Document:

exhibit101evh_molinaapa

                                            Exhibit 10.1                                                                                                  [Execution Copy]                                                                                                                                                                    ASSET PURCHASE AGREEMENT          BY AND AMONG   PASSPORT HEALTH PLAN, INC.,       EVOLENT HEALTH LLC,                AND     MOLINA HEALTHCARE, INC.                       DATED AS OF JULY 16, 2020                 -1-                                 

 

                                TABLE OF CONTENTS                                                                            Page   ARTICLE I PURCHASE OF ASSETS ........................................................................................................ 2        Section 1.1 Acquired Assets ..................................................................................................... 2        Section 1.2 Excluded Assets ..................................................................................................... 3        Section 1.3 Assumed Liabilities ............................................................................................... 5        Section 1.4 Excluded Liabilities ............................................................................................... 5        Section 1.5 Misdirected Payments ............................................................................................ 5        Section 1.6 Unassignable Contracts .......................................................................................... 5        Section 1.7 Purchase Price. ....................................................................................................... 6        Section 1.8 Allocation .............................................................................................................. 8  ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER.................................................. 8        Section 2.1 Organization and Standing ..................................................................................... 8        Section 2.2 Title ........................................................................................................................ 8        Section 2.3 No Undisclosed Liabilities ..................................................................................... 9        Section 2.4 Litigation, Etc ........................................................................................................ 9        Section 2.5 Compliance with Laws. ......................................................................................... 9        Section 2.6 No Conflict With Other Documents .................................................................... 11        Section 2.7 Authority .............................................................................................................. 11        Section 2.8 Absence of Certain Changes ................................................................................ 11        Section 2.9 Governmental Authorizations .............................................................................. 12        Section 2.10 Privacy and Information Security. ....................................................................... 12        Section 2.11 Taxes .................................................................................................................... 13        Section 2.12 Employees and Employee Benefits ..................................................................... 13        Section 2.13 Material Contracts................................................................................................ 16        Section 2.14 Intellectual Property ............................................................................................. 17        Section 2.15 Real Property. ...................................................................................................... 18        Section 2.16 Material Vendors and Top Providers. .................................................................. 18        Section 2.17 Financial Statements ............................................................................................ 19        Section 2.18 Books and Records .............................................................................................. 19        Section 2.19 Insurance .............................................................................................................. 19        Section 2.20 No Finder’s Fee ................................................................................................... 19        Section 2.21 No Other Representations .................................................................................... 19  ARTICLE III REPRESENTATIONS AND WARRANTIES OF Buyer ................................................... 20        Section 3.1 Organization and Standing ................................................................................... 20                                         -i-                                            

 

         Section 3.2 Ability to Operate Medicaid Business ................................................................. 20        Section 3.3 Compliance with Laws. ....................................................................................... 20        Section 3.4 No Conflict With Other Documents .................................................................... 20        Section 3.5 Authority .............................................................................................................. 20        Section 3.6 Litigation, Etc ...................................................................................................... 21        Section 3.7 Financing ............................................................................................................. 21        Section 3.8 Governmental Authorizations .............................................................................. 21        Section 3.9 No Finder’s Fee ................................................................................................... 21        Section 3.10 No Other Representations .................................................................................... 21  ARTICLE IV Certain Covenants ................................................................................................................ 21        Section 4.1 Certain Efforts to Close Transactions .................................................................. 21        Section 4.2 Novations. ............................................................................................................ 22        Section 4.3 Further Assurances .............................................................................................. 23        Section 4.4 Confidentiality. .................................................................................................... 24        Section 4.5 Exclusivity ........................................................................................................... 24        Section 4.6 Conduct of Business Prior to Complete Transfer. ............................................... 24        Section 4.7 Employees. ........................................................................................................... 26        Section 4.8 Other Closing Deliverables .................................................................................. 28        Section 4.9 Transition Services Agreement ............................................................................ 29        Section 4.10 Public Announcements ........................................................................................ 29        Section 4.11 Access; Preservation of Records. ......................................................................... 29        Section 4.12 Notification and Effect of Certain Matters .......................................................... 30        Section 4.13 Transfer Taxes ..................................................................................................... 30        Section 4.14 Restrictive Covenants .......................................................................................... 30        Section 4.15 D-SNP Administrative Services Agreement ........................................................ 31        Section 4.16 2022 D-SNP Bid .................................................................................................. 31        Section 4.17 Seller Name ......................................................................................................... 31  ARTICLE V Closing and Closing Deliveries ............................................................................................. 31        Section 5.1 Closing ................................................................................................................. 31        Section 5.2 Closing Deliveries by Seller ................................................................................ 31        Section 5.3 Closing Deliveries by Buyer ................................................................................ 33  ARTICLE VI CONDITIONS TO OBLIGATIONS TO CLOSE ............................................................... 33        Section 6.1 Conditions to Obligation of Buyer to Closing ..................................................... 33        Section 6.2 Conditions to Obligation of Seller and Evolent to Closing ................................. 34                                         -ii-                                            

 

         Section 6.3 Conditions to Obligation of Each Party to Closing in Connection with the                    Medicaid Novation .............................................................................................. 35        Section 6.4 Conditions to Obligation of Each Party to Closing in Connection with the                    D-SNP Novation .................................................................................................. 35  ARTICLE VII INDEMNIFICATION ........................................................................................................ 35        Section 7.1 Survival ................................................................................................................ 35        Section 7.2 Indemnification and Reimbursement By Seller ................................................... 36        Section 7.3 Indemnification and Reimbursement by Buyer ................................................... 36        Section 7.4 Limitations on Indemnification by Seller ............................................................ 37        Section 7.5 Time Limitations.................................................................................................. 37        Section 7.6 Third-Party Claims. ............................................................................................. 37        Section 7.7 Procedure For Indemnification – Other Claims ................................................... 38        Section 7.8 Additional Limitations. ........................................................................................ 38        Section 7.9 Exclusive Remedy ............................................................................................... 39        Section 7.10 Treatment of Indemnification Payments .............................................................. 39  ARTICLE VIII Termination; Unwind ........................................................................................................ 39        Section 8.1 Termination .......................................................................................................... 39        Section 8.2 Effect of Termination ........................................................................................... 40        Section 8.3 Unwind ................................................................................................................ 40  ARTICLE IX GENERAL PROVISIONS .................................................................................................. 41        Section 9.1 Expenses .............................................................................................................. 41        Section 9.2 Assignment; No Third Party Beneficiaries .......................................................... 41        Section 9.3 Notices ................................................................................................................. 41        Section 9.4 Waiver .................................................................................................................. 42        Section 9.5 Entire Agreement; Modification .......................................................................... 42        Section 9.6 Severability .......................................................................................................... 42        Section 9.7 Headings; Construction ........................................................................................ 42        Section 9.8 Governing Law .................................................................................................... 43        Section 9.9 Execution of Agreement; Counterparts ............................................................... 43        Section 9.10 Enforcement of Agreement .................................................................................. 43        Section 9.11 Guarantee. ............................................................................................................ 43        Section 9.12 Waiver of Jury Trial ............................................................................................. 44                                                 -iii-                                            

 

                           ASSET PURCHASE AGREEMENT         This Asset Purchase Agreement (this “Agreement”), made and entered into as of July 16, 2020, is  by  and  among  Passport  Health  Plan,  Inc.,  a  Kentucky  corporation  (“Seller”),  Evolent  Health  LLC,  a  Delaware  limited  liability  company  (“Evolent”),  and  Molina  Healthcare,  Inc.,  a  Delaware  corporation  (“Buyer”).  Capitalized terms  used  herein  but  not  otherwise  defined  are  set forth  in  Annex  A,  attached  hereto. Buyer, Seller, and Evolent are sometimes referred to herein individually as a “Party” and jointly as  the “Parties.”                                     RECITALS   A.    Seller operates a business that administers and delivers Medicaid managed care benefits in the        Commonwealth  of  Kentucky  (the  “Medicaid  Business”)  pursuant  to  that  certain  Contract  for        Medicaid Managed Care Services between the Commonwealth of Kentucky, the Kentucky Cabinet        for  Health  and  Family  Services  (“CHFS”)  and  Seller,  dated  July  1,  2015  and  as  amended,        supplemented and renewed from time to time (the “CHFS Medicaid Contract”), and administers        and  reinsures  a  business  owned  and  operated  by  University  Health  Care,  Inc.  (“UHC”)  that        administers and delivers managed care benefits in the Commonwealth of Kentucky through the D-       SNP Contract (the “D-SNP Business” and together with the Medicaid Business, the “Business”).   B.    Seller is a party to that certain Asset Purchase Agreement (the “UHC APA”), dated as of May 28,        2019 and as amended on December 30, 2019 and March 31, 2020, by and among UHC, Passport        Health Solutions, LLC (“PHS”), Seller and Evolent Health, Inc., pursuant to which, among other        things, Seller acquired the CHFS Medicaid Contract and certain other assets from UHC.   C.    Pursuant to the terms of the UHC APA, Seller is to acquire,  amongst other things, the D-SNP        Contract  from  UHC and  certain  real  property  from  UHC  and  PHS  subject  to  the  terms  and        conditions set forth therein.   D.    Evolent provides administrative and management services for the Business pursuant to that certain        Services  Agreement,  dated  as  of  December  16,  2015,  by  and  between  Evolent  and  Seller  (as        amended from time to time, the “Services Agreement”), and that certain Administrative Services        and Employee Lease Agreement, dated as of December 30, 2019, by and between UHC and Seller        (the “UHC Services Agreement”).   E.    In connection with the Request for Proposal 758 2000000202, published on January 10, 2020, and        closed on February 7, 2020 issued by CHFS with respect to the issuance of Medicaid contracts for        plan year 2021 and the subsequent years included therein (the “RFP”), Buyer’s Affiliate, Molina        Healthcare  of  Kentucky,  Inc.,  a  Kentucky  corporation  (the  “Molina  Plan”),  was  awarded  a        Medicaid contract.   F.    Seller’s CHFS Medicaid Contract is anticipated to terminate effective 11:59 p.m. on December 31,        2020.   G.    Seller  has  determined  that  it  is  in  the  best  interest  of  its  shareholders,  the  Commonwealth  of        Kentucky and the Enrollees to consider strategic alternatives for the ownership and operation of        the Business and the ownership of the Acquired Assets, including the sale of the Acquired Assets        to a qualified owner and operator that will continue the Business’ operations primarily in Louisville,        Kentucky.                                         -1-                                            

 

