. On any reclassification,
membership interest split, membership interest dividend (including any dividend
or distribution of securities convertible into membership interests,
reorganization, recapitalization or other like change with respect to
membership interests occurring (or for which a record date is established))
after the date hereof and before the Statutory Effective Time, the Merger
Consideration shall be proportionately adjusted to reflect fully such event. (i) No Further Ownership Rights in Membership Interest. The
Aggregate Consideration paid or to be paid to Agent on behalf of Company
Members on the Closing Date shall be deemed to have been paid in full
satisfaction of all rights pertaining to such Membership Interests, and from
and after the Statutory Effective Time there shall be no further registration
of transfers on the books of Company of Membership Interests which were
outstanding immediately before the Statutory Effective Time. Section 2.3 Contingent Payment. (a) As additional consideration for the Merger, Parent shall pay an
additional amount to Company Members (the Contingent Payment) as follows:
(i) if Contingent Payment EBITDA exceeds $11,200,000 (the Minimum EBITDA
Amount), but is less than $21,200,000 (the EBITDA Target), then the
Contingent Payment shall be the amount by which Contingent Payment EBITDA
exceeds the Minimum EBITDA Amount and (ii) if Contingent Payment EBITDA is
equal to or greater than the EBITDA Target, then the Contingent Payment shall
be $10,000,000. (b) By no later than the last day of the fourth month following the
one-year anniversary of the Closing Date, Parent shall deliver to Agent a
certificate (the Final EBITDA Certificate), verified for accuracy and signed
by Parent chief financial officer, (i) attaching the financial statements of
the Company for 2005 as audited by KPMG including, among other statements and
schedules, an income statement, notes thereto and KPMGs report thereon (the
Audited 2005 Financial Statements) plus the Companys unaudited financial
statements for any period in 2006 needed to include the one-year anniversary of
the Closing Date (Stub Period Financials) and (ii) setting forth Parents
calculation of Contingent Payment EBITDA based 18




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Exhibit 10.44 upon the Audited 2005 Financial
Statements and Stub Period Financials (the Estimated EBITDA Amount). If,
within 30 days after the Final EBITDA Certificate is delivered to Agent, Agent
shall not have given written notice to Parent setting forth in detail any
objection to the Estimated EBITDA Amount, then such Estimated EBITDA Amount
shall be the Contingent Payment EBITDA for purposes of this Agreement and shall
be final and binding on the parties hereto and Parent shall immediately deposit
into the Escrow Account and pay to Agent for the benefit of Company Members, as
provided in Section 2.3(d) below, the Contingent Payment based on the Estimated
EBITDA Amount. If, within such 30-day period, Agent shall give written notice
to Parent setting forth in reasonable detail any objection to the Estimated
EBITDA Amount, Parent and Agent shall endeavor to reach agreement within the
30-day period following the receipt by Parent of the notice of objection. If
the parties shall reach agreement on the objections of Agent, then the
Estimated EBITDA Amount as adjusted by the parties shall become Contingent
Payment EBITDA for purposes of this Agreement and Parent shall immediately
deposit into the Escrow Account and pay to Agent for the benefit of Company
Members, as provided in Section 2.3(d) below, the Contingent Payment as
calculated based on such Contingent Payment EBITDA. If the parties are unable
to reach agreement within such 30-day period, then the matter shall be
submitted as soon as practicable to the Independent Accountants for
determination of Contingent Payment EBITDA, in which case the determination of
the Independent Accountants shall be final and binding on the parties and such
amount shall become Contingent Payment EBITDA for purposes of the remainder of
this Agreement, and Parent shall immediately deposit into the Escrow Account
and pay to Agent for the benefit of Company Members, as provided in Section
2.3(d) below, the Contingent Payment. The parties (and their professional
advisors) shall cooperate with one another in furtherance of determining
Contingent Payment EBITDA, and the parties shall make their books and records
and personnel reasonably available, and Parent shall make the work papers
utilized by KPMG (provided the customary work paper access letter utilized in
the public accounting industry is executed and delivered to KPMG) and shall
make KPMG reasonably available, in furtherance of making such
determination. In connection with the resolution of any dispute, each
party shall pay its own fees and expenses, including, without limitation,
legal, accounting and consultant fees and expenses. If Contingent Payment
EBITDA as determined by the Independent Accountants is greater than the
Estimated EBITDA Amount, then the cost and expense of the Independent
Accountants shall be paid by Parent. If Contingent Payment EBITDA as
determined by the Independent Accountants is less than the Estimated EBITDA
Amount, then the cost and expense of the Independent Accountants shall be
shared equally by Parent and Company Members. Such payment shall be made by
wire transfer of immediately available funds to an account or accounts
specified by Agent and Parent, as applicable. (c) Parent hereby covenants and agrees that, except as provided in Section
1.3, during the period beginning on the Closing Date and continuing through the
one year anniversary of the Closing Date (the Earnout Period), Parent shall
continue the operations of the Company as a separate incorporated subsidiary of
Parent and shall conduct the Business and operations of the Company in good
faith using all commercially reasonable efforts to cause the Company to meet
the EBITDA Target. Without limiting the generality of the preceding sentence,
Parent shall, during the Earnout Period, except as may otherwise be agreed upon
in writing by Agent, (i) use commercially reasonable efforts to maintain the
Companys Providers, Members, Provider and Member relationships and Material
Agreements, (ii) make available to 19




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Exhibit 10.44 the Company capital sufficient for the
Companys working capital purposes and other business needs and (iii) use
commercially reasonable efforts not to reduce the geographical scope of the
business of the Company. Parent further agrees to deliver to Agent quarterly
statements of Contingent Payment EBITDA in a format mutually agreed upon by
Parent and Agent. If Parent fails to comply with the provisions of this
Section 2.3(c), there shall be a dollar-for-dollar adjustment with respect to
any reduction in Contingent Payment EBITDA caused by such failure by Parent. (d) A portion of the Contingent Payment in an amount equal to $3,000,000
less the amount by which the Closing Book Value exceeds $21,000,000, if any,
shall be deposited by Parent into the Escrow Account. The remainder of the
Contingent Payment shall be paid to Agent for the benefit of Company Members. Section 2.4 True Up of Claims. On and through the
15th-month anniversary of the Closing Date (the True Up Period), Parent shall
recalculate the Tax liabilities and the liabilities for Medical Costs of the
Company, including, without limitation, incurred, but not reported claims
(IBNR) (collectively, Claims) as of the Closing Date (considering the
post-Closing experience of the Company related to such pre-Closing Claims).
The Company will send to Agent within 60 days of the end of the True Up Period
its computation as to the amount of Claims as of the Closing Date, together
with its work papers used to compute the amount of Claims (the True Up
Report). Within 30 days of receipt of the True Up Report (the Review
Period), Agent will either accept the True Up Report or provide Company with
written specific objections to such report. If Agent does not accept the True
Up Report as presented, the parties shall submit the dispute to the Independent
Accountant in accordance with Section 11.2 below, in which case the
determination of the Independent Accountant shall be final and binding on the
parties. If Agent accepts the True Up Report as presented, then at the end of
the Review Period, the True Up Report will be deemed final and binding on the
parties. Within five Business Days after the True
Up Report becomes final, Escrow Agent shall pay Parent the amount, if any,
of Claims as set forth in the True Up Report in excess of the amount of Claims
in the Closing Balance Sheet. Within five Business Days after the True Up
Report becomes final, Parent shall deposit into the Escrow Account the amount,
if any, by which the Claims in the Closing Balance Sheet exceed the amount of
Claims in the True Up Report. Section 2.5 Closing. (a) The Merger contemplated by this Agreement shall take place at a
closing (the Closing) to be held at the offices of Williams Mullen, 222
Central Park Avenue, Suite 1700, Virginia Beach, Virginia or, as agreed by the
parties, on the Statutory Effective Date, by exchange of facsimile signature
pages on the day before Closing Date (followed by overnight delivery of
originals) and funding on the last day of the calendar month which is at least
five Business Days following the satisfaction or waiver of the last to occur of
the conditions to the obligations of the parties set forth in Article IX, or at
such other place, time or date on which Agent and Buyer may mutually agree in
writing (the day on which the Closing takes place being the Closing Date).
The parties intend to close on or before December 31, 2004 and shall exercise
commercially reasonable efforts to do so. 20




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Exhibit 10.44 (b) At the Closing, Agent shall, subject to the satisfaction of the
conditions set forth in Article IX, deliver or cause to be delivered to Buyer
and Parent (i) certificates representing the Membership Interests of all
Signing Members and (ii) all other documents and certificates required under
Article IX of this Agreement to be delivered by Agent or Company Members to
Buyer and Parent at or before the Closing Date in connection with the
transactions contemplated hereby. No interest will be paid or accrued on any
sums payable to holders of Membership Interests. Until surrendered in
accordance with the provisions of this Section 2.5(b), each Membership Interest
(other than those held by Dissenting Members) shall represent for all purposes
only the right to receive the Merger Consideration provided for by this
Agreement, without interest. (c) At the Closing, Buyer and Parent shall, subject to the satisfaction of
the conditions set forth in Article IX, (i) deliver to Agent the Closing Cash
Amount less the Dissenters Withhold Amount, if any, and deliver to Escrow
Agent the Dissenters Withhold Amount, if any, by wire transfer in immediately
available funds to an account specified by Agent or Escrow Agent, as
applicable, and (ii) deliver to Agent all other documents and certificates
required under Article IX of this Agreement to be delivered by Buyer or Parent
to Agent at or before the Closing Date in connection with the Transaction. Section 2.6 Interest. Interest accrued on the Escrow Account shall
be paid as follows: (a) Except as provided in Section 2.6(b) below, the interest attributable
to funds in the Escrow Account shall be paid to Company Members. (b) To the extent funds in the Escrow Account are used to pay any
post-Closing audit adjustments pursuant to Section 2.2(d)(viii) and/or Section
2.4 above, the interest attributable to such funds shall be paid to Buyer. ARTICLE III
REPRESENTATIONS AND WARRANTIES OF COMPANY MEMBERS Each Company Member represents and warrants to Buyer and Parent solely
with respect to that Company Member individually that: Section 3.1 Organization of Certain Company Members. If
Company Member is an entity, Company Member is duly organized and validly
existing under the laws of its jurisdiction of organization. Section 3.2 Authorization of Transaction. Company Member has
all requisite power and authority (including, if Company Member is an entity,
all requisite company power and authority) to execute and deliver this
Agreement and to perform Company Members obligations hereunder. This
Agreement constitutes the valid and binding obligation of such Company Member,
enforceable in accordance with its terms. Company Member need not give any
notice to, make any filing with, or obtain any authorization, consent, or
approval of any Governmental Entity in order to consummate the Transaction. 21




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Exhibit 10.44 Section 3.3 Non-contravention. The execution and delivery
of this Agreement, and the consummation of the Transaction contemplated hereby,
will not (A) violate any law, regulation, rule, injunction, judgment, order,
decree, ruling, charge, or other restriction of any Governmental Entity to
which Company Member is subject or, if Company Member is an entity, any
provision of its charter, bylaws or other organizational documents or (B)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate,
modify, or cancel, or require any notice under any material agreement,
contract, lease, license, instrument, or other arrangement to which Company
Member is a party or by which Company Member is bound or to which any of
Company Members assets are subject. Section 3.4 Brokers Fees. Except for fees payable to Banc
of America Securities, whose fees shall be paid solely by Company Members, or
Company Members shall cause Agent to pay such fees on their behalf, Company
Member has no liability or obligation to pay any fees or commissions to any
broker,
finder, or agent with respect to the Transaction for which Buyer could
become liable or obligated. Section 3.5 Membership Interests. Company Member owns of
record and beneficially the Membership Interest set forth next to Company
Members name on the Company Disclosure Schedule free and clear of any Security
Interests except for the Operating Agreement. The Percentage Interest
represented by the Membership Interest as set forth on the Company Disclosure
Schedule is the percentage of aggregate consideration to which Company Member
is entitled under the Merger Agreement and the voting percentage Company Member
has with respect to actions requiring approval by the Company Members under the
Operating Agreement. Company Member is not a party to any option, warrant or
purchase right, or other contract or, except as provided in the Operating
Agreement, any commitment that could require Company Member to sell, transfer,
or otherwise dispose of Company Members Membership Interest (other than this
Agreement). Company Member is not a party to any voting trust or proxy, or,
except as provided in the Operating Agreement, any other agreement or
understanding with respect to the voting of Company Members Membership
Interest. On consummation of the Merger, Company Member shall have no further
right, title and interest in Company Members Membership Interest. Section 3.6 Disqualifying Background. Company Member has
never been debarred, suspended, or otherwise excluded from participating in any
state or federally funded healthcare program. Company Member is not party to
any agreement, judgment, order, consent, or equitable relief, written or oral,
that would limit or restrict the Company in any manner from conducting the
Business. ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company represents and warrants to Buyer and Parent that, except as
set forth in the Company Disclosure Schedule, each of the following statements
are correct and complete. Section 4.1 Organization. The Company is a limited liability
company duly organized and validly existing under the laws of the State of New
York. The Company has all requisite 22