   H.    The  Parties  believe  that  a  transaction  in  which  Buyer  acquires  the  Acquired  Assets  will  allow        Buyer, working with Seller, to provide continuity of care to the Enrollees in connection with the        transition of the Enrollees to a new Medicaid contract effective 12:00 a.m. on January 1, 2021 and        Dual Eligible Special Needs Plan contract effective 12:00 a.m. on January 1, 2022.   I.    Each Party desires that Seller sell, convey, transfer and assign to Buyer, and that Buyer purchase,        acquire and accept from Seller the Acquired Assets, and that Buyer assume certain liabilities of        Seller or UHC related thereto, all upon and subject to the terms herein.   J.    Concurrently with the execution and delivery of this Agreement, and as a condition and inducement        to the Parties’ willingness to enter into this Agreement, the Parties have entered into the Real Estate        Purchase Agreement.                                   AGREEMENT         In consideration of the foregoing and the representations, warranties, covenants and agreements in  this Agreement and other good and valuable consideration, the receipt and adequacy of which is hereby  acknowledged, and incorporating the above recitals with and into this Agreement, each Party hereby agrees  as follows:                                     ARTICLE I                              PURCHASE OF ASSETS                Section 1.1 Acquired Assets.  Upon the terms and subject to the conditions set forth  in this Agreement, at the Closing but subject to the terms of the Bill of Sale, Seller shall sell, convey, assign,  transfer and deliver to Buyer, and Buyer shall purchase and acquire from Seller, free and clear of any  Encumbrances  (other  than  contractual  obligations  arising  following  the  effectiveness  of  the  applicable  Transfer Date under any Contract assumed by Buyer pursuant to the terms hereof), all of Seller’s right, title  and interest to the Acquired Assets.  “Acquired Assets” means all of the following assets, but excluding  any Excluded Asset:                     (a)   all of the Seller’s rights to the following: (i) the Intellectual Property assets  set  forth  on  Annex 1.1(a);  and  (ii)  Seller’s  trade  names,  logos,  service  marks  and  trademarks  and  any  variation or forms thereof, including the name “Passport Health Plan” (the “Seller Intellectual Property”);                     (b)   subject to the receipt of the Required Medicaid Regulatory Approvals and  consummation of the Medicaid Novation, all of Seller’s rights and interests in the CHFS Medicaid Contract  to the extent arising on or after the CHFS Medicaid Contract Transfer Date and all rights to provide services  to Medicaid Enrollees in Seller’s health plans comprising the Medicaid Business and the corresponding  revenues  (including  bonuses)  payable  by  payors  with  respect  to  such  Medicaid  Enrollees  (and  other  individuals) to the extent such revenues (including bonuses) relate to dates of service that occur on or after  the CHFS Medicaid Contract Transfer Date;                     (c)   subject to the receipt of the Required D-SNP Regulatory Approvals and  consummation of the D-SNP Novation and the terms of the New Reinsurance Agreement,  all of Seller’s  or UHC’s rights and interests in the D-SNP Contract to the extent arising on or after the D-SNP Contract  Transfer Date and all rights to provide services to D-SNP Enrollees in Seller’s or UHC’s health plans  comprising the D-SNP Business and the corresponding revenues (including bonuses) payable by payors  with  respect  to  such  D-SNP  Enrollees  (and  other  individuals)  to  the  extent  such  revenues  (including  bonuses) relate to dates of service that occur on or after the D-SNP Contract Transfer Date;                                         -2-                                            

 

                     (d)   all Records relating to the Business and the other Acquired Assets (for the  avoidance of doubt, other than the Excluded Records), including all customer, Enrollee, supplier and service  provider lists, all employee records (to the extent permitted by applicable Legal Requirements) related to  the Seller Employees and Provider records, and similar information used in Seller’s performance and/or  administration of the CHFS Medicaid Contract, the D-SNP Contract and/or the Business, all other contact  information, mailing lists and similar files; provided, however, that (A) no Records related to the CHFS  Medicaid  Contract  and  the  D-SNP  Contract  shall  be  Acquired  Assets  unless  and  until  the  applicable  Required Regulatory Approvals are obtained, (B) all Records will be provided to Buyer in the same format  as maintained by Seller (or on behalf of Seller) and only in accordance with and to the extent permitted  under applicable Legal Requirements and will not include any personally identifiable health records relating  to Enrollees except to the extent required to operate the Business, (C) Buyer’s rights to use the Records  shall  be  subject  to  any  reasonable  limitations  required  in  order  to  comply  with  applicable  Legal  Requirements, (D) Seller shall be permitted to retain copies of all such Records, and (E) to the extent that  any  Records  maintained  by  Seller  relate  to  the  Business  but  do  not  solely  relate  to  the  Business,  the  Acquired Assets described in this Section 1.1(d) shall only include the portion of such Records that relates  specifically to the Business;                     (e)   subject  to  Section  1.6,  each Contract  with  a  Provider  (a  “Provider  Contract”) or other third party set forth on Annex 1.1(e), which such Annex may be updated by Buyer no  later than December 29, 2020, subject to the written approval of Seller (which shall not be unreasonably  withheld, conditioned or delayed), and each Seller Real Property Lease (collectively, the Contracts (or  portions thereof) referred to in subsections (b), (c) and (e) of this Section 1.1 and set forth on Annex 1.1(e)  are referred to herein as the “Assumed Contracts”);                     (f)   all furniture, fixtures, and improvements located on the Seller Lessee Real  Property;                     (g)   all  accounts  or  notes  receivable  or  any  other  consideration,  rights  to  payments due or becoming due any Assumed Contract to the extent arising from services performed on or  after the applicable Transfer Date of such Assumed Contract, and any security, claim, remedy or other right  related to any of the foregoing;                      (h)   all rights to any security deposit with respect to any Seller Lessee Real  Property Lease; and                     (i)   all goodwill associated with the foregoing.         Notwithstanding the foregoing, in the event the Required Regulatory Approvals are not obtained  and the Novations are not consummated prior to the Closing, the Assumed Contracts shall exclude the  Contracts (or portions thereof) set forth in subsections (b) and (c) of this Section 1.1) and any goodwill  associated therewith; provided, however, in the event the Required Medicaid Regulatory Approvals are  obtained and the Medicaid Novation is consummated following the Closing but prior to December 31, 2020,  the Contracts referred to in subsections (b) of this Section 1.1 shall become Assumed Contracts on the  CHFS Medicaid Contract Transfer Date; and further provided, in the event the Required D-SNP Regulatory  Approvals are obtained and the D-SNP Novation is consummated following the Closing, the Contract (or  portions thereof) referred to in subsection (c) of this Section 1.1 shall become an Assumed Contract on the  D-SNP Contract Transfer Date.               Section 1.2 Excluded Assets.  Notwithstanding anything herein to the contrary, the  following assets are not intended by the Parties to be a part of the transaction contemplated hereunder, are  excluded from the Acquired Assets, and are to be retained by Seller (the “Excluded Assets”):                                        -3-                                            

 

                     (a)   in  the  event  the  applicable  Required  Regulatory  Approvals  are  not  obtained  prior  to the  Closing  and the applicable  Novations are  not  consummated,  those  assets that  are  excluded by operation of the final paragraph of Section 1.1;                     (b)   all of Seller’s rights and interests in the CHFS Medicaid Contract to the  extent arising prior to the CHFS Medicaid Contract Transfer Date and all rights to provide services to  Medicaid Enrollees in Seller’s health plans comprising the Medicaid Business prior to the CHFS Medicaid  Contract Transfer Date, and the corresponding revenues (and bonuses) payable by payors with respect to  such Medicaid Enrollees (and other individuals) to the extent such revenues (including bonuses) relate to  dates of service that occur prior to or on the CHFS Medicaid Contract Transfer Date and, if applicable but  subject to the terms of the New Reinsurance Agreement, all of Seller’s rights and interests in the D-SNP  Contract to the extent arising prior to the D-SNP Contract Transfer Date and all rights to provide services  to D-SNP Enrollees in Seller’s health plans comprising the D-SNP Business prior to the D-SNP Contract  Transfer Date, and the corresponding revenues (and bonuses) payable by payors with respect to such D- SNP Enrollees (and other individuals) to the extent such revenues (including bonuses) relate to dates of  service that occur prior to or on the D-SNP Contract Transfer Date;                     (c)   all accounts or notes receivable or any other consideration, all rights to  payments due or becoming due under any Assumed Contract to the extent arising from services performed  prior to the applicable Transfer Date, and any security, claim, remedy or other right related to any of the  foregoing;                     (d)   all minute books and seals of Seller, all other documents relating to the  organization and existence of Seller, all Tax Returns and Tax Records of Seller and all other Records of  Seller to the extent not included the Acquired Assets (collectively, the “Excluded Records”);                     (e)   all Contracts to which Seller is a party or otherwise bound by other than  any  Assumed  Contract  (the  “Excluded  Contracts”),  including  the  Services  Agreement  and  the  UHC  Services Agreement;                     (f)   all Tax-related identification numbers of Seller;                     (g)   all  Tax  refunds  from  Governmental  Authorities  relating  to  Seller’s  operation of the Business (determined, to the extent necessary to carry out the intent of this Agreement, on  an Assumed Contract by Assumed Contract (or Acquired Asset by Acquired Asset) basis) with respect to  any Pre-Closing Tax Period, in each case net of any reasonable, documented out-of-pocket costs (including  Taxes) of the Buyer or its Affiliates incurred in connection with such refund or credit;                     (h)   all  cash, cash equivalents and regulatory capital and all bank accounts,  cash accounts, investment accounts, deposit accounts, lockboxes and other similar accounts of Seller;                     (i)   all rights and recoveries that are now, or at any time hereafter may become,  due to Seller under any Excluded Contract;                     (j)   all Governmental Authorizations and accreditations;                     (k)   all of Seller’s rights and interests in the UHC APA;                     (l)   all rights in connection with and any assets of Seller’s employee benefit  plans, including any Seller Benefit Plan;                                          -4-                                            

 

                     (m)   all other assets of Seller that are not an Acquired Asset; and                     (n)   all rights of Seller under this Agreement or any other Contract executed or  delivered by or on behalf of Seller in connection with the transactions contemplated under this Agreement.               Section 1.3 Assumed Liabilities.  Upon the terms and subject to the conditions set  forth in this Agreement, at the Closing, Buyer shall assume and agree to pay, perform and discharge when  due  all  Liabilities  arising  on  or  after  the  applicable  Transfer  Date  under  the  Assumed  Contracts,  but  excluding any Liability arising as a result of a breach thereof by Seller prior to the applicable Transfer Date  (collectively, the “Assumed Liabilities”). For the avoidance of doubt, the Assumed Liabilities shall exclude  all claims under the CHFS Medicaid Contract related to periods and dates of service prior to the CHFS  Medicaid Contract Transfer Date, including (i) incurred but not reported claims and incurred but not paid  claims, (ii) claims run-out, (iii) claims which were erroneously denied or improperly delayed, (iv) claims  which were improperly paid for any reason, and (v) any reporting obligations for any period before the  Closing.               Section 1.4 Excluded Liabilities.  Except for the Assumed Liabilities, Buyer will not  assume or become obligated with respect to any other Liability of Seller of any nature whatsoever, and  Seller shall  retain and shall  pay, discharge and perform any Liability of Seller that is  not an Assumed  Liability (the “Excluded Liabilities”).  The Excluded Liabilities shall remain the sole responsibility of and  shall be retained, paid, performed and discharged solely by Seller.               Section 1.5 Misdirected Payments.                       (a)   Seller shall promptly remit to Buyer any monies received by Seller on or  after  the  applicable  Transfer  Date  constituting  or  in  respect  of  the  Acquired  Assets  and  the  Assumed  Liabilities.  Buyer shall promptly remit to Seller any monies received by Buyer on or after the applicable  Transfer Date constituting or in respect of the Excluded Assets and any Excluded Liabilities.                     (b)   Solely  in  the  event  the  Required  Medicaid  Regulatory  Approvals  are  obtained and the Medicaid Novation is consummated, no more than once every twelve (12) months during  the two (2) years following the Closing, Buyer and Seller shall each have the right, upon thirty (30) days’  notice and at such Party’s expense, to audit the other Party’s books and records related to payments and  recoveries received from CHFS, CMS (if applicable) or other third parties with respect to the Business  following the applicable Transfer Date.               Section 1.6 Unassignable  Contracts.   Seller  and  Buyer  shall  use  commercially  reasonable efforts to obtain, prior to the Closing, and maintain until the applicable Transfer Date, all consents  and approvals, and to provide any notices, required with respect to the assignment of the Assumed Contracts  to Buyer effective as of the applicable Transfer Date; provided, however, that it shall not be a condition to the  Closing  that  any  such  consents  are  received  or  notice  provided  with  respect  to  any  Assumed  Contracts.   Notwithstanding anything herein to the contrary, to the extent that Seller’s rights under any Assumed Contract  may not be assigned to Buyer as of the applicable Transfer Date because any waiting or notice period has not  expired or any required consents or approvals have not been obtained or waived by the applicable third party,  then, Seller’s rights in such Contract shall not be assigned and such Contract shall not be an Assumed Contract  unless otherwise determined in writing by Buyer in which case Buyer shall indemnify the Seller Indemnified  Persons for any liabilities arising out of such determination.  In addition, to the extent requested by Buyer,  Seller and Buyer shall use commercially reasonable efforts to obtain estoppel letters and, if applicable,  subordination  and  non-disturbance  agreements  from  landlords  under  the  Seller  Lessee  Real  Property  Leases.                                          -5-                                            

 

               Section 1.7 Purchase Price.                     (a)   At the Closing, Buyer, Seller and Citibank N.A. (the “Escrow Agent”) will  enter  into  an  escrow  agreement  substantially  in  the  form  attached  hereto  as  Exhibit  A  the  “Escrow  Agreement”) and Buyer shall deposit into a mutually agreeable escrow account a deposit of Twenty Million  Dollars ($20,000,000), plus the amount of security deposits with respect to any Seller Lessee Real Property  Leases  as  set  forth  on  Schedule 1.7(a)  (the  “Closing  Purchase  Price”)  in  accordance  with  the  Escrow  Agreement.  The Closing Purchase Price shall be released to Seller on January 1, 2021; provided, however,  if this Agreement is terminated or the transactions contemplated herein are unwound in accordance with  ARTICLE VIII, the Closing Purchase Price shall be refunded to Buyer as set forth therein.                     (b)   No  later  than  twenty  (20)  days  following  the  expiration  of  the  Open  Enrollment Period, Seller shall deliver to Buyer the D-SNP Membership File that shows the number of D- SNP  Enrollees  enrolled  in  Seller’s  or  UHC’s  D-SNP  plan  as  of  the  first  Business  Day  immediately  following the expiration of the Open Enrollment Period.  Seller shall provide any supporting documentation  with respect thereto reasonably requested by Buyer.  No later than twenty (20) days following the expiration  of the Open Enrollment Period, Buyer shall deliver to Seller the CHFS Membership File that shows the  number  of  Medicaid  Enrollees  enrolled  in  the  Molina  Plan’s  health  plans  as  of  the  first  Business  Day  immediately following the expiration of the Open Enrollment Period together with its calculation of the  Membership Purchase Price, which shall take into account any dispute that Buyer has with respect to the  D-SNP Membership File delivered by Seller to Buyer.  Seller shall have ten (10) days to review the CHFS  Membership File and in the event Seller delivers a dispute notice to Buyer during such ten (10) day period  with respect to the determination of the Membership Purchase Price, the applicable provisions of Section  1.7(c)(ii) and Section 1.7(c)(iii) shall apply mutatis mutandis.  If Seller does not deliver a dispute notice  during such ten (10) day period, then the Membership Purchase Price calculated by Buyer shall be deemed  final, binding and conclusive.  In the event the number of Medicaid Enrollees enrolled in the Molina Plan’s  health plans and D-SNP Enrollees enrolled in Seller’s or UHC’s D-SNP plan as of the first Business Day  immediately following the expiration of the Open Enrollment Period is equal to or less than the Membership  Threshold, then the Membership Purchase Price shall be zero.  Subject to Section 1.7(c), within three (3)  Business Days following the final determination of the Membership Purchase Price, Buyer shall pay the  Membership Purchase Price to Seller by wire transfer of immediately available funds to the account(s)  designated by Seller.  Buyer shall ensure that the Molina Plan shall not take any action, or omit to take any  action, in violation of applicable Legal Requirements or otherwise in breach or violation of any Contract to  which the Molina Plan is a party which would reasonably be expected to result in a material decrease in the  number of Enrollees as of the expiration of the Open Enrollment Period.                      (c)   In  the  event  that  the  Required  Medicaid  Regulatory  Approvals  are  obtained and the Medicaid Novation has been consummated prior to January 1, 2021, then:                             (i)   no later than July 31, 2021, Buyer shall deliver to Seller an income  statement of the Business (the “Income Statement”) for the period of time between the Closing Date and  January 1, 2021 (the “Interim Period”), together with Buyer’s calculation of Operating Income derived  therefrom.  The Total Medical Expenses set forth on the Income Statement shall reflect the aggregate dollar  amount of (A) the total amount of Medical Claims incurred during the Interim Period which are paid by  June 30, 2021, (B) all recoveries and repayments of Medical Claims incurred during the Interim Period and  paid prior to January 1, 2021 which are applied, credited, offset or received by June 30, 2021 (including  repayments  or  recoveries  received  or  due  for  overpayments,  from  reinsurance  and  stop-loss  coverage,  subrogation and coordination of benefits), and (C) a good-faith estimate of net Medical Claims outstanding  for claims incurred during the Interim Period and that have not been paid by June 30, 2021, which such  good faith net estimate shall be prepared in accordance with actuarial sound practices and shall take into  account gross payments outstanding less any potential recoveries outstanding.                                         -6-                                            

 

                           (ii)  Seller  shall  have  thirty  (30)  days  from  the  date  on  which  the  Income  Statement  is  delivered  to  Seller  (the  “Review  Period”)  to  review  the  Income  Statement  and  calculation of Operating Income derived therefrom.  During such Review Period, Buyer shall (A) provide  Seller and its Representatives with reasonable access during normal business hours upon reasonable prior  notice to the relevant books, records (including work papers, schedules, memoranda and other documents)  and  supporting  data  of  the  Molina  Plan  for  purposes  of  their  review  of  the  Income  Statement  and  (B) reasonably cooperate with all reasonable written requests of Seller and its Representatives in connection  with  such  review,  including  by  providing  all  readily  available  relevant  information  in  connection  with  Seller’s  review  of  the  Income  Statement  as  is  reasonably  requested  in  writing  by  Seller  or  its  Representatives.  The Income Statement delivered by Buyer to Seller shall be final, binding and conclusive  unless Seller delivers written notice to Buyer prior to 5:00 p.m., Eastern Time, on the last day of the Review  Period  that  it  objects  to any  item  or items shown  or reflected  in  the  Income  Statement (an “Objection  Notice”), which Objection Notice shall identify the specific items and calculations that Seller disagrees  with and specifies in reasonable detail Seller’s calculation of such amount and Seller’s grounds for such  disagreement. The Income Statement of Buyer shall be final, binding and conclusive as to all items and  calculations that Seller does not timely disagree with pursuant to this Section 1.7(c)(ii).                           (iii) If an Objection Notice shall be duly delivered, Buyer and Seller  shall, during the thirty (30) days following such delivery, use their good faith efforts to reach agreement on  the disputed items or amounts. If Buyer and Seller are unable to reach such agreement during such period,  they shall within thirty (30) days cause a neutral independent accounting firm of national renown mutually  agreed  upon  by  the  Parties  (the  “Independent  Accountant”)  promptly  to  review  the  disputed  items  or  amounts. The Independent Accountant shall make its determination based exclusively on presentations and  supporting material provided by Buyer and Seller promptly following the engagement of the Independent  Accountant  and  not  pursuant  to  any  independent  review.  Conclusions  shall  be  determined  by  the  Independent Accountant within thirty (30) days following delivery of the last brief timely submitted and  shall  be  final,  binding  and  conclusive  as  to  such  matters;  provided,  however,  that  the  Independent  Accountant shall select either the position of Buyer or Seller (as contained in the supporting brief) as a  resolution for each item or amount disputed and may not impose an alternative resolution with respect to  any item or amount disputed and must resolve the matter in accordance with the terms and provisions of  this Agreement. The fees, costs and expenses of the Independent Accountant shall be allocated between  Buyer, on the one hand, and Seller, on the other hand, based upon the percentage which the portion of the  aggregate dollar value of the items set forth in the Objection Notice not awarded to Buyer and Seller bears  to the amount actually contested by such Party. For example, if Seller claims that the aggregate appropriate  adjustments are $1,000 greater than the amount determined by Buyer and if the Independent Accountant  ultimately resolves such items by awarding to Seller $300 of the $1,000 contested, then the fees, costs and  expenses of the Independent Accountant shall be allocated 30% (i.e., 300 ÷ 1,000) to Buyer and 70% (i.e.,  700 ÷  1,000)  to  Seller.  Buyer  and  Seller  agree  that  they  will  cooperate  and  assist  the  Independent  Accountant in the preparation of the Income Statement, the calculation of Operating Income and in the  conduct of the audits and reviews referred to in this Section 1.7(c)(iii), including the making available to  the extent necessary of books, records, work papers and personnel.                           (iv)  Following  the  final  determination  of  Operating  Income,  in  the  event Operating Income is less than Seven Million Five Hundred Thousand Dollars ($7,500,000), Seller  shall promptly pay to Buyer an amount equal to such deficiency by wire transfer of immediately available  funds to an account(s) designated by Buyer.  If Operating Income is equal to or greater than Seven Million  Five  Hundred  Thousand  Dollars  ($7,500,000),  then  there  will  be  no  payment  due  under  this  Section  1.7(c)(iv).  Notwithstanding the foregoing, Seller shall not be required to make any payment under this  Section 1.7(c)(iv) prior to August 31, 2021.                                         -7-                                            

 