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Exhibit 10.44 power and authority to own, lease and
operate its properties and to carry on the Business as it is now being
conducted. The Company is duly qualified or licensed to do business and is in
good standing in each jurisdiction in which the nature of the property owned,
leased or operated by it or the nature of the business conducted by it requires
it to be so qualified. The Company has made available to Buyer a complete and
correct copy of the articles of organization and Operating Agreement of the
Company. Section 4.2 Subsidiaries. The Companys sole Subsidiary is
Intelli-dent and the Company owns 100% of the capital stock of Intelli-dent.
The authorized and issued capital stock of Intelli-dent is set forth on the
Company Disclosure Schedule. All of the issued and outstanding shares of
capital stock of Intelli-dent have been duly authorized and are validly issued,
fully paid, and nonassessable. The Company
owns of record and owns beneficially its shares of Intelli-dent free and
clear of any restrictions on transfer, Taxes, Security Interests, claims, and
demands, except for Permitted Encumbrances as provided in the Company
Disclosure Schedule. There are no outstanding or authorized options, warrants,
purchase rights, subscription rights, conversion rights, exchange rights, or
other contracts or commitments that could require the Company to sell,
transfer, or otherwise dispose of any capital stock of Intelli-dent or that
could require Intelli-dent to issue, sell, or otherwise cause to become
outstanding any of its capital stock. There are no outstanding stock
appreciation, phantom stock, profit participation, or similar rights with
respect to Intelli-dent. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of any capital stock of
Intelli-dent. The Company does not control, directly or indirectly, and does
not have any direct or indirect equity participation in any corporation,
partnership, trust or other business association other than Intelli-dent. Section 4.3 Capitalization. (a) The Company has issued Membership Interests which are owned in classes
as set forth on the Company Disclosure Schedule and which will constitute 100%
of the membership and equity interests of any nature whatsoever of the Company
at the Closing Date. The total Membership Interests listed on the Company
Disclosure Schedule are the Percentage Interests relating to the Membership
Interests. Each Company Members voting rights are equal to the total
Membership Interest for such Member listed on the Company Disclosure Schedule
and there are no differences in voting or other rights relating to the
Transaction, this Agreement or the Ancillary Agreements among classes A, B, C
and D Membership Interests. The total Membership Interests listed on the
Company Disclosure Schedule represents the percentage of Aggregate
Consideration to which the named holder of such interest is entitled. All of
the outstanding Membership Interests are duly authorized, validly issued, fully
paid, nonassessable and free of preemptive rights and are owned by Company
Members, Non-Signing Members and any Dissenting Members. There are no (i)
options, warrants, calls, subscriptions or other rights, convertible
securities, agreements or commitments of any character obligating the Company
to issue, purchase, transfer or sell any Membership Interests or other
membership or equity interests in the Company or securities convertible into or
exchangeable for such Membership Interests or other equity interests; (ii)
contractual obligations of the Company to repurchase, redeem or otherwise
acquire any Membership Interests; or (iii) voting trusts or similar agreements
to which the Company is a party with respect to the voting of the Membership
Interests. 23




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Exhibit 10.44 (b) The Company intends to give to Company Members releases in the form
attached to the Support Agreement. The Company has no Knowledge of any
liabilities, obligations or other claims being released by such release. Section 4.4 Authorization; Validity of Agreement. Subject to
obtaining the requisite approval of the Company Members to consummation of the
Transaction, the Company has the full power and authority and has taken all
requisite action to execute, deliver and perform this Agreement and each of the
documents and instruments required to be entered into pursuant to this
Agreement (including without limitation the Certificate of Merger) (the
Ancillary Agreements, and together with this Agreement, the Transaction
Documents), and to consummate the Transaction. The execution, delivery and
performance by the Company of the Transaction
Documents, and the consummation by the Company of the Transaction
contemplated hereby and thereby, have been duly and validly authorized by the
Board of Managers of the Company, is subject to the affirmative vote of at
least a majority of the Membership Interests, and such authorization has not
been withdrawn or amended in any manner. In this regard the requisite approval
of the Board of Managers of the Company was obtained at a Board of Managers
meeting held on October 25, 2004. Company Members are not required to vote by
class. Assuming due and valid authorization, execution and delivery of this
Agreement by Buyer and Parent, this Agreement is the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except for the effect of (i) any applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect,
affecting creditors rights generally; and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief and equitable
defenses and the discretion of the court before which any proceeding therefore
may be brought. Section 4.5 Consents and Approvals; No Violations. Except for (a)
requirements under corporation or blue sky laws of various states, if any,
and (b) regulatory approvals specifically described in this Agreement, or in
the Company Disclosure Schedule, the execution, delivery or performance of the
Transaction Documents by the Company and the consummation by the Company of the
Transaction will not (i) violate or conflict with any provision of the articles
of organization or Operating Agreement of the Company; (ii) except as set forth
on the Company Disclosure Schedule, result in a violation or breach of, or
constitute (with or without notice or lapse of time or both), a default (or
give rise to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any material note, bond, mortgage,
indenture, lease, license, contract, or other instrument or obligation to which
the Company is a party or by which it or any of its properties or assets may be
bound or result in the creation of any Security Interest on the Assets; (iii)
except as set forth on the Company Disclosure Schedule, violate or conflict
with any order, writ, judgment, injunction, decree, law, statute, rule or
regulation applicable to the Company or any of its properties or assets; or
(iv) except as set forth on the Company Disclosure Schedule, require on the
part of the Company any filing or registration with, notification to, or
authorization, consent or approval of, any Governmental Entity. The Company is
not a party to any contract which limits the rights of the Company to engage
in, or to compete with any Person in, the Business, in any geographical area,
or by any method. 24




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Exhibit 10.44 Section 4.6 Financial Information. The Company has delivered to
Buyer (i) the audited balance sheets of the Company as of December 31, 2003,
2002 and 2001 and the related audited statements of income and cash flow for
years ended December 31, 2003, 2002 and 2001, with related footnotes and
supporting schedules and (ii) an unaudited balance sheet of the Company as of
June 30, 2004, and the related unaudited statements of income and cash flow of
the Company, for the six-month period ended June 30, 2004 (collectively, the
Financial Information). The Financial Information present fairly, in all
material respects, the financial position of the Company for the periods and as
of the respective dates thereof, in each case in accordance with GAAP, subject,
in the case of the unaudited financial statements, to normal year end
adjustments. The Company has also delivered to Buyer copies of the Companys
quarterly and annual MMCORs as filed with DOH
dated June 30, 2004, December 31, 2003, 2002 and 2001, which have been
prepared in accordance with statutory accounting principles consistently
applied and fairly present the financial position of the Company as of such
dates and the results of operations for such periods. If the fair market value
of any stocks, bonds and securities included in the Assets exceed their book
value, an appropriate tax accrual has been made to the extent required by GAAP. Section 4.7 No Undisclosed Liabilities. Except as set forth on the
Company Disclosure Schedule, and except for (a) Liabilities incurred in the
ordinary course of business after December 31, 2003 (none of which results
from, arises out of, relates to, is in the nature of, or was caused by any
breach of contract, malpractice, tort, infringement or violation of law), (b)
Liabilities specifically disclosed in or covered by the Financial Information,
(c) Liabilities incurred in connection with the Transaction since December 31,
2003, and (d) Liabilities that have been discharged or paid before the date
hereof, the Company has not incurred any Liabilities that would be required to
be reflected or reserved against in a balance sheet of the Company prepared in
accordance with GAAP. Section 4.8 Employee Benefit Plans; ERISA. (a) The Company Disclosure Schedule lists all pension plans, profit
sharing plans, deferred compensation plans, stock option or stock bonus
plans, savings plans, welfare plans or other benefit plans or arrangements,
policies, practices, procedures or contracts concerning employee benefits or
fringe benefits of any kind, whether or not governed by ERISA, relating to or
covering any of its employees (a Benefit Plan). Except as set forth on the
Company Disclosure Schedule, the Company does not maintain, sponsor or
contribute to any employee benefit plan (within the meaning of Section 3(3)
of ERISA) or any other plan, program, practice, agreement or arrangement
covering the Business, of employee compensation, deferred compensation,
severance pay, retiree benefit or fringe benefit. The Company has furnished
Buyer with true, complete and accurate copies of all summary plan descriptions
of the Companys current Benefit Plans. (b) Each of the Benefit Plans is in compliance in all material respects
with all applicable requirements of ERISA, the Code and other applicable law.
Each of the Benefit Plans has been administered in all material respects in
accordance with its terms and with applicable legal requirements. All
employee pension plans (within the meaning of Section 3(2) of ERISA) have
been determined by the IRS to be qualified under Section 401(a) of the Code and 25




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Exhibit 10.44 no action or proceeding has been instituted or, to the Companys Knowledge,
threatened which would affect the qualification of any pension plan of the
Company. No unfunded liabilities, based on the PBGC rates currently in effect
for plan terminations, exist with respect to any Benefit Plan, which is a
defined benefit plan (within the meaning of Section 3(35) of ERISA). There
has not been any reportable event with respect to any pension plan of the
Company. The Company has not engaged in a prohibited transaction or breach
of fiduciary responsibility with respect to any Benefit Plan. (c) The Company (i) has never contributed to a multi-employer pension
plan, and (ii) has never incurred any liability under Title IV of ERISA to the
PBGC or to a multi-employer pension plan. (d) Each Benefit Plan of the Company or its ERISA Affiliates that is a
group health plan (as defined in ERISA Section 607(1) or Code section
5001(b)(1)) has been operated at all times in compliance with the provisions of
COBRA, HIPAA and any applicable, similar state law, including HIPAA medical
privacy rules. Section 4.9 Environmental, Health and Safety Matters. (a) Except as set forth on the Company Disclosure Schedule, to the
Companys Knowledge, the Company has complied and is in compliance, in all
material respects, with all Environmental, Health and Safety Requirements. (b) Without limiting the generality of the foregoing, the Company has
obtained and has complied and is in compliance with all permits, licenses and
other authorizations that are required pursuant to Environmental, Health and
Safety Requirements for the operation of the Business. A list of all such
permits, licenses and other authorizations is set forth on the Company
Disclosure Schedule. (c) The Company has not received any written notice, report or other
information regarding any actual or alleged violation of Environmental, Health
and Safety Requirements, or any liabilities or potential liabilities (whether
accrued, absolute, contingent, unliquidated or otherwise), including, to the
Companys Knowledge, any material investigatory, remedial or corrective
obligations, arising under Environmental, Health and Safety Requirements. (d) To the Companys Knowledge, none of the following exists at any Real
Property: (i) underground storage tanks, (ii) asbestos containing material in
any form or condition, (iii) materials or equipment containing polychlorinated
biphenyls or (iv) landfills, surface impoundments or disposal areas. (e) The Company has not treated, stored or disposed of, arranged for or
permitted the disposal of, transported, handled, or released any substance,
including without limitation any hazardous substance, or owned or operated any
property or facility (and no such property or facility is contaminated by any
such substance) in a manner that has given or would give rise to liabilities,
including any liability for response costs, corrective action costs, personal 26




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Exhibit 10.44 injury, property damage, natural resources damages or attorneys fees, pursuant
to any Environmental, Health and Safety Requirements. (f) The consummation of the Transaction will not result in any obligations
for site investigation or cleanup, or notification to or consent of government
agencies or third parties, pursuant to any of the so-called
transaction-triggered or responsible property transfer Environmental,
Health and Safety Requirements. Section 4.10 Litigation. (a) Except as set forth on the Company Disclosure Schedule, there are no
material claims, counterclaims, administrative actions, suits, proceedings or
investigations pending or, to the Companys Knowledge, threatened and still
pending, against the Company with respect to the Business or the Assets by or
before any Governmental Entity or by any third party, and there are no
unsatisfied judgments against the Company. (b) Except as set forth on the Company Disclosure Schedule, the Company is
not subject to any judgment, order, writ, injunction, decree, award or any
continuing order, consent decree, settlement agreement, or other similar
written agreement with, or, to the Companys Knowledge, continuing
investigation by, any Governmental Entity. (c) The Company has not been notified of any assessment or threatened
assessment against any HMO or guarantee fund. Section 4.11 No Default; Compliance with Applicable Laws. (a) To the Companys Knowledge, except as set forth on the Company
Disclosure Schedule, the Company is not in default or violation of any term,
condition or provision of (i) its articles of organization or Operating
Agreement; or (ii) any law, rule, regulation, or any license, permit, consent,
approval or other authorization of any Governmental Entity (Permits)
applicable to the Company. Except as set forth on the Company Disclosure
Schedule, since January 1, 2001, the Company has not received any written
notice from any Governmental Entity alleging any material violation described
in clause (ii), or directing the Company to take any remedial action with
respect to such law, rule or regulation. No person serving as an officer or
manager of the Company has ever been debarred, suspended, or otherwise excluded
from participating in any state or federally funded healthcare program. No
person employed by or serving as an officer or manager of the Company is party
to any agreement, judgment, order, consent, or equitable relief, written or
oral, that would limit or restrict the Company in any manner from conducting
the Business. (b) To the Companys Knowledge, the Business is currently operated in
compliance, and has at all times been operated in substantial compliance, with
all applicable federal and state laws, regulations and guidelines. 27