                           (v)   From the Closing Date to January 1, 2021, Buyer shall ensure that  the Molina Plan uses commercially reasonable efforts to operate the Business materially consistent with  Seller’s  operation  of  the  Business  in  the  Ordinary  Course  of  Business  prior  to  the  Closing  Date.   In  furtherance of the foregoing, Buyer shall ensure that the Molina Plan uses commercially reasonable efforts  to not materially increase the operating expenses set forth on the Example Income Statement.                     (d)   In the event the Required Medicaid Regulatory Approvals are not obtained  by January 1, 2021 and the Medicaid Novation does not occur, Seller shall pay to Buyer an amount equal  to Seven Million Five Hundred Thousand Dollars ($7,500,000) by wire transfer of immediately available  funds to an account(s) designated by Buyer; provided, however, such payment shall not become payable  until such time as the Membership Purchase Price is finally determined and in the event such Membership  Purchase Price is payable, such Seven Million Five Hundred Thousand Dollars ($7,500,000) payment shall  be offset (in whole or in part, as applicable, based on the amount of the Membership Purchase Price) against  the Membership Purchase Price.                     (e)   The net amount payable to Seller pursuant to Section 1.7(a), (b) and (d) is  referred to herein as the “Purchase Price”.               Section 1.8 Allocation.  As promptly as practicable after the final determination and  payment of the Purchase Price pursuant to Section 1.7, but not later than forty-five (45) days thereafter,  Buyer shall deliver to Seller a statement (the “Allocation”), allocating the Purchase Price (plus Assumed  Liabilities and amounts paid by Buyer pursuant to the Interim Services Agreement and net of amounts paid  to Buyer pursuant to Section 1.7(c) to the extent properly taken into account by Buyer under Section 1060  of the Code (such  amount,  the  “Tax  Purchase Price”)) among the  Acquired  Assets in accordance  with  Section 1060 of the Code.  If, within twenty (20) days after the delivery of the Allocation, Seller notifies  Buyer in writing that Seller objects to the allocation set forth in the Allocation, Buyer and Seller shall use  good faith efforts to resolve such dispute within twenty (20) days.  In the event that Buyer and Seller are  unable to resolve such dispute within twenty (20) days, Buyer and Seller shall each report the amount and  allocation of the Tax Purchase Price in accordance with its own separate determination.  Any adjustments  to the Tax Purchase Price shall be allocated consistent with this Section 1.8.  All Tax Returns, including  without limitation Form 8594 shall be prepared and filed consistently with this Section 1.8.                                    ARTICLE II                 REPRESENTATIONS AND WARRANTIES OF SELLER         Except as set forth in Seller Disclosure Schedules, Seller represents and warrants to Buyer as of the  date hereof and as of the Closing as follows:               Section 2.1 Organization  and  Standing.   Seller  is  a  corporation  duly  organized,  validly  existing  and  in  good  standing  under  the  laws  of  the  Commonwealth  of  Kentucky  and  is  duly  qualified to do business and in good standing in each other jurisdiction wherein the conduct of its business  or  the  ownership  or  operation  of  its  properties  and  assets  requires  such  qualification.   Seller  and  each  Affiliate of Seller, to the extent such Affiliate provides services in connection with the Medicaid Business,  owns its assets used in connection with the Medicaid Business, or is otherwise directly engaged in the  operation of the Medicaid Business, has all requisite power and authority, including any necessary permit,  license, consent, certificate, registration, or accreditation, to carry on its business as it has been and is now  being conducted, and to own and operate the Medicaid Business.               Section 2.2 Title.  At the applicable Transfer Date, Seller will assign or convey as  applicable to Buyer, good and marketable title to the Acquired Assets, free and clear of all Encumbrances,  other than Permitted Encumbrances.  All of the Acquired Assets are in normal repair and working order,                                        -8-                                            

 

   ordinary wear and tear excepted.  The Acquired Assets are suitable for the purpose for which they are  presently used.  The Acquired Assets (together with the Excluded Assets) constitute all assets of Seller (i)  used or held for use in the Business, and (ii) taking into account the services and assets to be provided under  the Management Agreement and the Interim Services Agreement, that are necessary to conduct the Business  immediately following the Closing Date in all material respects in the manner the Business is conducted on  the date hereof.               Section 2.3 No Undisclosed Liabilities.  Except as set forth on Schedule 2.3, Seller  has no Liabilities regarding the Medicaid Business, other than (a) those retained by Seller under Section  1.4 and (b) liabilities and obligations that would not reasonably be expected to be material to the Medicaid  Business.               Section 2.4 Litigation,  Etc.   Except  as  set  forth  on  Schedule 2.4,  (a)  there  is  no  Proceeding that is pending, or, to the Knowledge of Seller, has been threatened against Seller (other than  disputes with Providers in the Ordinary Course of Business) or any Affiliate of Seller with respect to the  Medicaid Business, (b) there is no Order (other than any Order of general applicability) outstanding against,  or,  to  the  Knowledge  of  Seller,  investigation  or  audit  by  any  Governmental  Authority  involving  the  Medicaid Business that individually or in the aggregate is or is reasonably expected to be material to the  Medicaid Business, and (c) there is not currently in effect, and for the twelve (12) months prior to the date  of this Agreement there has not been imposed, any sanction or civil monetary penalty with respect to the  Medicaid Business.  Seller has not made any material claims for indemnification under the UHC APA and  to Seller’s Knowledge, there exists no basis for any such claim, in each case, relating to the Business or the  Acquired Assets.               Section 2.5 Compliance with Laws.                     (a)   Seller and its Affiliates are, and since the inception of Seller have been, in  compliance in all material respects with all Legal Requirements, including all Health Care Laws, and Orders  applicable to Seller and the Medicaid Business. Seller meets in all material respects the requirements for  participation in, and the receipt of payment from, the health care payment programs in which it participates,  is  a  party  to  all  agreements  with  CHFS,  the  Commonwealth  of  Kentucky  and  any  other  necessary  Governmental Authority authorizing such participation, and is in compliance in all material respects with  the terms of such agreements.                     (b)   Except  as  set  forth  on  Schedule 2.5(b),  since  the  inception  of  Seller,  neither Seller nor any of its Affiliates has entered into any agreement or settlement (including any corrective  action plan,  corporate integrity agreement  or  corporate compliance agreement) with any  Governmental  Authority with respect to any actual or alleged violation of any applicable Legal Requirements in relation  to the operation of the Medicaid Business.                     (c)   Except as set forth on Schedule 2.5(c), since the inception of Seller, neither  Seller nor any of its Affiliates has been subject to any Governmental Authority’s imposition of material  sanctions on Seller or any of its Affiliates in relation to the operation of the Medicaid Business, or has  received any written correspondence from any Governmental Authority: (i) threatening the imposition of  material sanctions on Seller or any of its Affiliates in relation to the operation of the Medicaid Business;  (ii) alleging or asserting that Seller or any of its Affiliates has materially violated any Legal Requirement  in relation to the Medicaid Business; or (iii) requiring, requesting, or seeking to materially adjust, modify  or alter Seller or any of its Affiliates operations, activities, services or financial condition in relation to the  Medicaid Business.  No event has occurred as to Seller, and to Seller’s Knowledge no event has occurred  as to any of Seller’s Affiliates, that could reasonably be expected to result in any of the matters described  in the immediately preceding sentence.                                        -9-                                            

 

                     (d)   Since  the  inception  of  Seller,  all  material  filings  with  Governmental  Authorities with respect to the Medicaid Business, together with any material amendments with respect  thereto, in each case that were required to be filed with any Governmental Authority, have been made and  were  true  and  correct  in all  material  respects  when made (the  “Regulatory  Filings”).   Seller  has  made  available to the Buyer complete and correct copies of all audits by any healthcare regulatory Governmental  Authority  and  all  other  examinations  performed  with  respect  to  Seller  by  any  healthcare  regulatory  Governmental Authority (the “Audit Reports”), other than Audit Reports in the ordinary course requiring  no material plan of correction, along with responses and plans of correction with respect thereto. Other than  as set forth in the Audit Reports or on Schedule 2.5(d), (A) no material deficiencies have been asserted in  writing against Seller or, to Seller’s Knowledge, any of its Affiliates, with respect to the Regulatory Filings,  (B) the Regulatory Filings were in compliance in all material respects with applicable Legal Requirements  when filed, (C) no material fine or penalty has been imposed on Seller or, to Seller’s Knowledge, any of its  Affiliates, as a result of or to settle allegations of any noncompliance with material Legal Requirements,  and (D) no similar material audits or material examinations are currently pending or, to the Knowledge of  Seller, threatened in writing.                     (e)   Since the inception of Seller, none of Seller or, to Seller’s Knowledge, its  Affiliates in connection with the Medicaid Business or the Acquired Assets, (i) have been or is currently  excluded, debarred, suspended, or otherwise ineligible to participate in Federal health care programs (as  defined  at  42  USC  1320a-7b(f)),  (ii)  have  received  any  written  notice  threatening  any  such  exclusion,  debarment, suspension or ineligibility from participation in Federal health care programs, or (iii) have been  or are listed on the HHS-OIG Cumulative Sanctions Report or the General Services Administration List of  Parties Excluded from Federal Procurement and Non-Procurement Programs.  No event has occurred which  would reasonably be expected to result in Seller or its Affiliates becoming excluded, debarred, suspended,  or otherwise ineligible to participate in Federal health care programs (as defined at 42 USC 1320a-7b(f)).                     (f)   Since the inception of Seller, neither Seller, nor any Affiliate of Seller that   (i) provides services in connection with the Medicaid Business or the Acquired Assets, (ii) owns assets used  in connection with the Medicaid Business, or (iii) is otherwise directly engaged in the operation of the  Medicaid  Business  (but  as  to  each  such  Affiliate  of  Seller,  only  with  respect  to  matters  relating  to  or  affecting the Medicaid Business), nor to the Knowledge of Seller, any of the directors, officers, agents, or  employees of Seller or any such  Affiliate of Seller (with respect to matters relating to or affecting the  Medicaid Business), in their individual capacities, has directly or indirectly made or offered to make any  contribution, gift, bribe, rebate, payoff, influence payment, kickback to any Person, regardless of form: (A)  in  violation  of  the  federal  Anti-Kickback  Statute,  42  U.S.C.  §1320a-7b,  or  (B)  to  obtain  or  maintain  favorable treatment in securing business in material violation of any applicable Legal Requirement.                     (g)   Seller has provided Buyer with a true, correct and complete copy of the  CHFS Medicaid Contract.  The CHFS Medicaid Contract is legal, valid, binding, enforceable and in full  force and effect.  Except as set forth on Schedule 2.5(g), Seller has not received or given written notice of,  and to the Knowledge of Seller, is not aware of, any material  default  or claimed, purported or alleged  material default, breach or state of facts which, with notice or lapse of time or both, would constitute a  material default or breach on the part of any party in the performance or payment of any obligation to be  performed or paid by any party under the CHFS Medicaid Contract or would permit termination, material  modification,  suspension  or  imposition  of  sanctions  under  the  CHFS  Medicaid  Contract.   Seller  has  performed in all material respects all obligations imposed on it to date under the CHFS Medicaid Contract.   Seller is not in material breach or default under the CHFS Medicaid Contract, and, to the Knowledge of  Seller, no event has occurred which, with notice or lapse of time or both, would constitute a material breach  or  default  by  Seller  thereunder  or  permit  termination,  modification  or  acceleration  thereunder.   To  the  Knowledge of Seller, no other party has repudiated any provision of the CHFS Medicaid Contract.                                         -10-                                            

 

                     (h)   Seller  possesses  all  material  Governmental  Authorizations  required  to  carry on the Medicaid Business as presently conducted.  Schedule 2.5(h) contains a complete and accurate  list of each material healthcare Governmental Authorizations of Seller and the Governmental Authority  issuing  the same.   All material  applications,  notices or  other forms  required to  have been filed for the  renewal or extensions of such healthcare Governmental Authorizations have been duly filed on a timely  basis with the appropriate Governmental Authority, and neither Seller nor, with respect to Seller, any of its  Affiliates has been notified in writing that such renewals or extensions will be withheld or delayed in any  material respect.                     (i)   Schedule 2.5(i)  contains  a  list  of  all  written  notices  of  material  noncompliance,  requests for  material  remedial  action,  return  of material  overpayment  or  imposition  of  material fines (whether ultimately paid or otherwise resolved) by any healthcare regulatory Governmental  Authority as a result of Seller’s participation in a Program.  Seller has completed in all material respects,  or is currently in the process of completing in all material respects, all plans of correction or other filed  responses to any healthcare regulatory Governmental Authority, including plans of correction or responses  to all Audit Reports.               Section 2.6 No  Conflict  With  Other  Documents.   None  of  the  authorization,  execution  and  delivery  of  this  Agreement  or  any  of  the  instruments,  documents,  and  agreements  contemplated  herein  required  to  be  executed  and  delivered  by  Seller  or  its  Affiliates  pursuant  to  this  Agreement (the “Seller Related Instruments”) or the performance of the transactions contemplated by this  Agreement or the transactions contemplated by the Seller Related Instruments will, with or without notice  or the passage of time or both, (a) result in any breach or violation of, or be in conflict with Seller’s or the  applicable Affiliates’ Organizational Documents, (b) conflict with or violate any Medicaid Business plan  documents, including obligations to Medicaid Enrollees under the CHFS Medicaid Contract, (c) result in  any breach of or constitute a default (or an event that with notice or lapse of time or both would become a  default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or  require payment under, any Assumed Contract that is a Material Contract or result in the creation of an  Encumbrance on any of the Acquired Assets, or (d) conflict with or violate any Legal Requirement or Order  applicable to Seller or any applicable Affiliate, except, in the case of clauses (c) and (d), that would not,  individually or in the aggregate, reasonably be expected to be material to the Medicaid Business.               Section 2.7 Authority.   Seller  or  its  applicable  Affiliate  has  all  requisite  limited  liability company or corporate power and authority to execute and deliver this Agreement and the Seller  Related  Instruments,  to  perform  its  obligations  hereunder  and  thereunder  and  to  consummate  the  transactions  contemplated  by  this  Agreement  and  the  transactions  contemplated  by  the  Seller  Related  Instruments.   The  execution,  delivery  and  performance  of  this  Agreement  and  the  Seller  Related  Instruments and the consummation of the transactions contemplated by this Agreement and the transactions  contemplated by the Seller Related Instruments by Seller or its applicable Affiliate has been duly and validly  authorized and approved by all necessary action (corporate or otherwise) of Seller or its applicable Affiliate  and  no  other  limited  liability  company  or  corporate  proceedings  on  the  part  of  Seller  or  its  applicable  Affiliate are necessary to authorize this Agreement or any other Seller Related Instrument or to consummate  the transactions contemplated by this Agreement and the transactions contemplated by the Seller Related  Instruments.  Upon execution and delivery, this Agreement and any Seller Related Instruments are valid  and legally binding obligations of Seller and its applicable Affiliate enforceable in accordance with their  respective terms.  All corporate authorizations required for consummation of the transactions contemplated  by this Agreement and the transactions contemplated by the Seller Related Instruments have been received  and continue to be in full force and effect.               Section 2.8 Absence of Certain Changes.  Except as set forth on Schedule 2.8, since  the inception of Seller, Seller has operated the Medicaid Business in all material respects in the Ordinary                                        -11-                                            

 

   Course of Business and there has not been: (a) any material loss with respect to the CHFS Medicaid Contract  or any material change in any CHFS Medicaid Contract; or (b) a Seller Material Adverse Effect.               Section 2.9 Governmental  Authorizations.   The  execution,  delivery  and  performance by Seller and its Affiliates of this Agreement and each of the other Seller Related Instruments  and the consummation by Seller of the transactions contemplated by this Agreement and the transactions  contemplated by the Seller Related Instruments require no consents of, or filings with, any Governmental  Authority, other than the consents of, and filings with, the Governmental Authorities listed on Schedule 2.9.               Section 2.10 Privacy and Information Security.                     (a)   As to the Medicaid Business, Seller and, to the Knowledge of Seller, each  Affiliate of Seller with respect to the Business:                           (i)   are and since inception have been in material compliance with the  applicable privacy and security provisions of U.S. Health Insurance Portability and Accountability Act of  1996 (“HIPAA”) (42 U.S.C. Section 1320d et seq.), as amended by the Health Information Technology for  Economic and Clinical Health Act (42 U.S.C. Section 17921 et seq.), and other federal and state Legal  Requirements governing the security and privacy of individually identifiable information, (collectively, the  “Privacy Laws”);                            (ii)  have established and maintained privacy and security policies and  procedures as required by the Privacy Laws designed to promote compliance with all applicable Privacy  Laws;                           (iii) have  commercially  reasonable  administrative,  technical,  and  physical safeguards in place that are designed to protect Protected Health Information under its control or  in its possession from unauthorized access, use, modification, or disclosure by any person or entity;                           (iv)  have conducted periodic security risk assessments of its systems,  hardware,  software,  encryption,  policies  and  procedures  and  taken  commercially  reasonable  measures  designed to identify and mitigate risks that could compromise the privacy and security of Protected Health  Information and/or Personal Information under its control and/or in its possession;                           (v)   have trained all employees who have access to Protected Health  Information and Personal Information on privacy and security policies and procedures and maintain records  of completion for all employees in compliance with the Privacy Laws;                           (vi)  has entered into a written contract in all circumstances required by  the Privacy Laws, including HIPAA-compliant business associate agreements and are in compliance in all  material respects with the terms of such contracts;;                           (vii) except  as  set  forth  on  Schedule 2.10(a)(vii),  have  not,  since  inception, had a material Breach of Unsecured Protected Health Information (as such terms “Breach” and  “Unsecured” are defined at 45 C.F.R. § 164.402) or been subject to any material unauthorized access, use,  modification,  or  disclosure  of  any  Personal  Information,  or  any  other  reportable  security  incident,  or  material reportable event with respect to Protected Health Information or Personal Information under any  applicable Privacy Laws;                                         -12-                                            

 

                           (viii) have  not,  since  inception,   received  any  written  notices  of  any  inquiry, audit requests, or investigations by any Governmental Authority relating to or alleging a material  violation of any applicable Privacy Law by Seller; and                           (ix)  have  not  received  any  written  or,  to  Seller’s  Knowledge,  oral  complaints  or  notices  of  investigation,  from  any  Person  (including  any  patient,  client,  or  customer)  regarding  the  Medicaid  Business  or,  to  Seller’s  Knowledge,  any  of  Seller’s  agents’,  employees’,  or  contractors’ use or disclosure of, or security practices regarding, Medicaid Enrollees’ Protected  Health  Information or Personal Information, except such complaints or notices of investigation that would not be  material to the Medicaid Business.                     (b)   To the Knowledge of Seller, neither this Agreement nor the consummation  of the transactions contemplated by this Agreement hereby will violate any Privacy Laws or privacy policy  provided by Seller or any Affiliate of Seller to any Medicaid Enrollee.               Section 2.11 Taxes.  Seller has timely filed, or caused to be timely filed, taking into  account any extensions, all income and other material Tax Returns that were required to be filed by or with  respect to the Medicaid Business or Acquired Assets and all such Tax Returns are true, correct and complete  in all material respects. Seller has timely paid, or caused to be timely paid (or caused to be timely paid), or  made  provision  for,  all  income  and  other  material  Taxes  imposed  on  or  attributable  to  the  Medicaid  Business and the Acquired Assets (whether or not shown on a Tax Return as due and owing) to the proper  Governmental Authority.  There are (i) no asserted or proposed deficiencies or assessments of Taxes from  any Governmental Authority with respect to the Medicaid Business or the Acquired Assets, (ii) no ongoing  claims,  suits,  demands,  audits,  examinations,  investigations  or  similar  proceedings  by  or  before  any  Governmental Authority concerning any Tax liability with respect to the Medicaid Business or the Acquired  Assets, and no such action is threatened in writing, (iii) no written requests, agreements, or consents to  waive or extend the statutory period of limitations applicable to the assessment of Taxes that have been  granted by Seller; and (iv)  no Encumbrances for Taxes (other than Permitted Encumbrances) upon the  Acquired Assets.               Section 2.12 Employees and Employee Benefits                      (a)   Schedule 2.12(a)  sets  forth  the  following  information  (to  the  extent  applicable)  (i)  with  respect  to  Seller’s  employees  and  the  Evolent  Employees  (collectively,  “Seller  Employees”), as of the date set forth therein, including each Seller Employee on leave of absence, furlough,  or layoff status: name, employer, job title or position (including whether full or part-time), work location  (absent the COVID-19 pandemic), salary, hourly rate of pay, or other form of base compensation, annual  for 2020 and currently  accrued paid  time  off,  vacation,  or paid  sick leave, and projected target  bonus,  commission, or other incentive compensation, if any, for the fiscal year ended 2020, and (ii) with respect  to Seller’s independent contractors and independent contractors of Evolent or its Affiliates and primarily  performing services for the Business (collectively, “Seller Contractors”) as of the date set forth therein:  name of individual, party with whom he/she/it has affiliation or relationship, position or title, description  of services performed, and compensation arrangement, and (iii) with respect to each such Person, (A) the  date of hire or engagement, and (B) if an employee, (1) whether the employee is classified as exempt or  non-exempt under the Fair Labor Standards Act or any other applicable wage-and-hour Legal Requirement,  (2) whether or not such employee is absent for any reason such as layoff, furlough, leave of absence, or  workers’  compensation  and,  if  so,  the  date  such  absence  began  and  the  anticipated  date  of  return.  No  representative of Seller or Evolent has made any promises to any Seller Employee or Seller Contractor,  with regard to compensation, continued employment or engagement, or other material terms of employment  or engagement, other than those that have been reduced to writing and made available to Buyer.                                         -13-                                            

 