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Exhibit 10.44 (c) The Company is in good standing with, and not excluded or suspended
from participation in, or limited in its right to participate in Medicare,
Medicaid or any other federal, state or local government health care program. (d) The Company is current in filing of all reports and filings required
to be filed with the DOH and any other Governmental Entity. All such reports
and filings are accurate and complete in all material respects. (e) The Company is the holder of all necessary licenses, permits,
franchises, authorizations and approvals including the HMO License
(collectively, the Authorizations) and
all Authorizations are listed in the Company Disclosure Schedule. The
Authorizations are in full force and effect and have not been revoked,
suspended, canceled, rescinded or terminated. Other than the Authorizations,
there are no licenses, permits or authorizations of any governmental or
quasi-governmental authority required to operate the Business. Section 4.12 No Bankruptcy. The Company is not the subject of a
Bankruptcy. Section 4.13 Statutory Reserves. The Company has
established a statutory reserve sufficient to satisfy all statutory
requirements, including but not limited to Subpart 98-1.11 of Title 10 of N.Y.
Comp. Codes R. & Regs.; such reserves shall be not less than Eight Million
Dollars ($8,000,000) on the Closing Date as provided in Section 2.1(c)(i). Section 4.14 Taxes. (a) Except as set forth in the Company Disclosure Schedule, the Company
has (i) duly and timely filed all Tax Returns required to be filed by it, and
all such Tax Returns were true, correct and complete in all material respects
when filed and (ii) either paid all Taxes shown to be due on such Tax Returns
or made adequate provisions on its balance sheet for the payment thereof, other
than for such Taxes that are being contested in good faith by the Company. (b) Other than set forth on the Company Disclosure Schedule, no adverse
adjustment or deficiency for any Taxes has been proposed, asserted or assessed
in writing against the Company nor to the Companys Knowledge is there any
basis for a dispute or claim against the Company. (c) Set forth on the Company Disclosure Schedule for all taxable periods
ended on or after December 31, 2000, are all Tax Returns that include the
Company, that have been audited or that are currently the subject of audit.
The Company has delivered to Buyer correct and complete copies of all of the
Company Tax Returns, examination reports, and statements of deficiencies
assessed against, or agreed to by the Company since December 31, 2000. Except
as set forth on the Company Disclosure Schedule, the Company has not waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency. (d) The Company filed a valid election to be taxed under Subchapter C of
the Code in March 2000, which is in good standing. The Company has not filed a
consent under Code §341(f) concerning collapsible corporations. Except as set
forth on the Company 28




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Exhibit 10.44 Disclosure Schedule, the Company has not made any material
payments, is not obligated to make any material payments, and is not a party to
any agreement that under certain circumstances could obligate it to make any
material payments that will not be deductible under Code §280G. The Company has
not been a United States real property holding corporation within the meaning
of Code §897(c)(2) during the applicable period specified in Code
§897(c)(1)(A)(ii). The Company is not a party to any tax allocation or sharing
agreement. The Company (i) has not been a member of an affiliated group filing
a consolidated federal Income Tax Return (other than a group the common parent
of which was the Company) and (ii) has no liability for the Taxes of
any Person under Reg. §1.1502-6 (or any similar provision of state, local,
or foreign law), as a transferee or successor, by contract, or otherwise. (e) The Company has not engaged in any reportable or listed
transaction as defined in Treasury Regulations promulgated under Code §6011.
The Company does not have any deferred intercompany gains or losses described
in the Treasury Regulations under Code §1502 or Code §267(f). Except as set
forth on the Company Disclosure Schedule, the Company does not have any net
operating losses, built in losses, capital losses, tax credits, or similar
items that are subject to limitations under Code §382, Code §383 or separate
return year limitations under Code §1502. The Company does not have any excess
loss accounts as defined in Reg. §1.1502-19. In addition to the representation
that the Company is not a real property holding corporation under §897, the
Company shall provide Buyer with the required certification under Reg.
§1.1445-2(c)(3). Section 4.15 Real Property. (a) The Company does not own any real property. (b) Set forth on the Company Disclosure Schedule is the address of each
parcel of real property leased by the Company (Real Property) and a list of
all leases for each such Real Property. The Company has delivered to Buyer a
true and complete copy of each such lease. Except as set forth on the Company
Disclosure Schedule, with respect to each of the leases: (i) such lease is legal, valid, binding, enforceable and in full force and
effect; (ii) the Transaction (A) does not require the consent of any other party
to such lease, and (B) will not result in a breach of or default under such
lease, and will not otherwise cause such lease to cease to be legal, valid,
binding, enforceable in accordance with its terms (except to the extent such
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other law relating to or affecting the enforcement of creditors
rights or by general equitable principles); (iii) the Company is in possession of the Real Property under such lease
and there are no material disputes with respect to such lease; (iv) neither the Company nor, to the Companys Knowledge, any other party
to the lease is in breach or default under such lease and no event has occurred
or 29




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Exhibit 10.44 circumstance exists which, with the delivery of notice, the passage of time
or both, would constitute such a breach or default, or permit the termination,
modification or acceleration of rent under such lease; (v) no security deposit or portion thereof deposited with respect to such
lease has been applied in respect of a breach or default under such lease which
has not been redeposited in full; (vi) the Company does not owe, and will not owe in the future, any
brokerage commissions or finders fees with respect to such lease; (vii) the other party to such lease is not an Affiliate of, and otherwise
does not have any economic interest in, the Company; (viii) the Company has not subleased, licensed or otherwise granted any
Person the right to use or occupy such Real Property or any portion thereof;
and (ix) the Company has not collaterally assigned or granted any other
Security Interest in such lease or any interest therein. (c) The Real Property comprises all of the real property used in the
Business, and the Company is not a party to any agreement or option to purchase
any real property or interest therein. (d) All buildings, structures, fixtures, building systems and equipment,
and all components thereof, included in the Real Property (the Improvements)
are in reasonably good condition and repair and are sufficient for the
operation of the Business. To the Companys Knowledge, there are no facts or
conditions affecting any of the Improvements which would, individually or in
the aggregate, interfere in any material respect with the use or occupancy of
the Improvements or any portion thereof in the operation of the Business as
currently conducted. (e) To the Companys Knowledge, the Real Property is in material
compliance with all applicable building, zoning, subdivision, health and safety
and other land use laws, including The Americans with Disabilities Act of 1990,
as amended, and all insurance requirements affecting the Real Property
(collectively, the Real Property Laws). The Company has not received any
notice of violation of any Real Property Law and, to the Companys Knowledge,
there is no basis for the issuance of any such notice or the taking of any
action for such violation. (f) To the Companys Knowledge, the use or occupancy of the Real Property
or any portion thereof by the Company and the operation of the Business of the
Company as currently conducted thereon is not dependent on a permitted
nonconforming use or permitted non-conforming structure or similar variance,
exemption or approval from any Governmental Entity. 30




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Exhibit 10.44 (g) To the Companys Knowledge, the current use and occupancy of the Real
Property and the operation of the Business does not violate in any material
respect any easement, covenant, condition, restriction or similar provision in
any instrument of record or other unrecorded agreement affecting such Real
Property. Section 4.16 Intellectual Property. (a) The Company Disclosure Schedule sets forth all: (i) registered
copyrights, registered patents, trademarks, service marks, (ii) all material
unregistered trade names, jingles, slogans and logos owned by the Company,
(iii) each pending patent, trademark or service mark application of the
Company; and (iv) each material license or agreement to or from the Company
with respect to any of its Intellectual Property. The Company has made
available to Buyer correct and complete copies of all such patents,
registrations, applications, licenses, agreements, and permissions. (b) With respect to each item of Intellectual Property required to be
identified in the Company Disclosure Schedule pursuant to Section 4.16(a), and
except as set forth on the Company Disclosure Schedule: (i) the Company
possesses all right, title, and interest in and to the item, free and clear of
any Security Interest, license, or other restriction; (ii) the item is not
subject to any outstanding injunction, judgment, order, decree, ruling, or
charge; (iii) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand is pending or, to the Companys Knowledge, is
threatened which challenges the legality, validity, enforceability, use, or
ownership of the item; and (iv) the Company has never agreed to indemnify any
Person for or against any interference, infringement, misappropriation, or
other conflict with respect to the item. (c) The Company Disclosure Schedule identifies each material item of
Intellectual Property that any third party owns and that the Company uses
pursuant to license, sublicense, agreement, or permission (other than
off-the-shelf software). The Company has delivered to Buyer correct and
complete copies of all such licenses, sublicenses, agreements, and permissions
(as amended to date). To the Companys Knowledge, with respect to each item of
Intellectual Property required to be identified in the Company Disclosure
Schedule pursuant to this Section 4.16(c) and except as set forth on the
Company Disclosure Schedule: (i) the license, sublicense, agreement, or
permission covering the item is legal, valid, binding, enforceable, and in full
force and effect in all material respects; (ii) no party to the license,
sublicense, agreement, or permission is in material breach or default, and no
event has occurred which with notice or lapse of time would constitute a
material breach or default or permit termination, modification, or acceleration
thereunder; (iii) no party to the license, sublicense, agreement, or permission
has repudiated any material provision thereof; and (iv) the Company has not
granted any sublicense or similar right with respect to the license,
sublicense, agreement, or permission. (d) To the Companys Knowledge, the Company has not interfered with,
infringed upon, misappropriated, or violated any material Intellectual Property
rights of third parties in any material respect, and the Company has never
received any charge, complaint, claim, demand, or notice alleging any such
interference, infringement, misappropriation, or violation (including any claim
that the Company or any such person must license or refrain from 31




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Exhibit 10.44 using any
Intellectual Property rights of any third party). To the Companys Knowledge,
no third party has interfered with, infringed upon, misappropriated, or
violated any material Intellectual Property rights of the Company in any
material respect. (e) The Company owns or has the right to use pursuant to license,
sublicense, agreement, or permission all Intellectual Property necessary for
the operation of the Business of the Company as presently conducted. Each item
of Intellectual Property owned or used by the Company immediately before the
Closing hereunder will be owned or available for use by the Company on
identical terms and conditions immediately subsequent to the Closing hereunder.
The Company has taken all reasonable action to maintain and protect each item
of Intellectual Property that it owns or uses that is material to the operation
of the Business. (f) To the Companys Knowledge, the Company will not interfere with,
infringe upon, misappropriate, or otherwise come into conflict with, any
Intellectual Property rights of third parties as a result of the continued
operation of its Business as presently conducted. (g) To the Companys Knowledge, all software comprising the Intellectual
Property is in a version currently supported by the applicable vendors. Section 4.17 Material Agreements. (a) The Company Disclosure Schedule contains a true and complete list of
all Material Agreements, excluding the Provider Contracts (disclosure of which
shall be governed solely by Section 4.18, below), that includes the name of the
contracting parties, the name of the Material Agreement and the date of the
Material Agreement and all amendments to it. The Company has delivered or made
available to Buyer complete copies of all Material Agreements and other
Contracts, including all amendments thereto, except for Contracts which shall
be terminated prior to the Closing. Except as set forth in the Company
Disclosure Schedule, all such Material Agreements are in full force and effect
and are the valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, affecting creditors rights
generally, and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefore may be brought.
Except as set forth on the Company Disclosure Schedule, neither the Company
nor, to the Companys Knowledge, any other Person is in default or breach in
the observance or the performance of any term or obligation to be performed by
it under any Material Agreement except for such defaults or breaches the effect
of which, individually or in the aggregate, would not have a Material Adverse
Effect. Except as set forth on the Company Disclosure Schedule, the other
party to each Material Agreement to which the Company is a party is not an
Affiliate of, and otherwise does not have any economic interest in, the
Company. (b) The Payor Contracts include the Medicaid Contract, the CHP Contract,
the FHP Contract and, if obtained before Closing, the Managed Long-Term Care
Contract. 32




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Exhibit 10.44 (c) Except as provided in the Company Disclosure Schedule, all of the
Companys oral agreements are terminable with no more than 30 days notice and
do not involve amounts in excess of $25,000 individually. Section 4.18 Providers and Provider Contracts. (a) The Company Disclosure Schedule contains a true and complete list of
all Provider Contracts by Provider type. With respect to the Provider
Contracts with hospital Providers, the Company Disclosure Schedule includes the
name of the contracting parties, the name of the Contract, the date of the
Contract and all amendments to it. Except as provided on the Company
Disclosure Schedule, each Provider Contract contains a written addendum or
attachment which allows for payments under the Medicaid Contract, the CHP
Contract and the FHP Contract. (b) Except as set forth on the Company Disclosure Schedule, none of the
Provider Contracts (i) is terminable on notice of more than 90 days; (ii)
obligates the Company to purchase reinsurance for the Provider or otherwise
adjusts the compensation payable to such Provider based on claims experience,
(iii) requires the Company to pay a Provider on a most-favored provider basis,
(iv) obligates the Company to pay access or administrative fees, (v) has a
profit-sharing or risk-sharing component, (vi) delegates to a Provider medical
management duties, (vii) requires the Company to provide stop loss protection
to a Provider, (viii) includes any provision for rate escalation without the
Companys written consent, or (ix) to the Companys Knowledge, violates any
law. (c) The Company has compensated and currently compensates each Provider
for services to Members in accordance with the rates and fees set forth in the
applicable Provider Contract. (d) Set forth on the Company Disclosure Schedule is a description of each
written material complaint received by the Company from a Provider since
January 1, 2004, and generally describes the nature and disposition of such
complaint, including the amount involved. (e) None of the Providers who or which is a physician or physician
group (as such terms are defined at 42 C.F.R. § 418.479 et seq.are placed at
substantial financial risk (as also defined by such regulation) as a result
of the Provider Contracts with the Company. Section 4.19 Absence of Certain Changes or Events. Except
as set forth on the Company Disclosure Schedule, since December 31, 2003, the
Company has conducted the Business only in the ordinary course and has not: (a) suffered any material adverse change in condition (financial or
otherwise), (including, without limitation, any change in its premium or other
revenues, claims or other costs including IBNR, or relations with governmental
authorities, Members, Providers, Payors, or any of its employees, agents,
underwriters, or others); (b) incurred any indebtedness, obligation or other liability (contingent
or otherwise), except in the ordinary course of its business consistent with
its past practice and, to 33




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Exhibit 10.44 the Companys Knowledge, there does not exist a set of circumstances that
could reasonably be expected to result in any such indebtedness, obligation or
liability; (c) failed to pay any medical claim liability or indebtedness when due
(subject to its right to challenge such liability or indebtedness in good
faith); (d) created, permitted or allowed any Security Interest with respect to
the Assets (except Permitted Encumbrances and liens which the Company will
cause to be discharged and released as of the Closing Date); (e) made any material increase in the compensation payable by the Company
(or for which the Company may have any liability) to any Provider except as set
forth in writing in a Provider Contract; (f) except for Provider Contracts, executed, amended, or terminated any
Material Agreement to which it is or was a party or by which any of the Assets
are bound or affected; amended, terminated or waived any of its material rights
thereunder; or received notice of termination, amendment, or waiver of any
Material Agreement or any material rights thereunder; (g) instituted, settled, or agreed to settle, any litigation, action, or
proceeding before any Governmental Entity; (h) entered into any agreement or made any commitment to take any of the
types of action described in subsections 4.19(a) through 4.19(g) above; or (i) received any adverse communications or reports or any notifications
from a Payor regarding a change to any Payor Contract. Section 4.20 Labor Matters. The Company is not a party to, or
bound by, any collective bargaining agreement, contract or other agreement or
understanding with any labor union or labor organization. There is no unfair
labor practice or labor arbitration proceeding pending or, to the Companys
Knowledge, threatened against the Company. There is no strike, picketing,
slowdown or work stoppage by or concerning the employees of the Company pending
against or involving the Company. No representation question is pending or, to
the Companys Knowledge, threatened respecting any of the employees of the
Company. The Company is not liable for or in arrears for any wages, benefits,
taxes, damages or penalties for failing to comply with any law, rule,
regulation, ordinance, order or decree relating in any way to labor or
employment. To the Companys Knowledge, no executive, key employee or
significant group of employees plans to terminate employment with the Company
during the next 12 months. Section 4.21 Insurance. The Company Disclosure Schedule contains a
complete and correct list of insurance policies, including, without limitation,
insolvency insurance, that the Company maintains, specifying
policy limit, type of coverage and expiration date for each policy. Such
policies are in full force and effect as of the date hereof. 34




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Exhibit 10.44 Section 4.22 Employees. The Company Disclosure Schedule lists the
names and job titles of all employees of the Company as of September 30, 2004
(and updated as of the Closing Date). The respective base salaries, current
years bonuses and positions and whether such employees are parties to a
written employment agreement with the Company for such employees are listed on
the Careplus Employee Disclosure Schedule, which has been delivered by the
Company to Buyer. Each employees length of service, employment commencement
date and whether the employee is full or part time, salaried or hourly paid and
the benefits received by such employee have been provided to Buyer. All
employees are actively engaged in the operation of the Business in accordance
with their job descriptions. Section 4.23 Independent Contractors. Since January 1, 2000, all
individuals performing services for the Company as independent contractors
should not have been properly classified as employees of the Company at the
time such services were performed under tax, workers compensation and other
Federal or State law and regulations. Section 4.24 Relations and Members. The Company Disclosure
Schedule lists each material written complaint received by the Company from a
Member concerning any aspect of the Business since January 1, 2004, and
generally describes the nature and disposition of such complaint. Section 4.25 Books and Records. The minute books and membership
records of the Company, as previously made available to Buyer, contain accurate
records of all meetings of and all actions or written consents by the Board of
Managers and members of the Company. Section 4.26 Brokers or Finders. Except for Banc of America
Securities, whose fees will be paid by Company Members or Company Members shall
cause Agent to pay such fees on their behalf, no agent, broker, investment
banker, financial advisor or other firm or Person is or will be entitled to any
brokers or finders fee or any other commission or similar fee in connection
with any of the transactions contemplated by this Agreement for which Buyer
shall have any liability as a result of any action by the Company or Company
Members, or of their agents. Section 4.27 Business Operations. The only business that the
Company has conducted since its formation is the Business (or portions
thereof). The Company Disclosure Schedule lists all of the Companys business
addresses since 2000, and all trade names and names of predecessor entities
used by the Company since 2000. The Company has not been a party to a merger,
consolidation, liquidation, recapitalization or other business combination. Section 4.28 Powers of Attorney. There are no outstanding
powers of attorney executed on behalf of the Company. Section 4.29 Guarantees. The Company is not a guarantor or
otherwise responsible for any liability or obligation (including indebtedness)
of any other Person and is not a party to a letter of credit agreement or a
contract of suretyship. 35




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Exhibit 10.44 Section 4.30 Receivables. Except as set forth on the Company
Disclosure Schedule, all Receivables of the Company: (i) are properly reflected
on the books and records of the Company; (ii) are valid receivables and are not
subject to any setoffs, defenses or counterclaims; (iii) are collectible
subject only to the reserves for bad debt set forth in the Closing Balance
Sheet; (iv) have arisen from bona fide transactions in the ordinary course of
business; and (v) are properly billed to the proper Payor or Provider in
accordance with applicable law and the applicable Payor Contract or Provider
Contract. Section 4.31 Banks and Depositories. The Company Disclosure
Schedule sets forth: (i) a true and complete list of the name and address of
each bank, savings and loan or other financial institution in which the Company
has an account or safe deposit bank; (ii) the identity of each such account or
safe deposit box; (iii) the names of all persons authorized to draw on each
account and to have access to each safe deposit box; and (iv) the name of the
bank contact person. Section 4.32 Limitation on Use of Funds. (a) Pursuant to 31 U.S.C. 1352 and 45 CFR Part 93, no federal appropriated
funds have been paid or will be paid to any Person by or on behalf of the
Company for the purpose of influencing or attempting to influence an officer or
employee of any agency, a member of Congress in connection with the award of
any federal contract, the making of any federal grant, the making of any
federal loan, the entering into of any cooperative contract, or the extension,
continuation, renewal, amendment, or modification of any federal contract,
grant loan, or cooperative contract. (b) Since January 1, 2001, if any funds other than federal
appropriated funds have been paid by the Company to any Person for the purpose
of influencing or attempting to influence an officer or employee of any agency,
a member of Congress, an officer or employee of any agency, a member of
Congress, an officer or employee of Congress, or an employee of a member of
Congress in connection with the award of any federal contract, the making of
any federal grant, the making of any federal loan, the entering into of any
cooperative contract, or the extension, continuation, renewal, amendment, or
modification of any federal contract, grant, loan, or cooperative contract, and
the contract exceeds $100,000, such Person has completed and submitted Standard
Form LLL, Disclosure of Lobbying Activities, in accordance with its
instructions, a copy of which is attached as part of the Company Disclosure
Schedule. Section 4.33 Terrorism Compliance. The Company is in
compliance with (i) Executive Order 13224 (66 FR 49079), Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism and all rules and regulations promulgated thereunder and (ii)
United States Public Law No. 107-56, Uniting and Strengthening America by
Providing Appropriate Tools required to Intercept and Obstruct Terrorism of
2001 and all rules and regulations promulgated thereunder. 36




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Exhibit 10.44 Section 4.34 Condition of Assets. (a) All Assets. The Assets constitute all of the assets used to
operate the Business as presently conducted. (b) Tangible Personal Property. The Company Disclosure Schedule contains a true and complete list of all material items of Tangible
Personal Property that is owned by the Company. Any material Tangible Personal
Property that is leased by the Company, whether as lessor or lessee, is
separately designated on the Company Disclosure Schedule and all related lease
agreements are described thereon. (c) Good Title, Operating Condition. Except as set forth on the
Company Disclosure Schedule: (i) the Company has good and valid title to or
the unrestricted right to use all of the Assets owned, leased or licensed by
it, free and clear of all Security Interests (other than Permitted
Encumbrances), and (ii) all Tangible Personal Property, is in good operating
condition for the operation of the Business, normal wear and tear excepted. Section 4.35 Standby Agreements. The Company is not party to any
standby agreement or backup contract with respect to the sale of the Membership
Interests, the Assets or the Business and the Company has terminated any
discussions with third parties with respect to any such proposed sale. Section 4.36 Misstatements and Omissions. No representation or
warranty made by the Company in this Agreement, or in any statement,
certificate, exhibit, schedule, or other document furnished to Buyer pursuant
hereto or in connection with the Transaction contemplated herein contains any
untrue statement of material fact or omits to state a material fact necessary
to make the statements contained herein or therein not misleading. ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER AND PARENT Buyer and Parent represent and warrant to Company Members and the Company
as follows: Section 5.1 Organization. Each of Buyer and Parent is a
corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as is now being conducted. Buyer is duly qualified or licensed to do business
as a foreign corporation and is in good standing in each jurisdiction in which
the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary. Buyer will
have 100 shares of capital stock issued and outstanding on the Closing Date. Section 5.2 Authorization; Validity of Agreement; Necessary Action.
Each of Buyer and Parent has the corporate power and authority to execute,
deliver and perform the Transaction Documents and to consummate the
transactions contemplated thereby. The execution, delivery 37




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Exhibit 10.44 and performance by
each of Buyer and Parent of the Transaction Documents and the consummation of
the Merger and the transactions contemplated thereby, have been duly and
validly authorized by all necessary corporate proceedings and such
authorization has not been withdrawn or amended in any manner. This Agreement
has been, and each of the other Transaction Documents required to be entered
into pursuant to this Agreement will be, duly executed and delivered by each of
Buyer and Parent and, assuming due and valid authorization, execution and
delivery hereof and thereof by Company Members and the Company, are or will be
legal, valid and binding obligations of Buyer and Parent, enforceable against
it in accordance with its terms, except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws, now or hereafter in effect, affecting creditors rights
generally; and (ii) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefore may be brought. Section 5.3 Consents and Approvals; No Violations. Except as
disclosed on the Buyer Disclosure Schedule and except for matters specifically
described in this Agreement, neither the execution, delivery or performance of
this Agreement and each of the other agreements and instruments required to be
entered into pursuant to this Agreement by Buyer or Parent, nor the
consummation by Buyer or Parent of the transactions contemplated hereby and
thereby will (i) violate or conflict with any provision of the articles of
incorporation, bylaws or other organizational documents of Buyer or Parent;
(ii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which Buyer or Parent is a party
or by which any of them or any of their properties
or assets may be bound; (iii) to Buyers or Parents knowledge, violate or
conflict with any order, writ, judgment, injunction, decree, law, statute, rule
or regulation applicable to Buyer or Parent, if any, or any of its properties
or assets; or (iv) require on the part of Buyer or Parent any filing or
registration with, notification to, or authorization, consent or approval of,
any Governmental Entity. Section 5.4 Brokers or Finders. Buyer and Parent represent with
respect to themselves, their Subsidiaries and their Affiliates but not with
respect to Company Members or the Company, that no agent, broker, investment
banker, financial advisor or other firm or Person is or will be entitled to any
brokers or finders fee or any other commission or similar fee in connection
with any of the transactions contemplated by the Agreement for which Company
Members shall have any liability as a result of any action by Buyer or Parent
or any of Buyers or Parents Affiliates or agents. Section 5.5 Litigation. Except as set forth on the Buyer
Disclosure Schedule, there are no material claims, counterclaims,
administrative actions, suits, proceedings or investigations pending or, to
Buyers or Parents knowledge, threatened, against Buyer or Parent, which would
restrain or challenge this Transaction. Section 5.6 No Bankruptcy. Neither Buyer nor Parent is subject to
Bankruptcy or any similar proceeding. 38