                     (b)   Schedule 2.12(b) sets forth an accurate, correct  and complete list of all  “employee benefit plans” (as such term is defined in Section 3(3) of ERISA, whether or not subject to  ERISA), each material employment or consulting agreement or offer letter, each bonus, incentive, deferred  compensation,  retention,  change  in  control,  pension,  retirement,  welfare,  life  insurance,  illness  benefit,  disability, vacation, paid time off, fringe benefit, post-employment welfare, profit-sharing, severance, stock  purchase,  stock  option  or  equity  incentive,  warrant  or  other  material  benefit  plan,  policy,  agreement,  arrangement or program, whether or not funded, that are maintained or contributed to by Seller for the  benefit of the Seller Employees or to which Seller has any liability with respect to any Seller Employees,  including any indirect or contingent Liability due to a relationship with an ERISA Affiliate (collectively,  “Seller Benefit Plans”).                     (c)   Except as disclosed on Schedule 2.12(c), no Seller Benefit Plan is (i) a  “multiemployer plan,” as such term is defined in Section 3(37) of ERISA, (ii) a plan that is subject to Title  IV of ERISA, Section 302 of ERISA or Section 412 of the Code, (iii) a multiple employer plan as defined  in Section 413(c) of the Code, or (iv) a “multiple employer welfare arrangement” within the meaning of  Section 3(40) of ERISA, and neither Seller, any of its Subsidiaries, nor any ERISA Affiliate of Seller or its  Subsidiaries has maintained, contributed to, or been required to contribute to any employee benefit plan of  the type or nature as described in clauses (i), (ii), (iii) or (iv) above within the last six (6) years.                     (d)   None of the Seller Benefit Plans that are “welfare benefit plans,” within  the meaning of Section 3(1) of ERISA, provide for continuing benefits or coverage after termination or  retirement from employment, except for COBRA rights under a “group health plan” as defined in Section  4980B(g) of the Code and Section 607 of ERISA or similar Legal Requirement, and for which the covered  individual pays the full cost of coverage.                     (e)   Except as disclosed on Schedule 2.12(e), all Seller Benefit Plans (and all  related  trust  agreements  or  annuity  contracts  or  any  funding  instruments)  have  been  maintained  and  administered in all material respects in accordance with the provisions of ERISA, where applicable, and  with the Code and all other applicable Legal Requirements. Neither Seller, any Subsidiary of Seller, nor  any ERISA Affiliate nor, to Seller’s Knowledge, any other Person, has engaged in any transaction with  respect to any Seller Benefit Plan that would be reasonably likely to subject Seller, any of its Subsidiaries  or Buyer to any Tax or penalty (civil or otherwise) imposed by ERISA, the Code or other applicable Legal  Requirements.                     (f)   Seller has made available to Buyer the following documents with respect  to each Seller Benefit Plan, as applicable:  (i) the governing plan document, including all amendments  thereto,  and  all  related  trust  documents  and  funding  instruments,  including  any  group  contracts  and  insurance policies; (ii) a written summary of the material terms of any Seller Benefit Plan that is not set  forth in a written document; (iii) the most recent summary plan description together with any summary or  summaries of material modifications thereto; (iv) the most recent determination or opinion letter; and (v) the  most recently filed annual report (Form 5500 series and all schedules and financial statements attached  thereto).                     (g)   Seller and Evolent (solely with respect to the Seller Employees and Seller  Contractors), as applicable, have been during the last four (4) years and currently are in material compliance  with all applicable Legal Requirements respecting labor relations, employment and employment practices,  terms and conditions of employment, and wages and hours, including but not limited to discrimination,  harassment, or retaliation in employment, terms and conditions of employment, termination of employment,  wages, overtime, tracking and paying correctly for all compensable time worked, meal periods and rest  breaks, vacation and paid sick leave, leaves of absence, occupational safety and health, employee whistle- blowing,  immigration,  employee  privacy,  workers’  compensation,  disability,  collective  bargaining,                                        -14-                                            

 

   secondment,  layoffs  (including  the  WARN  Act),  employment  practices,  classification  of  workers  as  employees or independent contractors, classification of employees as exempt or non-exempt under the Fair  Labor Standard Act and comparable state Legal Requirements, and employment record keeping and posting  requirements.                       (h)   Except as set forth on Schedule 2.12(h), (i) there is no unfair labor practice  complaint pending or, to the Knowledge of Seller, threatened against Seller or Evolent (solely with respect  to the Seller Employees and Seller Contractors) before any Governmental Entity, and, to the Knowledge of  Seller, there exists no basis for any such complaint, (ii) in the past four (4) years, no present or former  employee or independent contractor of Seller or Evolent who is a Person primarily performing services for  the Business and who resides or resided in Kentucky or normally works or provides services in Kentucky  (absent the COVID-19 pandemic) has filed or provided written notice to Seller or Evolent of, or, to the  Knowledge  of  Seller,  threatened  to  file,  any  claim  against  Seller  or  Evolent  on  account  of  or  for  (A)  overtime pay, (B) wages or salary, (C) vacation time or pay in lieu of vacation time off, (D) any violation  of  any  Legal  Requirement  relating to  wages  or  work  hours,  or (E) any  violation  of  the relevant  Legal  Requirements related to the terms and conditions of employees’ employment, and, in each case, to the  Knowledge of Seller, there exists no basis for any such claim, and (iii) no Person has filed or given written  notice to Seller or Evolent of, or, to the Knowledge of Seller, threatened to file, any claim against Seller or  Evolent under or arising out of any Legal Requirements relating to employer-employee relationships, labor  relations, employee entitlements, equal employment opportunities, retaliation, harassment, discrimination  in employment or employment practices, immigration, or plant closings, and, to the Knowledge of Seller,  there exists no basis for any such claim.                     (i)   As  of  the  date  hereof,  no  Seller  Employee  or  Seller  Contractor  has  provided written notice to Seller or Evolent that such Person intends to terminate his, her, or its employment  or engagement with Seller or Evolent, as applicable.                     (j)   Neither Seller nor Evolent (with respect to the Seller Employees or Seller  Contractors) is subject to any collective bargaining agreement, labor contract, or similar agreement with  any  labor  union,  trade  union,  works  council,  or  other  employee  representative,  and  neither  Seller  nor  Evolent (with respect to the Seller Employees or Seller Contractors) is involved in, or, to the Knowledge  of  Seller,  threatened  with,  any  organizing  efforts,  labor  dispute,  arbitration,  lawsuit,  or  administrative  proceeding relating to labor matters involving the employees of Seller or Evolent.  There is no, and during  the past four (4) years there has been no, labor dispute, strike, work slowdown, work stoppage, or lockout  pending or, to the Knowledge of Seller, threatened against or affecting Seller or Evolent (with respect to  the Seller Employees or Seller Contractors).                      (k)   Seller  and  Evolent  (with  respect  to  the  Seller  Employees  or  Seller  Contractors), as applicable, have withheld and paid to the appropriate Governmental Entity or are holding  for payment not yet due to such Governmental Entity all amounts required to be withheld from employees  of Seller or Evolent (with respect to the Seller Employees or Seller Contractors), as applicable, and are not  liable for any arrears of wages, Taxes, penalties, or other sums for failure to comply with any applicable  Legal Requirements relating to the employment of labor.  Seller and Evolent (with respect to the Seller  Employees or Seller Contractors), as applicable, have paid in full to each of their respective employees or  adequately accrued in accordance with GAAP, as applicable, for all earned wages, salaries, commissions,  bonuses, benefits, and other compensation due to or on behalf of such employees.                     (l)   To the Knowledge of Seller, no officer, director, employee, independent  contractor, or consultant of Seller or Evolent (with respect to the Seller Employees or Seller Contractors)  is bound by any Contract that purports to limit the ability of such officer, director, employee, independent  contractor, or consultant (i) to engage in or continue or perform any conduct, activity, duties, services, or                                        -15-                                            

 

   practice relating to the Business, or (ii) to assign to Seller or Evolent or to any other Person any rights to  any invention, improvement, or discovery related to the Business and developed during such Person’s scope  and course of employment or other relationship with Seller or Evolent (with respect to the Seller Employees  or Seller Contractors), as applicable.               Section 2.13 Material Contracts.                     (a)   Schedule 2.13(a)  lists,  as  of  the  date  hereof,  each  of  the  following  Contracts (each a “Material Contract” but excluding any Seller Benefit Plan) to which Seller is a party or  by which it is otherwise bound by, including the name of the counterparty to such Contract and the date  thereof (and, in the case of any oral or unwritten Contracts, provides a description of the material terms  thereof) and organized in a manner consistent with subsections set forth below:                           (i)   any Contract (other than any Contract with a Provider or Enrollee)  involving payments by or to the Business of at least two hundred fifty thousand dollars ($250,000) during  the twelve (12) month period prior to May 30, 2020;                           (ii)  any Contract with a Material Vendor;                           (iii) any Contract with a Top Provider;                           (iv)  any Contract involving the sale of any assets of Seller outside of  the Ordinary Course of Business, or the acquisition of any assets of any Person by Seller outside of the  Ordinary Course of Business, in any business combination transaction (whether by merger, sale of stock,  sale of assets or otherwise) under which obligations of any party thereto remain outstanding;                           (v)   any  note,  indenture,  loan  agreement,  credit  agreement,  security  agreement, financing agreement, or other evidence of Indebtedness, any guarantee made by Seller in favor  of any Person guaranteeing obligations of such Person, or any letter of credit issued for the account of  Seller;                           (vi)  any Contract relating to employment or consulting, including all  severance agreements, restrictive covenant agreements, employment agreements and consultant agreements  and  contracts  involving  leased  employees,  independent  contractors,  management  services,  or  support  services;                           (vii) any Contract with any Governmental Authority;                           (viii) any  collective  bargaining  agreement  or  contract  with  any  labor  union;                           (ix)  any lease for or with respect to real property;                           (x)   any IP License (excluding licenses for off-the-shelf commercial  Software and standard non-exclusive licenses granted by Seller to customers, partners and vendors in the  ordinary course of business, though these shall otherwise be deemed Material Contracts for purposes of this  Agreement);                           (xi)  each third party administrative Contract;                                         -16-                                            

 

                           (xii) any reinsurance, coinsurance or retrocessation Contract or other  Contract involving shared risk arrangements (excluding any Provider Contract);                            (xiii) any  Contract  (A)  for  the  administration  or  management  of  pharmacy benefits or (B) with a pharmacy or pharmacy company.         For the avoidance of doubt, no business associate agreement will be considered a Material Contract.                     (b)   Each Material Contract and each other Assumed Contract (as of the date  hereof) is valid and binding and in full force and effect.  Neither Seller nor, to the Knowledge of Seller, any  other party to any Material Contract or any other Assumed Contract (as of the date hereof), is or since  January 1, 2019 has been, in breach or default in any material respect under such Contract, and, since the  inception of Seller, Seller has not given to, or received from, any other party to any such Contract, any  notice or communication (whether written or oral) regarding any actual or alleged breach of or default under  any such Contract by Seller, or any other party to such Contract.  There are no renegotiations or outstanding  rights to negotiate, any amount to be paid or payable to or by Seller under any such Contract other than  with respect to non-material amounts or disputes with Providers in the Ordinary Course of Business, and  no Person has made a written demand for such negotiations.  True and complete copies of each of the  Material Contracts have been delivered to Buyer.  Except for certain other Provider Agreements that have  been delivered to Buyer, each Provider Contract has been entered into on either the “general provider form”  or “hospital services form” Contract provided by Seller to Buyer and there are no material deviations from  such forms.               Section 2.14 Intellectual Property.                     (a)   Schedule 2.14(a)  lists  all  pending,  issued and  unexpired  (i)  patents and  patent applications (published or unpublished), (ii) trademark registrations and applications, (iii) Internet  domain  names  and  (iv)  copyright  registrations  and  applications,  in  each  case,  that  constitute  Seller  Intellectual Property (the “IP Registrations”).  Seller is the sole and exclusive owner of the IP Registrations,  free and clear of any Encumbrance.  All IP Registrations are valid, enforceable and subsisting.                       (b)   Seller exclusively owns (beneficially, and of record where applicable) all  right, title and interest in and to or has the valid and enforceable right to use, in each case free and clear of  all Encumbrances, all Seller Intellectual Property.  The Seller Intellectual Property is not subject to any  outstanding Order, contract or Proceeding adversely affecting Buyer’s use thereof or rights thereto and is  valid, enforceable and subsisting.  Except as provided in Schedule 2.14(b), Seller has not granted to any  Person or authorized any Person to retain any material rights in any Seller Intellectual Property.                     (c)   Seller and the conduct of the Business do not infringe, misappropriate or  otherwise violate, and have not infringed, misappropriated or otherwise violated, any Intellectual Property  owned by any other Person.  To the Knowledge of Seller, the Seller Intellectual Property owned by Seller  has not been infringed upon, misappropriated, diluted or otherwise violated by any other Person.  Since the  inception of Seller, there has been no litigation, objection, claim or other Proceeding pending, asserted or  threatened  in  writing  against  Seller  concerning  the  ownership,  validity,  registrability,  enforceability,  infringement, misappropriation, violation or use of, or licensed right to use the Seller Intellectual Property.                     (d)   Seller does not own any proprietary Software.                     (e)   Each present or past employee, officer, consultant or any other Person who  developed any part of any material Seller Intellectual Property for or on behalf of Seller is a party to a valid  and enforceable written Contract that conveys or obligates such Person to convey to Seller any and all right,                                         -17-                                            

 

   title, and interest in and to all such Seller Intellectual Property, or otherwise has by operation of law vested  in Seller any and all right, title and interest in and to all such Seller Intellectual Property.                     (f)   Seller has taken reasonable actions to maintain the confidentiality, secrecy  and value of the Confidential Information and Trade Secrets of Seller included in the Seller Intellectual  Property, if any, and neither have been used by or disclosed to any third party, to the Knowledge of Seller,  except pursuant to an agreement with commercially reasonable protections of the Confidential Information  and Trade Secrets made available to such Person.  To the Knowledge of Seller, there has not been any  breach  by  any  third  party  of  any  confidentiality  obligation  to  Seller  with  respect  to  the  Confidential  Information and Trade Secrets included in the Seller Intellectual Property.                     (g)   Except  as  set  forth  in  Schedule 2.14(g),  the  consummation  of  the  transactions contemplated by this Agreement will not result in the loss of any ownership or use rights of  Seller (or Buyer after the Closing Date) in any Seller Intellectual Property.                Section 2.15 Real Property.                     (a)   Schedule 2.15(a) sets forth a list of all real property leases to which Seller  is a party as (sub)lessee (the “Seller Lessee Real Property Leases”), along with the street address of each  real property location subject to each of the Seller Lessee Real Property Leases (such real property, the  “Seller Lessee Real Property”).                     (b)   Schedule 2.15(b) sets forth a list of all real property leases to which Seller  is a party as a (sub)lessor (the “Seller Lessor Real Property Leases” and together with the Seller Lessee  Real Property Leases, the “Seller Real Property Leases”), along with the street address of each real property  location subject to each of the Seller Real Property Leases (such real property, the “Seller Lessor Real  Property” and together with the Seller Lessee Real Property, the “Real Property”).                       (c)   Except for the Seller Real Property Leases identified in Schedules 2.15(a)  and 2.15(b) and its rights to acquire the UHC Improvements and UHC Owned Real Property pursuant to  the UHC APA (which rights the parties hereby confirm for the avoidance of doubt are not included in the  Real Property conveyed pursuant to this Agreement), Seller does not own any interest (fee, leasehold or  otherwise) in any real property.  Except as set  forth in Schedule 2.15(c), Seller (i) enjoys peaceful and  undisturbed possession of the Real Property, (ii) has a valid leasehold interest in the Real Property and  (iii) has not guaranteed any real property leases.                     (d)   There are no pending or, to the Knowledge of Seller, threatened, eminent  domain, condemnation, zoning, or other Proceedings affecting the Real Property that would result in the  taking of all or any part of such Real Property or that would prevent or hinder the continued use of such  Real Property as currently used in the conduct of the Business.                     (e)   Copies of all deeds or leases, as the case may be, existing title insurance  policies, surveys, appraisals, specifications and plans of or pertaining to the UHC Owned Real Property  and each parcel of Real Property, to the extent the same are in Seller’s possession, have been delivered to  Buyer.               Section 2.16 Material Vendors and Top Providers.                     (a)   Schedule 2.16(a) sets forth a true and complete list of each of the top ten  (10) vendors of the Business, by volume based on payments made by the Business to such vendor, for the                                         -18-                                            

 

   twelve (12) month period prior to May 30, 2020 (collectively, the “Material Vendors”), together with the  amount spent by the Business with respect to each such vendor for each such period.                     (b)   Schedule 2.16(b) sets forth a true and complete list of each Provider with  respect  to  which  the  Business  attributed  total  spend  in  excess  of  ten  million  dollars  ($10,000,000)  for  calendar year 2019 (collectively, the “Top Providers”), together with the amount spent by the Business with  respect to each such Provider for such period.                     (c)   Except  as  set  forth  in  Schedule 2.16(c),  no  Material  Vendor  or  Top  Provider (i)  has provided  Seller  any  notice  or communication  terminating, suspending,  or reducing, or  specifying an intention to terminate, suspend or reduce in the future, or otherwise reflecting a material  change in, the business relationship between such Material Vendor or Top Provider, as applicable, and  Seller, or (ii) has cancelled or otherwise terminated any Contract.               Section 2.17 Financial  Statements.   Seller  has  delivered  to  Buyer  true  and  correct  copies  of  the  audited  statements  of  admitted  assets,  liabilities,  and  capital  and  surplus,  revenue  and  expenses, changes in capital and surplus, and cash flows of Seller for the year ended December 31, 2019  and  interim,  unaudited  statements  of  admitted  assets,  liabilities,  and  capital  and  surplus,  revenue  and  expenses, changes in capital and surplus, and cash flows for the quarter ended March 31, 2020 (the “Balance  Sheet  Date”  and  collectively,  the  foregoing  financial  statements  are  referred  to  herein  as  the  “Seller  Financial Statements”). The Seller Financial Statements were prepared from and are in accordance with the  books and records of Seller and present fairly and accurately in all material respects the financial position  of Seller, and the results of its operations at the dates and for the periods indicated and have been prepared  in conformity with SAP, applied consistently for the periods specified.  Seller has not made any material  changes to its accounting methods or practices since the Balance Sheet Date.               Section 2.18 Books  and  Records.  The  books  and  records  that  constitute  Acquired  Assets  have  been  prepared  and  maintained  in  good  faith  and  consistently  with  Seller’s  practice  for  maintaining books and records in its Medicaid Business.               Section 2.19 Insurance.  Schedule 2.19 sets forth the insurance policies Seller currently  maintains with respect to risks associated with its business. Such policies are in full force and effect, and  Seller  has  paid  or  accrued  (to  the  extent  not  due  and  payable)  all  premiums  due,  and  has  otherwise  performed in all material respects all of its obligations under, each such policy of insurance.               Section 2.20 No Finder’s Fee. There is no investment banker, broker, finder or other  intermediary that has been retained by or is authorized to act on behalf of Seller or any of its Affiliates who  might  be  entitled  to  any  fee  or  commission  in  connection  with  the  transactions  contemplated  by  this  Agreement.               Section 2.21 No Other Representations.  Seller acknowledges and agrees that, except  for  the  representations  and  warranties  made  by  Buyer  in  ARTICLE  III,  and  the  other  Transaction  Documents, neither Buyer nor any other Person is making or has made any representation or warranty,  expressed or implied, at law or in equity, with respect to or on behalf of Buyer or any of its Affiliates or in  connection with the transactions contemplated by this Agreement.  Seller specifically disclaims that it is  relying upon or has relied upon any such other representations or warranties that may have been made by  any Person, and acknowledges and agrees that Buyer and its Affiliates have specifically disclaimed and do  hereby specifically disclaim any such other representations and warranties.                                         -19-                                            

 

                                    ARTICLE III                  REPRESENTATIONS AND WARRANTIES OF BUYER         Buyer hereby represents and warrants to Seller as of the date hereof and as of the Closing as follows:               Section 3.1 Organization  and  Standing.   Buyer  is  a  corporation  duly  organized,  validly existing and in good standing under the laws of the state of Delaware and is duly qualified to do  business  and  in  good  standing  in  each  other  jurisdictions  wherein  the  conduct  of  its  business  or  the  ownership or operation of its properties and assets requires such qualification.  Buyer has all requisite power  and authority to carry on its business as it has been and is now being conducted.               Section 3.2 Ability to Operate Medicaid Business.  Buyer or its applicable Affiliates  are legally and contractually permitted to operate the Business, and hold all required licenses and approvals,  and meet all applicable regulatory requirements (subject to the Required Regulatory Approvals, if and as  applicable) necessary to legally operate the Business, including the D-SNP Business (but subject to the  Molina Plan’s certification by CMS as a Medicare Advantage Organization).               Section 3.3 Compliance with Laws.                     (a)   Neither Buyer nor any of its Affiliates is in material violation of any Legal  Requirement that would reasonably be expected to impair or delay Buyer’s or its applicable Affiliates’  ability to consummate the transactions contemplated by this Agreement.                     (b)   Since January 1, 2019, none of Buyer or its Affiliates (i) has been or is  currently excluded, debarred, suspended, or otherwise ineligible to participate in state or federal programs,  including  Medicare  and  Medicaid, (ii)  has  received  any  written  notice  threatening  any  such  exclusion,  debarment, suspension or ineligibility, or (iii) has been or are listed on the HHS-OIG Cumulative Sanctions  Report or the General Services Administration List of Parties Excluded from Federal Procurement and Non- Procurement Programs.               Section 3.4 No  Conflict  With  Other  Documents.   None  of  the  authorization,  execution  and  delivery  of  this  Agreement  or  any  of  the  instruments,  documents,  and  agreements  contemplated  herein  required  to  be  executed  and  delivered  by  Buyer  or  its  Affiliates  pursuant  to  this  Agreement (the “Buyer Related Instruments”) or the performance of the transactions contemplated by this  Agreement or by the transactions contemplated by the Buyer Related Instruments will, with or without  notice or the passage of time or both, (a) result in any breach or violation of, or be in conflict with Buyer’s  or the applicable Affiliates’ Organizational Documents, or (b) conflict with or violate any license, permit,  Legal Requirement or Order applicable to Buyer or its Affiliates, except, in the case of clause (b), as would  not reasonably be expected to materially impair or delay Buyer’s ability to consummate the transactions  contemplated by this Agreement or would reasonably be expected to result in any Liability to Seller.               Section 3.5 Authority.  Buyer or its applicable Affiliate has all requisite corporate  power and authority to execute and deliver this Agreement and the Buyer Related Instruments, to perform  its  obligations  hereunder  and  thereunder  and  to  consummate  the  transactions  contemplated  by  this  Agreement and the transactions contemplated by the Buyer Related Instruments.  The execution, delivery  and  performance  of  this  Agreement  and  the  Buyer  Related  Instruments  and  the  consummation  of  the  transactions  contemplated  by  this  Agreement  and  the  transactions  contemplated  by  the  Buyer  Related  Instruments by Buyer or its applicable Affiliate have been duly and validly authorized and approved by all  necessary  action  (corporate  or  otherwise)  of  Buyer  or  the  applicable  Affiliate  and  no  other  corporate  proceedings on the part of Buyer or such Affiliate are necessary to authorize this Agreement or any other  Buyer  Related  Instrument  or  to  consummate  the  transactions  contemplated  by  this  Agreement  and  the                                         -20-                                            