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Exhibit 10.44 Section 5.7 Disqualifying Background. Except as set forth
on the Buyer Disclosure Schedule, none of Buyers or Parents officers and
directors has ever been debarred, suspended, or otherwise excluded from
participating in any state or federally funded healthcare program, or, to
Buyers or Parents knowledge, has engaged in conduct or holds a position that
would reasonably prevent or materially delay Parent from being approved by DOH
as owner of the Company. Parent is not party to any agreement, judgment,
order, consent, or equitable relief, written or oral, that would limit or
restrict Parent in any manner from conducting the Business. Section 5.8 Misstatements and Omissions. No representation or
warranty made by Buyer or Parent in this Agreement, or in any statement,
certificate, exhibit, schedule, or other document furnished to Company Members
or the Company pursuant hereto contains any untrue statement of material fact
or omits to state a material fact necessary to make the statements contained
herein or therein not misleading. ARTICLE VI
COVENANTS Section 6.1 Interim Operations of the Company. Except (i) as
contemplated by this Agreement, (ii) as disclosed on the Company Disclosure
Schedule, or (iii) with the prior written consent of Buyer (which consent shall
not be unreasonably withheld), after the date hereof and until the
earlier of (x) the Closing Date or (y) the termination of this Agreement
(the Interim Period), the Company shall: (a) conduct the Business in the ordinary and usual course, consistent with
past practice; (b) not amend the Companys articles of organization or Operating
Agreement; (c) not (i) split, combine or reclassify the Membership Interests, (ii)
issue or sell any additional membership interests or securities convertible
into or exchangeable for, or options, warrants, calls, commitments or rights of
any kind to acquire, the Membership Interests, or (iii) redeem, purchase or
otherwise acquire, directly or indirectly, any Membership Interests; (d) not adopt any new employee benefit plan or materially increase any
compensation or enter into or amend any written employment, termination or
similar agreement with any of its present or future officers, directors or
employees, except for those required under existing plans or programs; (e) not acquire any assets with a cost in excess of $50,000 or sell, lease
or dispose of any material assets required for the operation of the Business as
currently conducted unless such asset is obsolete, damaged or replaced in the
ordinary course of business; 39




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Exhibit 10.44 (f) not amend, supplement or otherwise alter, any Contracts or
relationships with any Payor, Provider or other party, except in the ordinary
course of business consistent with past practice; (g) not (i) incur or assume any long-term or short-term debt or issue any
debt securities, (ii) assume, guarantee, endorse or otherwise become liable or
responsible for the obligations of any unaffiliated third party, (iii) make any
loans, advances or capital contributions to, or investments in, any
unaffiliated third party, or (iv) pledge or otherwise encumber the Membership
Interests or any of the Assets, or create any lien with respect to either
except Permitted Encumbrances; (h) not acquire (by merger, consolidation or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof or any equity interest therein; (i) not adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing such liquidation or a dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization, unless
required by law or administrative order; (j) not change the accounting methods used by it, unless required by GAAP
or applicable law; (k) not make any tax election or changes to the Companys tax accounting
methods; (l) use commercially reasonable efforts not to allow the Company to suffer
a Material Adverse Effect; (m) keep in full force and effect its Authorizations, Permits and the
insurance covering the Company and its assets comparable in amount and scope of
coverage to that currently maintained; (n) not enter into any agreement or commitment to take any of the actions
described in Section 6.1(b)  (k) above; and (o) collect or write off all of the Companys accounts receivable other
than the Receivables. Section 6.2 Access to Information. (a) Throughout the Interim Period, the Company shall afford Buyer and
its authorized representatives reasonable access during normal business hours
to the Companys Contracts and officers and, with reasonable prior notice to
the Company and the Companys consent (which shall not unreasonably be
withheld), to the Companys employees, Providers and Payors, and the Company
will use all reasonable efforts to cause its representatives to furnish
promptly to Buyer such additional financial and operating data and other
information as to the 40




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Exhibit 10.44 Companys businesses and properties as Buyer or its
authorized representatives may from time to time reasonably request. (b) During the Interim Period, within 30 days of the end of each monthly
or quarterly (as applicable) reporting period, the Company shall provide to
Buyer a copy of the Companys unaudited interim financial statements for such
month, including a balance sheet, an income and expense statement and a
statement of cash flow for such month and year to date. The Company shall also
provide medical claim lag triangles and quarterly MMCOR filings in a timely
fashion as soon as such triangles and filings are available. If the Closing
does not occur by March 31, 2005, the Company shall provide to Buyer a copy of
its audited financial statements for the period January 1, 2004 through
December 31, 2004, including a balance sheet as of December 31, 2004 and income
statements, related footnotes and supporting schedules prepared in accordance
with GAAP and GGK will provide KPMG access to its workpapers, provided that the
customary workpaper access letter in the public accounting industry is signed
and delivered to GGK. (c) For a period of five (5) years following the Closing Date, Parent
shall, and shall cause its Affiliates to, maintain and make available to
Company Members, on Agents reasonable request, copies of any and all
information, books and records relating to the Assets and the Business. Any
information obtained pursuant to this Section shall be kept confidential by
Company Members, unless and only to the extent that disclosure is required by
law, legal process or regulatory authority. After such five-year period,
Parent and the Company may
dispose of such information, books and records, provided that before such
disposition, Parent and the Company shall give Agent the opportunity to take
possession of such information, books and records. Section 6.3 Maintenance of Certain Insurance (a) The Company shall purchase before Closing at Company Members expense
a reporting form tail endorsement covering a period of five (5) years before
the Closing Date for its directors and officers liability insurance and
professional liability insurance, including coverage for the benefit of the
former directors, officers and employees of the Company. At Closing, Agent
shall deduct the cost of such insurance from the Closing Cash Amount to pay for
such insurance before distributing the net proceeds of the Closing Cash Amount
to Company Members. (b) At Company Members option, the Company shall purchase before Closing
at Company Members expense a reporting form tail endorsement covering a period
of five (5) years before the Closing Date, for the current fiduciary liability
insurance coverage as to the Company, Company Members, and the former directors
and officers of the Company. At Closing, Agent shall deduct the cost of such
insurance, if any, from the Closing Cash Amount to pay for such insurance
before distributing the net proceeds of the Closing Cash Amount to Company
Members. Section 6.4 Tax Matters. 41




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Exhibit 10.44 (a) Transfer Taxes. All documentary or other similar taxes,
charges or fees imposed by any Governmental Entity with respect to the Merger
shall be borne by Company Members. (b) Apportionment; Preparation of Tax Returns. The Taxes shall be
apportioned based, in the case of real, franchise, intangible and personal
property Taxes, on a per diem basis, and, in the case of other Taxes
(including, without limitation, Income Taxes), on the actual activities,
taxable income or loss of during the applicable periods based on a closing of
the books at the end of the Closing Date. Parent shall cause the Company to
prepare and file all Tax Returns for the Company that are due for periods
ending after the Effective Time. Agent shall have the right to review and
approve, which approval shall not be unreasonably withheld or delayed, any Tax
Returns, other than a consolidated return of Parent and its Affiliates, that
include a Pre-Closing Partial Period for which Company Members may be liable
for Taxes. If a Pre-Closing Partial Period is included in a consolidated
return of Parent and its Affiliates, Parent shall give Agent reasonable
information and access to necessary books and records to verify Company
Members liability for Taxes for such Pre-Closing Partial Period. (c) Mutual Cooperation. As soon as practicable, Parent shall
deliver to Agent, such information and other data relating to Tax Returns and
Taxes of the Company and shall provide such other assistance as may reasonably
be requested, to cause the completion and filing of all Tax Returns for periods
ending before the Effective Date or to respond to audits by any taxing
authorities with respect to any Tax Returns or taxable periods or to otherwise
enable
Company Members, Parent and the Company to satisfy their accounting or Tax
requirements. Any information obtained pursuant to this Section 6.4(c) shall
be kept confidential by the parties, unless and only to the extent that
disclosure is required by law, legal process or regulatory authority. (d) Consent. Whenever any taxing authority asserts a claim, makes
an assessment or otherwise disputes the amount of Company Taxes for any
pre-Effective Date period, Parent shall promptly inform Agent. However, if
Parent does not give prompt notice to Company Members, Company Members shall
not be relieved of liability unless Parents delay materially prejudices the
Companys or Company Members liability. If the Taxes in controversy relate
solely to the periods before the Effective Time, Agent shall have the right to
control any resulting proceedings and, with Parent approval, which will not be
unreasonably withheld, to determine whether and when to settle any such claim,
assessment or dispute, to the extent such proceedings or determinations affect
the amount of Taxes for which Company Members may be liable under this
Agreement. In all other matters, Parent shall have the right to control any
resulting proceedings and, with input from Agent to the extent Taxes for which
Company Members may be liable under this Agreement are at issue, to determine
whether and when to settle any such claim, assessment or dispute to the extent
such proceedings or determinations affect the amount of Taxes for which Company
Members may be liable under this Agreement. Section 6.5 Audited Financial Information. Company Members
acknowledge that Parent is a reporting company pursuant to the Securities Act
of 1933, as amended (the Securities Act) and/or the Securities Exchange Act
of 1934, as amended, (the Exchange 42




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Exhibit 10.44 Act). Parent may file or include in its
filings with the SEC (the Securities Filings) the Financial Statements for
the Company and its Subsidiaries on a consolidated basis including the Form 8-K
due within 75 days after the Closing Date. Section 6.6 Publicity. On execution of this Agreement and before
Closing, Buyer and/or Parent will issue press releases with prior written
notice to the Company. On and after Closing, Parent may issue press releases
without any notice to the Company. Neither Company Members nor the Company nor
any of their respective Affiliates shall issue any press release or any other
public statement or any correspondence or other communication with respect to
the execution and the Closing of this Agreement unless Buyer shall have had the
prior opportunity to review and comment thereon and such release or statement
has been consented to by Buyer. The Company acknowledges Parents reporting
and disclosure obligations under the Exchange Act, other federal and state
securities laws and case interpretations of such laws, whether as reported in
its Securities Filings or in its everyday discussions with securities analysts,
shareholders and the press. Company Members and the Company hereby consent to
Buyers and Parents dissemination of such information in statements other than
press releases. Section 6.7 Approvals and Consents; Cooperation; Notification. (a) The Company and Buyer shall cooperate with each other in good faith in
obtaining, as promptly as practicable (i) all required consents of Governmental
Entities; (ii) consents of all other third parties necessary to consummate the
Transaction; and (iii) as necessary, all consents of Payors and other third
parties under the Material Agreements to the change of control of the Company.
In this regard, the Company shall assist in coordinating (and attend, at the
Companys option) Buyers meetings and telephone conferences with Providers,
applicable Governmental Entities, Payors and local community and trade
organizations. (b) Buyer and the Company shall take all actions necessary to file, as
soon as practicable, all notifications, filings and other documents required to
be filed by such party with all Governmental Entities, and obtain all other
authorizations, approvals, consents or waivers, and to respond as promptly as
practicable to any inquiries received from any Governmental Entity for
additional information or documentation in connection therewith. Without
limiting the generality of the foregoing, each of the parties will file (and
the Company will file, and the filing fees shall be shared 50% by Company
Members and 50% by Buyer pursuant to Section 11.12(c)) any Notification and
Report Forms and related material that it may be required to file with the
Federal Trade Commission and the Antitrust Division of the United States
Department of Justice under the HSR Act, will use its reasonable best efforts
to obtain (and the Company will use its reasonable best efforts to obtain) a
waiver from the applicable waiting period, and will make any further filings
pursuant thereto that may be necessary, proper, or advisable in connection
therewith. (c) The Company and Buyer shall (i) promptly advise each other on
receiving any communication from any Governmental Entity or other Person whose
consent or approval is required for consummation of the Transaction which
causes such party to believe that there is a reasonable likelihood that any
Required Consent will not be obtained or that the receipt of any such Required
Consent will be materially delayed and (ii) promptly advise each other of the 43




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Exhibit 10.44 occurrence or failure to occur of an event that would, or, with the lapse of
time would, cause any condition to the consummation of the Transaction
contemplated hereby not to be satisfied. (d) To ensure an effective transition of the Business to Buyer, the
parties agree that at all times before the Closing Date, the Company shall: (i) orient, educate and otherwise train Buyer and permit Buyer to work
with the President of the Company regarding (A) the Companys current operating
policies and procedures (to ensure continuity of administration), (B) the
health plan benefits and services offered by the Company to the Company Members
including, without limitation, member services, member outreach and education,
and preventative medicine programs, (C) the Providers and the Provider
Contracts, (D) the Payors and the Payor Contracts and (E) the Companys medical
management policies and procedures and (F) the operations of the Business; (ii) as coordinated by the Companys President, grant Buyer access to and
help Buyer interface with the phone information network used by the Company in
connection with the Business and make available to Buyer, in all media
reasonably available, such information as may prepare the Company to continue
to pay claims arising under the Provider Contracts after the Closing Date and
otherwise operate the Business. Section 6.8 Regulatory Filings. The Company shall make all filings
due on or before the Closing Date with Governmental Entities in accordance with
the Companys usual business practices, and will give Buyer advance copies of
the proposed filings so that Buyer will be able to give the Company its
comments on the proposed filings. Section 6.9 Further Assurances. Each party agrees to use all
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the Transaction. Section 6.10 Conditions. Buyer, Parent, the Company and Company
Members covenant and agree that, subject to the provisions of Article IX
hereof, if any event should occur, either within or without the control of any
party hereto, that would prevent fulfillment of the conditions of any party to
consummate the Transaction, the parties shall each use all commercially
reasonable efforts to cure the event as expeditiously as possible; provided,
however, that upon the occurrence of such event, no party shall have any
obligation to take any action not specifically required by the terms of this
Agreement to cure such event if such action would be unduly burdensome or would
have a Material Adverse Effect on such party. Section 6.11 Revised Company Disclosure Schedule. The Company
shall deliver to Buyer a revised Company Disclosure Schedule if required to
reflect changes in the Company Disclosure Schedule arising between the
execution of this Agreement and the Closing Date; provided, however, that,
except for changes that are permitted by the terms of this Agreement, no change
in the Company Disclosure Schedule will be binding on Buyer without its prior
written consent, which consent will not be unreasonably withheld. 44




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Exhibit 10.44 Section 6.12 New Contracts. Except in the case of the
Provider Contracts terminable at will on notice of 90 days or less, Contracts
(other than Material Agreements) entered into in the ordinary course of
business, the replacement of employees on similar terms and conditions of
employment, and the renewal of existing Contracts in the ordinary course of
business, any new Material Agreements to be executed after the date of this
Agreement on behalf of the Company which will not expire on or before the
Closing Date shall require the prior written approval of a designated
representative of Buyer, which consent will not be unreasonably withheld. Section 6.13 No Solicitation. During the Interim Period, neither
Company Members nor the Company nor their respective managers, officers,
employees, advisors and representatives shall, directly or indirectly, solicit,
initiate or encourage (including by way of furnishing information) any
Acquisition Proposal from any Person, or engage in or continue discussions or
negotiations
relating to any Acquisition Proposal, and shall direct its managers,
officers, financial advisors and other authorized representatives to refrain
from taking any such action. For the purposes of this Agreement, Acquisition
Proposal shall mean, with respect to the Company and the Business, any
proposal or offer for, or any written statement of intention (by public
announcement or otherwise) by any Person or group to effect, any merger or
consolidation with, or acquisition of substantially all of the equity interests
or assets of, or other business combination involving, the Company or the
Business. The Company shall immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any Persons conducted
heretofore with respect to any of the foregoing, and the Company shall
immediately demand that any such persons return to the Company any confidential
information and/or materials such persons may have received from the Company
during the course of such activities, discussions or negotiations. Company
Members and the Company acknowledge and agree that any remedy at law for breach
of the foregoing covenants shall be inadequate, and in addition to any other
relief which may be available, Buyer shall be entitled to temporary and
permanent injunctive relief without the necessity of proving actual damages,
posting bond or providing security, and without regard to the adequacy of any
remedy at law. Section 6.14 Collection of Receivables, Other Assets. After the
Closing Date, Parent shall cause the Company to use commercially reasonable
efforts to collect the Receivables in the ordinary course of business, which
efforts shall not include a requirement to pay any attorneys fees or out of
pocket costs to third parties. If the Company shall not have collected the
amount of Receivables, net of any reserve for bad debt, set forth on the
Closing Balance Sheet by the 120th day after the Effective Time, Parent at its
option, may assign such uncollected Receivables to Agent for the benefit of
Company Members and Agent shall cause Escrow Agent to distribute from the
Escrow Account to the Company the difference between the amount of Receivables,
net of any reserve for bad debts, on the Closing Balance Sheet, and the amount
of Receivables collected by the Company after Closing. Section 6.15 Meeting of Company Members. Promptly after execution
and delivery of this Agreement by Buyer, Parent and Company, Company will give
written notice of a meeting of Company Members to be held for the purpose of
obtaining their approval to this Agreement and the Transaction, which meeting
will be held within 30 days of the date hereto. By their signatures hereto,
Joseph Zappala and Karin Ajmani agree to vote their Membership Interests, and
any Membership Interests held by proxy pursuant to the proxies given them under
the 45




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Exhibit 10.44 Support Agreements executed by various Company Members, in favor of
approving this Agreement and the Transaction. ARTICLE VII
TRANSITION Section 7.1 Employees. (a) Except as provided in Section 7.1(c) and 7.1(d), neither Company
Members nor the Company shall make any commitments to any of the Companys
officers or employees with respect to their continued employment after the
Effective Time. As coordinated by the Companys transition officer and/or
President, the Company shall, upon Buyers request, permit Buyer to interview
the Companys employees. The Company shall be responsible to pay on or before
Closing Date all stay for pay, retention and severance payment which Company is
obligated to pay to Companys employees prior to the Closing. The Company will
be responsible for all retention and severance payments which accrue after the
Closing to the extent that the Company contracted for such obligations prior to
the Closing and such obligations are included on the Company Disclosure
Schedule. (b) The Company will work with Buyer during the Transition Period in
developing a plan for the eventual termination of the Companys Benefit Plans
after Closing. (c) On the Closing Date, Zappala shall have entered into a consulting
agreement with the Company in the form agreed to by the parties. (d) On and after the Closing, the Companys current employment
agreement with Karin Ajmani shall continue to be in place and effective. ARTICLE VIII
INDEMNIFICATION Section 8.1 Basic Provisions. (a) Indemnification of Buyer and Parent. (i) Subject to the limitations set forth in this Article VIII, Company
Members, individually and only to the extent of their respective individual
obligations hereunder, agree to indemnify, defend and hold Buyer, Parent and
their officers, directors, agents, Affiliates, and their respective successors
and permitted assigns, harmless from and in respect of any and all losses,
damages, costs and reasonable expenses (including, without limitation,
reasonable expenses of investigation and defense fees and disbursements of
counsel and other professionals) (individually a Loss and collectively,
Losses) that they may incur arising out of or due to (A) any inaccuracy in or
breach of any representation or warranty made by such Company Member and
contained in Article III of this Agreement, or (B) any breach of a covenant of
such Company Member contained in this Agreement. Company Members shall be
entitled to any refunds of 46




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Exhibit 10.44 such Taxes (including interest) with respect to the
pre-Closing Date periods except to the extent that such refund of Taxes is
reflected as an asset on the Closing Balance Sheet. The representations,
warranties, indemnifications and covenants of Company Members set forth in
Article III, this Section 8.1(a)(i) and certain other provisions in this Merger
Agreement are duplicated in the Support Agreement because some Company Members
may not be Signing Members. There is no intent to increase the liability of
any Signing Members by including such provisions in both documents and no
Signing Members liability for such provisions shall increase as a result
thereof. (ii) Except for the breach of any representation, warranty or covenant of
a Company Member for which such Company Member is individually liable under
Section 8.1(a)(i), Company Members severally agree to indemnify, defend and
hold Buyer, its officers, directors, agents and Affiliates and their respective
successors and permitted assigns, harmless from and in respect of any and all
Losses (which shall include, for purposes of this Section 8.1(a)(ii),
prospective rate adjustments by a Payor in lieu of a claim which would be
subject to this Section 8.1(a)(ii)) that they may incur (A) arising out of or
due to any breach of representation, warranty, covenant, undertaking or other
agreement of the Company or Company Members, under this Agreement as of the
Effective Time, (B) arising out of any claims by Dissenting Members relating to
the Merger (including but not limited to claims in excess of Dissenters
Allocable Consideration, claims challenging the Merger process, or claims
relating to indemnification obligations, or (C) arising of out those matters
disclosed in the Company Disclosure Schedule related to or arising out of or in
connection with the Assets, business operations, conduct, products and/or
employees (including former employees) of the Company in connection with the
operations of the Company or the Business on or before the Closing Date except
those Losses which are reserved for on the Closing Balance Sheet, but only to
the extent of such reserves. Parents exclusive source of recovery of amounts
due on account of Losses pursuant to Section 8.1(a)(ii)(A) and 8.1(a)(i)(C)
shall be through access to funds in the Escrow Account, Parents exclusive
source of recovery of amounts due on account of Losses pursuant to Section
8.1(a)(ii)(B) shall be through access to funds in the Dissenters Account
established under the Escrow Agreement; provided, nevertheless, that no claim
asserted by Parent or Buyer shall paid from funds deposited into the Escrow
Account in excess of the first $11,000,000 of such deposits exclusive of
Dissenters Withhold Amount deposited to the Escrow Account by Agent, Parent,
Buyer, Company Member or Company which excess will not be subject to Parent or
Buyer claims for any reason. (b) Indemnification of Company Members and the Company. Subject to
the limitations set forth in this Article VIII, Buyer and Parent agree to
indemnify, defend and hold Company Members, and before the Closing Date, the
Company, and their respective officers, directors, shareholders, members,
agents and Affiliates, and their respective successors and permitted assigns,
harmless from and in respect of any and all Losses that they may incur (i)
arising out of or due to any inaccuracy of any representation or the breach of
any warranty, covenant, undertaking or other agreement of Buyer contained in
this Agreement, (ii) related to or arising out of or in connection with the
assets, business, operations, conduct, products and/or employees of the Company
or the Business after the Closing Date, and (iii) all Taxes of the Company or
any successor accruing on or after the Effective Date. Parent shall be
entitled to any refunds of Taxes (including interest) accruing on or after the
Effective Date and any Taxes (and interest thereon) receivable included in
computing Closing Book Value. 47




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Exhibit 10.44 Section 8.2 Survival of Representations and Warranties. The
representations and warranties and covenants of the parties contained in this
Agreement or in any instrument delivered pursuant to this Agreement will
survive the Closing through and including the Survival Date, provided, however,
that Dissenting Member Claims and those representations and warranties and
indemnities with respect to a Tax matter, an environmental matter, Benefit Plan
matter, or a title matter (collectively, Superior Claims) may be asserted at
any time on or before the expiration of the limitations period under applicable
law. If Loss under this Agreement is asserted by any party
before the Survival Date, or in the case of Superior Claims, before the
expiration of the applicable limitations period, such Loss shall survive until
the existence of such Loss has been finally established and the Loss is
resolved as provided below. Anything to the contrary contained herein
notwithstanding, no party shall be entitled to recover from any other for any
Losses asserted against it pursuant to this Agreement (i) unless and until the
aggregate amount of all Losses of such party exceeds Two Hundred Thousand
Dollars ($200,000) and then for all such Losses and all further Losses or (ii)
other than Section 8.1(a)(i) Losses and as provided in the Support Agreement,
to the extent the aggregate amount of all Losses exceeds the funds available in
the Escrow Account. Section 8.3 Notice and Opportunity to Defend. If an event
occurs which a party asserts would give rise to any indemnification obligation
pursuant to Section 8.1, the party seeking indemnification (the Indemnitee)
shall promptly give written notice thereof to the other party obligated to
provide indemnification (the Indemnifying Party). If such event involves (i)
any claim or (ii) the commencement of any action or proceeding by a third
Person (collectively, the Asserted Liability), the Indemnitee will give such
Indemnifying Party prompt written notice of such claim or the commencement of
such action or proceeding describing the Asserted Liability in reasonable
detail and indicating the amount (estimated, if necessary) for which such party
may be liable; provided, however, that the failure to provide prompt written
notice as provided herein will relieve the Indemnifying Party of its
obligations hereunder only to the extent that such failure materially
prejudices the Indemnifying Party hereunder. For matters not involving a third
party claim, the Indemnifying Party shall have a period of 30 days after
receipt of the Indemnitees notice to give written notice to the Indemnitees
announcing its intent to contest the assertion of the Indemnitees (the Contest
Notice). If a Contest Notice is not provided within such period, such
assertion of the Indemnitees shall be deemed accepted and the amount of the
Losses shall be deemed established. If a Contest Notice is provided, the
contested assertion shall be resolved through binding arbitration as provided
in Section 11.2. For matters involving third party claims, the amount of the
Losses shall not be deemed established until the claim has been resolved with
the third party as provided in Sections 8.3(a) and (b) below. (a) Provider Contracts, Current Employee or Payor Matters. If an
action is brought against the Company with respect to a Provider Contract, a
current employee (as of the Closing Date) of the Company or a Payor, Parent
shall defend the action. Agent shall have the right to participate, at its own
expense, in the defense of such Asserted Liability provided that Parent in all
instances shall be responsible for directing and controlling the settlement of,
or defense against, such action. Parent may settle, compromise or defend such
Asserted Liability in the exercise of its reasonable discretion at the expense
of Company Members and Agent shall promptly reimburse Parent for the amount of
all reasonable costs and expenses incurred by 48




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Exhibit 10.44 Parent in connection with the
settlement of or defense against the Asserted Liability to the extent and as
provided in Section 8.1(a), including its selection of counsel; provided,
however,that if Parent settles an action related to a Provider dispute over
the objection of Agent, Parent will pay Agent for the benefit of Company
Members 25% of the difference between the amount at which Agent reasonably
believes the matter could be timely settled and the actual settlement amount.
If no settlement of the Asserted Liability is entered into, Escrow Agent shall
promptly reimburse Parent for the amount of any judgment rendered with respect
to
such Asserted Liability and all related, bona fide and reasonable expenses
incurred by Parent in defense against such action to the extent recoverable
under Section 8.1(a). (b) Superior Claim Matters; and other Indemnification Matters. If
any action either (i) is related to a Superior Claim Matter or (ii) for which
Parent would be the Indemnifying Party, is brought against the Indemnitee and
it notifies the Indemnifying Party of the commencement thereof, the
Indemnifying Party shall, upon providing prompt written notification thereof
within three days of receipt of any notice to the Indemnitee, be entitled to
participate therein and, to the extent that it wishes, to assume the defense
thereof, with counsel reasonably satisfactory to the Indemnitee. After notice
from the Indemnifying Party to the Indemnitee of such election to so assume the
defense thereof, the Indemnifying Party shall not be liable to the Indemnitee
for any legal expenses of other counsel or any other expenses subsequently
incurred by the Indemnitee in connection with the defense thereof and the
Indemnitee agrees to cooperate fully with the Indemnifying Party and its
counsel in the defense against any such Asserted Liability. The Indemnitee
shall have the right to participate, at its own expense, in the defense of such
Asserted Liability provided that the Indemnifying Party in all instances shall
be responsible for directing and controlling the settlement of, or defense
against, such action. If the Indemnifying Party elects not to undertake to
settle or defend against the Asserted Liability, fails to notify the Indemnitee
of its election as herein provided, or does not accept its obligation to
indemnify under this Agreement, the Indemnitee may settle, compromise or defend
such Asserted Liability in the exercise of its exclusive discretion at the
expense of the Indemnifying Party and the Indemnifying Party shall promptly
reimburse the Indemnitee for the amount of all reasonable costs and expenses
incurred by the Indemnitee in connection with the settlement of or defense
against the Asserted Liability to the extent provided in Section 8.1(a) or
8.1(b), as the case may be, including its selection of counsel. If no
settlement of the Asserted Liability is entered into, the Indemnifying Party
shall promptly reimburse the Indemnitee for the amount of any judgment rendered
with respect to such Asserted Liability and all related, bona fide and
reasonable expenses incurred by the Indemnitee in defense against such action
to the extent recoverable under Section 8.1(a) or 8.1(b) as the case may be.
Except as specified herein, in no event shall an Indemnifying Party be liable
for any settlement effected without its consent, which will not be unreasonably
withheld. (c) Other Matters. Neither the Indemnifying Party nor the
Indemnitee shall, in the defense of any Asserted Liability, consent to entry of
any judgment or enter into any settlement agreement, except with the written
consent of the other party, which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to both the Indemnitee and
the Indemnifying Party of a release from all liability in respect of such
Asserted Liability. The Indemnifying Party and the Indemnitee shall each use
all commercially reasonable efforts to cooperate with each other in connection
with the settlement of, or the defense against, any 49




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Exhibit 10.44 Asserted Liability and make
available to the other all books, records and other documents within its
control that are reasonably necessary or appropriate for such defense.
Notwithstanding anything contained in this Agreement the Indemnitee shall have
the right to pay or settle at any time any Asserted Liability, provided that
(as a result thereof, and except where the Indemnifying Party elects not to
undertake to settle or defend against the Asserted Liability, fails to notify
the Indemnitee of its election, or does not accept its obligation to indemnify
under this Agreement) the Indemnitee shall also be deemed to have waived any
right to indemnification
therefore by the Indemnifying Party. Notwithstanding anything to the
contrary contained in any Transaction document, all claims against Company
Members and/or the Company for breach of representations, warranties or
covenants under any of the Transaction Documents shall be asserted, if at all,
exclusively as claims for indemnity under this Article VIII, regardless of
whether the claim is stated as a breach of representation, warranty or covenant
or otherwise. Section 8.4 Payment of Losses. The Indemnifying Party hereby
agrees to pay the amount of established Losses within 30 days after the
establishment thereof. The amount of established Losses shall be paid in cash
or, as applicable, from the Escrow Account. Any amounts not paid by the
Indemnifying Party when due under this Section shall bear interest from and
after the due date thereof until the date paid at a rate equal to the lesser
of: (a) 12% per annum and (b) the highest legal rate permitted by applicable
law. ARTICLE IX
CONDITIONS Section 9.1 Conditions to Each Partys Obligation to Effect the
Closing. The obligations of Company Members and the Company, on the one
hand, and Buyer and Parent, on the other hand, to consummate the Closing are
subject to the satisfaction (or, if permissible, waiver by the party for whose
benefit such conditions exist) of the following conditions: (a) no court, arbitrator or Governmental Entity shall have issued any
order, decree or ruling, or taken any other action permanently restraining,
enjoining or otherwise prohibiting the consummation of the transactions
contemplated by this Agreement and such order, decree, ruling or other action
shall have become final, and non-appealable; (b) all applicable waiting periods (and any extensions thereof) under the
HSR Act shall have expired or otherwise been terminated; (c) The Company and Buyer shall have executed and delivered the
Certificate of Merger to the Department of State at least five Business Days in
advance of Closing with a requested Statutory Effective Date of the Closing
Date; and (d) all other authorizations, approvals or consents of Governmental
Entities required to permit the consummation of the Transaction shall have been
obtained and be in full force and effect, including, the consent of DOH to the
transfer of control of the Company and the distribution by the Company to
Company Members of any excess funds and other assets without an obligation on
Buyer or Parent to restore and replenish any funds or other assets to the 50




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Exhibit 10.44 Company after the Closing Date and the Company shall not be required to
maintain a statutory deposit or net worth greater than that which exists for
the Company at the Effective Time except as provided in this Agreement. Section 9.2 Conditions to the Obligations of Buyer and Parent. The
obligations of Buyer and Parent to consummate the Transaction are subject to
the satisfaction (or waiver in whole or in part by Buyer and Parent) of the
following further conditions: (a) Delivery of Documents. (i) Each of the following conditions shall have been satisfied and Buyer
shall have received a certificate from each of Company Members and the Company
dated as of the Closing Date, certifying to such: (A) Each of the representations and warranties of such Company Member or
the Company, as applicable, shall be true and accurate in all material respects
as of the date hereof and as of the Closing Date as if made at and as of such
time (other than those representations and warranties that address matters only
as of a particular date or only with respect to a specific period of time which
need to be true and accurate only as of such date or with respect to such
period, and giving effect to all limitations as to materiality and Material
Adverse Effect set forth in such representations and warranties); and (B) Such Company Member or the Company, as applicable, has performed and
complied in all material respects with all of the terms, covenants, agreements,
undertakings, acts, conditions and obligations hereunder required to be
performed or complied with by it at or before the Closing Date. (ii) Buyer shall have received a certificate from the Company and each
entity Company Member signed by its Secretary or other proper officer or
manager and dated the Closing Date, certifying as to the person executing this
Agreement on behalf of the Company that (a) such person is an officer thereof
holding the office or offices specified therein, (b) that the signature of each
such person set forth on such certificate is his or her genuine signature and
(c) such person is duly authorized to execute this Agreement. (iii) Except as provided in Article VII above, Buyer shall have received
duly executed resignations from all of the Companys managers effective as of
the Closing Date. (iv) Buyer shall have received from counsel to the Company an opinion in
form and substance as set forth in Exhibit E, addressed to Buyer and
dated as of the Closing Date. (v) The Company shall have delivered to Escrow Agent funds as set forth in
Section 2.5(d) and Agent and Escrow Agent shall have executed and delivered to
Buyer the Escrow Agreement in the form attached as Exhibit B. (vi) Buyer and Parent shall have received a Members Closing
Acknowledgment and Release from each Company Member and, where necessitated by 51




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Exhibit 10.44 applicable state law, the spouse of each Company Member, if any, in the form
attached hereto as Exhibit G executed in such Company Members or, as
applicable, such spouses individual capacity. (vii) Buyer and Parent shall receive for cancellation from Signing Members
certificates for the Membership Interests. (viii) Buyer and Parent shall have received duly executed copies of the
Company Members Agent Agreement signed by all Signing Members. (ix) Buyer and Parent shall have received the Company Members Agent
Agreement executed by each of the Companys Members and the Agent they appoint.
The same Agent shall be appointed for all Company Members. (x) The Company or Agent shall have delivered to Buyer or Parent such
other Closing documents as Buyer or Parent may reasonably request. (b) Consent and Approvals. (i) Any required consents or approvals as set forth in the Company
Disclosure Schedule of parties to the Material Agreements with respect to the
Merger of the Company shall have been obtained; provided, however, the Company
need only use best efforts to obtain landlord estoppel certificates with
respect to the Real Property. (ii) There shall not have occurred any event or occurrence and there shall
not have occurred or been initiated any regulatory change that is reasonably
likely to have a Material Adverse Effect on the Company, the Business or the
Assets after Closing. (c) All Company Members shall be Signing Members or Dissenting Members. Section 9.3 Conditions to the Obligations of Company and Company
Members. The obligations of the Company and Company Members to consummate
the transactions contemplated hereby are subject to the satisfaction (or waiver
in whole or in part by Company Members) of the following conditions: (a) Each of the following conditions shall have been satisfied and Agent
and the Company shall have received a certificate signed by an executive
officer of Buyer, dated as of the Closing Date, certifying to such: (i) Each of the representations and warranties of Buyer and Parent shall
be true and accurate in all material respects as of the date hereof and as of
the Closing Date as if made at and as of such time (other than those
representations and warranties that address matters only as of a particular
date or only with respect to a specific period of time which need to be true
and accurate only as of such date or with respect to such period, and giving
effect to all limitations as materiality and Material Adverse Effect set
forth in such representations and warranties); and 52




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Exhibit 10.44 (ii) Buyer and Parent shall have performed and complied with in all
material respects all of the terms, covenants, agreements, undertakings, acts,
conditions and obligations hereunder required to be performed or complied with
by Buyer and Parent at or before the Closing Date. (b) Agent shall have received a certificate from each of Buyer and Parent,
signed by its Secretary and dated as of the Closing Date, certifying as to the
person executing this Agreement on behalf of Buyer or Parent, as applicable,
and providing with respect to the certificate referred to in Section 9.2(a)(ii)
that (a) such person is an officer thereof holding the office or offices
specified therein, (b) the signature of each such person set forth on such
certificate is his or her genuine signature, and (c) such person is duly
authorized to execute this Agreement. (c) Parent shall have paid to Agent the Closing Cash Amount less
Dissenters Withhold Amount, if any, and to Escrow Agent the Dissenters
Withhold Amount in the manner specified in Section 2.2(a)(ii) of this
Agreement. (d) The Parent and Escrow Agent shall have executed and delivered to Agent
the Escrow Agreement substantially in the form attached as Exhibit B. (e) Company Members and the Company shall have received from counsel to
Buyer and Parent an opinion in form and substance as set forth in Exhibit
F, addressed to Company Members and dated as of the Closing Date. ARTICLE X
TERMINATION Section 10.1 Termination. Anything herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated and the transactions
contemplated herein may be abandoned at any time before the Closing Date: (a) by the mutual written consent of the Company and Buyer; or (b) by either the Company or Buyer: (i) if the Closing shall not have occurred on or before April 30, 2005;
provided, however, that the right to terminate this Agreement under this
Section 10.1(b)(i) shall not be available to any party whose failure to fulfill
any obligation under this Agreement has been the cause of, or resulted in, the
failure of the Closing to occur on or before such date, or (ii) if any Governmental Entity shall have issued an order, decree or
ruling or taken any other action (which order, decree, ruling or other action
the parties shall use commercially reasonable efforts to have removed or
vacated), in each case permanently 53




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Exhibit 10.44 restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement, and such order,
decree, ruling or other action shall have become final and non-appealable; or (c) by the Company if Buyer (x) breaches or fails in any material respect
to perform or comply with any of its covenants and agreements contained herein
or (y) breaches its representations and warranties in any respect and such
breach results in or reasonably could be expected to result in a Material
Adverse Effect in each case such that the conditions set forth in Section 9.1
or Section 9.3 would not be satisfied; provided, however, that if any such
breach is curable by Buyer through the exercise of Buyers commercially
reasonable efforts then for so long as Buyer shall be so using such efforts to
cure such breach, Company Members shall not terminate this Agreement pursuant
to this Section 10.1(c) except as permitted by Section 10.1(b)(i); or (d) by Buyer if the Company or a Company Member (x) breaches or fails in
any material respect to perform or comply with any of its covenants and
agreements contained herein or (y) breaches its representations and warranties
in any respect and, in either case, such breach results in or reasonably could
be expected to result in a Material Adverse Effect, in each case such that the
conditions set forth in Section 9.1 or Section 9.2 would not be satisfied;
provided, however, that if any such breach is curable by Company Members
through the exercise of Company Members commercially reasonable efforts then
for so long as Company Members shall be so using such efforts to cure such
breach, Buyer shall not terminate this Agreement pursuant to this Section
10.1(d) except as permitted by Section 10.1(b)(i). Section 10.2 Procedure and Effect of Termination. On the
termination and abandonment of this Agreement by the Company or Buyer pursuant
to Section 10.1, written notice thereof shall be given to the other party. If
the transactions contemplated by this Agreement are terminated as provided
herein and pursuant to Section 10.1: (a) each party will return all documents, work papers and other material
of any other party relating to the transactions contemplated hereby, whether so
obtained before or after the execution hereof, to the party furnishing the
same; (b) all confidential information received by either party with respect to
the business of any other party or its subsidiaries or Affiliates shall be
treated in accordance with the provisions of the Confidentiality Agreement,
which shall survive the termination of this Agreement; (c) neither party will have any liability under this Agreement to the
other except (i) as stated in subparagraphs (a) and (b) of this Section 10.2;
(ii) for any willful breach of any provision of this Agreement; and (iii) as
provided in the Confidentiality Agreement; and (d) if neither Buyer nor the Company is in breach of any material
provision of this Agreement, this Agreement shall be void and shall no longer
be of any force or effect. 54




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Exhibit 10.44 ARTICLE XI
MISCELLANEOUS Section 11.1 Governing Law and Consent to Jurisdiction. (a) This Agreement will be governed in all respects, including validity,
interpretation and effect, by the laws of the State of New York (irrespective
of its choice of law principles) applicable to contracts executed and to be
performed wholly within such state. (b) Subject to the arbitration provisions of Section 11.2 below, each of
the parties hereto (i) irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York, specifically the Supreme Court of the County
of New York (and the courts having jurisdiction over appeals therefrom) in
respect of the Transaction, (ii) agrees that it will not attempt to deny or
defeat the jurisdiction of such courts by motion or other request for leave
from any such court, (iii) waives any claim that such proceedings have been
brought in an inconvenient forum, and (iv) agrees that it will not bring any
action relating to this Agreement in any court other than a New York state
court, located in the County of New York. Section 11.2 Dispute Resolution. (a) Agreement to Arbitrate. Except as provided in Sections
2.2(d), 2.2(e) and 2.3(b), and except where injunctive relief is reasonably
necessary to prevent immediate damage to the aggrieved party, in a dispute
between the parties relating to this Agreement, the parties agree to utilize
the arbitration procedure specified in this Section; provided, however,that in
the event of a purported breach of the Agreement, the injured party shall
provide notice to the breaching party and allow a period of 20 days to cure the
breach prior to initiating arbitration (b) Initial Notice; Attempted Settlement. A party seeking to
initiate an arbitration proceeding shall give written notice (the Initial
Notice) to the other party describing briefly the nature of its dispute and
its claim and identifying an individual with authority to settle such dispute
on its behalf (the Settlement Agent). The party receiving such notice shall
have ten (10) days within which to designate its own Settlement Agent. The
Settlement Agents shall make such investigations as they deem appropriate and
thereafter promptly shall commence discussions concerning resolution of such
dispute. (c) Selection of Arbitrator. If the dispute has not been resolved
within the later of (i) 15 days from the date of designation of a Settlement
Agent by the party receiving the Initial Notice or (ii) 25 days from the giving
of the Initial Notice, it shall be submitted to a panel of arbitrators (the
Arbitrators), one chosen by each of the parties. Unless otherwise agreed by
the parties, the Arbitrators shall hold a hearing in New York, New York
pursuant to the then current Commercial Arbitration Rules of the American
Arbitration Association (AAA) within 30 days after their selection by the
parties, in advance of which the parties shall submit whatever information they
deem appropriate to the Arbitrators for review. The Arbitrators may allow
discovery on such terms as the Arbitrators determine necessary or appropriate
for a proper decision. At the hearing held by the Arbitrators, each party
shall have the opportunity to present its position with respect to the dispute.
The Arbitrators shall thereafter render their opinion within 15 days of
such hearing. If the two Arbitrators cannot reach a decision, they shall
mutually pick a third arbitrator who shall resolve the dispute. 55




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Exhibit 10.44 (d) Cure of Breach. For purposes of this Section, if a dispute is
based on the breach of any representation, warranty, covenant, obligation or
any other agreement contained herein, and such breach is cured to the actual
knowledge of the party giving the Initial Notice within 15 days from the date
of designation of a Settlement Agent by the party receiving the Initial Notice,
the party giving the Initial Notice shall withdraw or shall be liable for the
costs of any arbitration that results in a finding that such cure has occurred. (e) Arbitrators Award. The opinions and recommendations of the
Arbitrators shall be binding on the parties and judgment upon the award
rendered by the Arbitrators may be entered in any court having jurisdiction
thereof, provided, however, that expenses and attorney fees may only be awarded
to a party upon a finding of bad faith by the other party. In no event may the
Arbitrators award exceed the limits of liability set forth in Article VIII. Section 11.3 Amendment and Modification. Subject to applicable
law, this Agreement may be amended, modified and supplemented in any and all
respects only by written agreement of the parties at any time before the
Closing Date with respect to any of the terms contained herein. Section 11.4 Notices. All notices, consents and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) on the Business Day (or the next succeeding Business Day if the
date of delivery is not a Business Day) when delivered by hand or by Federal
Express, UPS or a similar commercial overnight courier with provisions for a
receipt; (b) five days after being deposited in any United States Post Office
postage prepaid, registered or certified mail; or (c) on the Business Day (or
the next succeeding Business Day if the date of delivery is not a Business Day)
when successfully transmitted by telecopier (with a confirming copy of such
communication to be sent as provided in clauses (a) or (b) above), to the
receiving party at the address or telecopier number set forth below (or at such
other address or telecopier number for a party as shall be specified by like
notice); provided, howeverthat any notice of change of address or telecopier
number shall be effective only upon receipt: (a)
    
    if to Buyer or Parent, to:AMERIGROUP Corporation4425 Corporation Lane, Suite 300Virginia Beach, VA 23462Telephone: (757) 490-6900Telecopy No.: (757) 557-6743Attention: General Counsel
 56




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Exhibit 10.44 with a copy (which shall not constitute notice) to:Williams Mullen, A Professional Corporation222 Central Park Avenue, Suite 1700Virginia Beach, VA 23462Telephone: (757) 499-8800Telecopy No: (757) 473-0395Attention: Thomas R. Frantz, Esq.(b)(i)
    
    If to the Company, to:Careplus, LLC260 West 31st StreetNew York, NY 10001Attention: President(ii)
    
    if to Company Members, to:Joseph Zappala, Agentc/o CarePlus, LLC260 West 31st StreetNew York, New York 10001Telephone: (212) 563-5570Telecopy: (212) 563-5975with a copy with respect to (i) and (ii) above (whichshall not constitute notice) to:Greenberg Traurig, LLP54 State Street, 6th FloorAlbany, New York 12207Telephone: (518) 689-1400Telecopy: (518) 689-1499Attention: Harold N. Iselin, Esq.andKurzman Eisenberg Corbin Lever & Goodman, LLPOne North Broadway, 10th FloorWhite Plains, New York 10601Telephone: (914) 993-6051Telecopy: (914) 285-9855Attention: Stephen R. Levy, Esq.
 57




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Exhibit 10.44 Section 11.5 Interpretation. (a) The words hereof, herein and herewith and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement, and
references to article, section, paragraph, exhibit and schedule are to the
articles, sections, paragraphs, exhibits and schedules of this Agreement unless
otherwise specified. The words describing the singular number shall include
the plural and vice versa, and words denoting any genders shall include all
genders. Whenever the words include, includes or including are used in
this Agreement, they shall be deemed to be followed by the words without
limitation. The parties have participated jointly in the negotiation and
drafting of this Agreement. If an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement. (b) The Company Disclosure Schedule and the other schedules hereto shall
be construed with and as an integral part of this Agreement as if the same had
been set forth verbatim herein. Any matter disclosed pursuant to any schedule
shall be deemed to be disclosed for the purpose indicated on such schedule, but
such disclosure shall not be deemed to be an admission or representation as to
the materiality of the item so disclosed. (c) Headings are for convenience of the parties only and shall be given no
substantive or interpretative effect whatsoever. Section 11.6 Counterparts. This Agreement may be executed in
multiple counterparts, each of which when executed and delivered shall be
deemed an original, and all of which shall together be considered one and the
same agreement. Section 11.7 Entire Agreements; Third Party Beneficiaries. This
Agreement and the Schedules hereto, and the Ancillary Agreements and the
Confidentiality Agreement (i) constitute the entire agreement of the parties
and supersede all prior negotiations, discussions, disclosures, representations
and warranties, agreements and understandings, if any, both written and oral,
among the parties with respect to the subject matter hereof; and (ii) except as
specifically provided herein, is not intended to nor shall it confer, upon any
Person other than the parties hereto and their successors and permitted assigns
any rights, benefits, claims, or remedies hereunder. Section 11.8 Partial Invalidity. Whenever possible, each
provision of this Agreement shall be interpreted in such a manner as to be
effective and valid under applicable law, but in case any one or more of the
provisions contained in this Agreement shall, for any reason, be held to be
invalid, illegal or unenforceable, this Agreement shall be construed as if such
illegal or unenforceable provision or provisions had never been contained in
this Agreement unless the deletion of such provision or
provisions would result in such a material change as to cause completion
of the transactions contemplated hereby to be unreasonable. 58




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Exhibit 10.44 Section 11.9 Service of Process. Each party irrevocably consents
to the service of process outside the territorial jurisdiction of the courts
referred to in Section 11.1 hereof in any such action or proceeding by having
copies thereof mailed by registered United States mail, postage prepaid, return
receipt requested, to its address as specified in or pursuant to Section 11.4
hereof. However, the foregoing shall not limit the right of a party to effect
service of process on the other party by any other legally available method. Section 11.10 Specific Performance. Each party acknowledges and
agrees that in the event of any breach of this Agreement each non-breaching
party would be irreparably and immediately harmed and could not be made whole
by monetary damages. It is accordingly agreed that the parties will (a) waive,
in any action for specific performance, the defense of adequacy of a remedy at
law, and (b) be entitled, in addition to any other remedy to which they may be
entitled at law or in equity, to compel specific performance of this Agreement
in any action instituted in accordance with Section 11.2. Section 11.11 Assignment; Binding Agreement. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned, in whole or in part, by either party (whether by operation of law or
otherwise) without the prior written consent of the other party. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective permitted
successors and assigns. Section 11.12 Expenses. (a) Except as otherwise provided herein, all costs and expenses incurred
in connection with the transactions contemplated by this Agreement and the
consummation of the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the transactions contemplated
hereby are consummated. (b) The Company shall be responsible for all costs and expenses associated
with all Provider and Member communications and materials sent by either the
Company or Buyer, which costs and expense shall be paid before the Closing or
appropriately reserved for on the Closing Balance Sheet. Company Members shall
be responsible for all legal expenses of Company Members incurred in connection
with the transactions contemplated by this Agreement, and all costs associated
with the Companys obligation to pay Banc of America Securities for
underwriting and investment services. (c) The filing fees required under the HSR Act shall be shared 50% by
Company Members and 50% by Buyer, and Agent shall deduct Company Members share
from the Closing Cash Amount at Closing. Section 11.13 Waivers. Except as otherwise provided in this
Agreement, any failure of either party to comply with any obligation, covenant,
agreement or condition herein may, to the extent permitted by applicable law,
be waived by the party or parties entitled to the benefits thereof only by a
written instrument signed by the party granting such waiver, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. 59




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Exhibit 10.44 Section 11.14 No Double Recovery. Notwithstanding anything herein
to the contrary, no party shall be entitled to indemnification or reimbursement
under any provision of this Agreement for any amount to the extent such party
has been indemnified or reimbursed for such amount under any other provision of
this Agreement. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 60




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Exhibit 10.44 IN WITNESS WHEREOF, the parties hereto have caused this Merger Agreement
to be signed by their respective officers thereunto duly authorized as of the
date first written above. COMPANY MEMBERS:KARIN AJMANI  as to Section 6.15JOSEPH ZAPPALA  as to Section 6.15COMPANY:
    
    CAREPLUS, LLCBy:Name:Title:BUYER:
    
    AMERIGROUP ACQUISITION CORP., a New York corporationBy:Name: Stanley F. BaldwinTitle: Executive Vice PresidentPARENT:
    
    AMERIGROUP CORPORATION, a Delaware corporationBy:Name: Stanley F. BaldwinTitle: Executive Vice President
 61




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Exhibit 10.44 EXHIBIT A COMPANY MEMBERS Karin Ajmani
Breindy Melnicke
Joseph Zappala
John Moore
Catherine Muhly
Jerome V. Ansel
Yitzchok (Isaac) Schwartz
Leiser Capital, L.L.C.
Leiser 2, LLC
Karen Chobor Lawson
John Moore Industries Inc.
Leon Kraus
Isaac Litchfield
Sandra Tenzer
Moses Werzberger
Steve Slobodski 62