 

   transactions contemplated by the Buyer Related Instruments.  Upon execution and delivery, this Agreement  and any Buyer Related Instruments are valid and legally binding obligations of Buyer and its applicable  Affiliates enforceable in accordance with their respective terms.  All corporate authorizations required for  consummation of the transactions contemplated by this Agreement and the transactions contemplated by  the Buyer Related Instruments have been received and continue to be in full force and effect.               Section 3.6 Litigation,  Etc.   There  is  no  Proceeding  that  is  pending,  or,  to  the  Knowledge of Buyer, has been threatened against Buyer or any Affiliate of Buyer that relates to or affects  the  transactions  contemplated  by  this  Agreement;  and  there  is  no  Order  (other  than  Orders  of  general  applicability)  outstanding  against,  or,  to  the  Knowledge  of  Buyer,  investigation  or  audit  by  any  Governmental Authority involving Buyer or any Affiliate of Buyer that would reasonably be expected to  materially impair or delay Buyer’s ability to consummate the transactions contemplated by this Agreement.               Section 3.7 Financing.  Buyer has, and will have, sufficient cash, available lines of  credit  or  other  sources  of  immediately  available  funds  to  enable  it  to  consummate  the  transactions  contemplated by this Agreement, including paying in full all amounts required to be paid hereunder by  Buyer and with respect to any regulatory capital requirements arising out of the transactions contemplated  by this Agreement.  Buyer expressly acknowledges and agrees that its obligations hereunder, including its  obligations  to  consummate  the  transactions  contemplated  by  this  Agreement,  are  not  subject  to,  or  conditioned on, receipt of financing.               Section 3.8 Governmental  Authorizations.   The  execution,  delivery  and  performance  by  Buyer  of  this  Agreement  and  each  of  the  other  Buyer  Related  Instruments  and  the  consummation  by  Buyer  of  the  transactions  contemplated  by  this  Agreement  and  the  transactions  contemplated by the Buyer Related Instruments require no consents of, or filings with, any Governmental  Authority, other than the consents of, and filings with, the Governmental Authorities listed on Schedule 3.8.               Section 3.9 No Finder’s Fee.  There is no investment banker, broker, finder or other  intermediary that has been retained by or is authorized to act on behalf of Buyer or any of its Affiliates who  might  be  entitled  to  any  fee  or  commission  in  connection  with  the  transactions  contemplated  by  this  Agreement.               Section 3.10 No Other Representations.  Buyer acknowledges and agrees that, except  for the representations and warranties made by Seller in ARTICLE II and the other Transaction Documents,  neither Seller nor any other Person is making or has made any representation or warranty, expressed or  implied, at law or in equity, with respect to or on behalf of Seller or any of its Affiliates or in connection  with the transactions contemplated by this Agreement.  Buyer specifically disclaims that it is relying upon  or has relied upon any such other representations or warranties that may have been made by any Person,  and  acknowledges  and  agrees  that  Seller  and  its  Affiliates  have  specifically  disclaimed  and  do  hereby  specifically disclaim any such other representations and warranties.                                    ARTICLE IV                              CERTAIN COVENANTS               Section 4.1 Certain  Efforts  to  Close  Transactions.   Subject  to  the  terms  of  this  Agreement, each Party will use its commercially reasonable efforts to fulfill, and to cause to be satisfied,  the conditions in ARTICLE VI (but with no obligation to waive any such condition) and to consummate  and effect the transactions contemplated herein, including to cooperate with and assist each other in all  reasonable respects in connection with the foregoing.  In furtherance of the foregoing, Seller will use its  commercially reasonable efforts to fulfill, and to cause to be satisfied, the conditions set forth in the UHC  APA  as  it  relates  to  the  UHC  D-SNP  Closing  Conditions  and  the  UHC  D-SNP  Closing  (but  with  no                                        -21-                                            

 

   obligation to waive any such condition) and to consummate and effect the transactions contemplated therein  relating thereto.                 Section 4.2 Novations.                     (a)   Between the date hereof and January 1, 2021 with respect to the Medicaid  Novation and December 31, 2021 with respect to the D-SNP Novation (as applicable, the “Pre-Closing  Novation Period”), each Party shall use its commercially reasonable efforts to take, or cause to be taken,  all actions, and to do, or cause to be done, all things, in each case necessary, proper or advisable under  applicable  Legal  Requirements  to  consummate  and  obtain  the  Novations  and  to  obtain  the  Required  Regulatory Approvals, including (i) preparing and filing as promptly as practicable with any Governmental  Authority all documentation to effect all necessary, proper or advisable filings, applications and notices,  (ii) obtaining as promptly as practicable and maintaining all consents required to be obtained from any  Governmental Authority that are necessary, proper or advisable to consummate the Novations and to obtain  the  Required  Regulatory  Approvals,  (iii)  to  the  extent  permitted  by  applicable  Legal  Requirements,  furnishing as promptly as practicable to one another or any Governmental Authority any information or  documentary materials reasonably requested or required in connection with obtaining and maintaining such  Required  Regulatory  Approvals,  and  (iv)  communicating  and  cooperating  with  the  other  Parties  in  connection  with  such  matters.   Each  of  Seller  and  Buyer  shall  provide  the  other  Party  a  reasonable  opportunity to review in advance drafts of any filing, application or written notice related to the transactions  contemplated by this Agreement prior to their submission to any Governmental Authority (and may limit  review to outside counsel of Seller or Buyer, as applicable, to protect competitively sensitive information)  and shall consider in good faith such Party’s reasonable comments on such draft filings.  Promptly after the  date hereof, each of the Parties shall provide any required notices to, and make any other required filings  or applications with, all Governmental Authorities required to consummate the Novations and the other  transactions  contemplated  hereby  and  to  obtain  the  Required  Regulatory  Approvals,  including  any  notifications and filings required to be filed with the DOI, CHFS, the Commonwealth of Kentucky and  CMS; provided, however, any filings or applications with respect to the D-SNP Novation will occur at the  appropriate time as mutually agreed to by the Parties.                     (b)   Without limiting Section 4.2(a), as promptly as practicable after the date  hereof (and in any event within three (3) Business Days following the date hereof), and, in each case, to the  extent permitted by applicable Legal Requirements and in accordance with the terms of the CHFS Medicaid  Contract and D-SNP Contract in order to consummate the Novations and in order to obtain the Required  Regulatory Approvals, (i) Seller shall submit advance notice to CHFS of its request to assign and/or transfer  the CHFS Medicaid Contract and (ii) Buyer or its applicable Affiliate shall promptly file a Form A and, if  required, a Form E with the DOI in connection with the transactions contemplated hereby.  In addition,  during the Pre-Closing Novation Period, (A) Seller shall cooperate with Buyer or its applicable Affiliate in  its  development  and  submission  to  CHFS  (and  any  other  applicable  Governmental  Authority)  and  implement a transition plan, to include a timeline and appropriate notices to Enrollees and all Providers;  and (B) subject to applicable Legal Requirements and after consultation with CHFS and the DOI, Seller  shall provide notice, in a form reasonably acceptable to Buyer or its applicable Affiliate, to Enrollees of the  transactions contemplated by this Agreement. Subject to applicable Legal Requirements and during the Pre- Closing Novation Period, each Party shall furnish to the other party such information and assistance as any  other Party may reasonably request in connection with its preparation of the filing or submission of such  request, and keep the other party reasonably apprised of any communications with, and inquiries or requests  for additional information from any other Governmental Authority.  Additionally, during the Pre-Closing  Novation Period, each Party shall, to the extent practicable, provide any other Party at least two (2) Business  Days’ advance written notice of the time and subject matter of any meetings or material communications  with CHFS, the DOI or CMS relating to the transactions contemplated by this Agreement, and the other  Parties shall, to the extent practicable and permitted by CHFS, the DOI or CMS, have the right to attend                                        -22-                                            

 

   and participate in any such meetings or material conversations. None of Seller or Buyer or their respective  Representatives shall agree to participate in any material or substantive meeting or conference (including  by  telephone)  with  any  Governmental  Authority,  or  any  member  of  the  staff  of  any  Governmental  Authority, in respect of any filing, proceeding, investigation (including the settlement of any investigation),  litigation or other inquiry regarding the transactions contemplated by this Agreement unless, to the extent  permitted by such Governmental Authority, it consults with the other Party in advance and allows the other  party to participate.                     (c)   Between the date hereof and the earlier of (i) Closing and (ii) September  1, 2020, without Seller’s prior written consent, which shall not be unreasonably withheld, conditioned or  delayed, Buyer shall not, and shall cause its Affiliates not to, directly or indirectly (whether by merger,  consolidation  or  otherwise),  acquire,  purchase,  lease or  license (or  agree  to  acquire,  purchase, lease  or  license) any  business,  corporation,  partnership,  limited  liability  company,  association  or  other  business  organization or division or part thereof, or any securities or collection of assets, or enter into any new line  of business, if doing so would reasonably be expected to: (i) impose any material delay in the obtaining of,  or materially increase the risk of not obtaining, any consent of any Governmental Authority necessary to  consummate the Novations or the expiration or termination of any applicable waiting period; (ii) materially  increase  the  risk  of  any  Governmental  Authority  entering  an  order  prohibiting  the  Novations;  or  (iii) materially increase the risk of not being able to remove any such order on appeal or otherwise.  For the  avoidance of doubt, Buyer or its Affiliates’ entry into a Medicaid contract or Dual Eligible Special Needs  Contract in connection with the RFP and any actions taken in connection therewith shall not be a violation  of this Section 4.2(c).                       (d)   Notwithstanding  anything  to  the  contrary  contained  herein,  each  Party  acknowledges and agrees that nothing herein shall obligate, or be construed to obligate, any Party or any of  their respective Affiliates to, or to agree to, (i) sell, divest, hold separate, discontinue, limit or otherwise  dispose of any property or assets of such Person or any of its Affiliates, other than Seller’s obligation to sell  the  Medicaid  Business  pursuant  to  the  terms  of  this  Agreement,  (ii)  defend  against  any  Proceeding  challenging this Agreement or the transactions contemplated by this Agreement (provided, however, each  Party agrees to defend against any Proceeding challenging this Agreement or the transactions contemplated  by this Agreement to the extent it is reasonably expected that the resolution of such Proceeding (without  giving effect to any appeal with respect thereto) will occur prior to January 1, 2021), or (iii) agree to any  conditions (including in any consent decree) relating to, or changes or restrictions in, the current or future  operations or ownership of such Person or any of its Affiliates other than (A) ordinary course regulatory  requirements in connection with the Novations and (B) any Open Enrollment Period or special opt-out  period (each of the foregoing, a “Burdensome Condition”).                     (e)   Notwithstanding  anything  to  the  contrary  in  this  Agreement,  nothing  contained  in  this  Agreement  shall  give  Buyer,  directly  or  indirectly,  the  right  to  control  or  direct  the  operations  of  the  Business  prior  to  the  Closing.   Prior  to  the  Closing,  Seller  and  UHC  shall  exercise,  consistent with the terms and conditions of this Agreement, complete control and supervision over the  operations of the Business consistent with Legal Requirements.               Section 4.3 Further Assurances. If after the Closing any further action is necessary,  proper or desirable to carry out any purpose of this Agreement, then each Party will take such further action  (including the execution and delivery of further documents) as any other Party reasonably requests to carry  out such purpose.                                           -23-                                            

 

                 Section 4.4 Confidentiality.                      (a)   Buyer and its Affiliates, on the one hand, and Seller and Evolent and their   respective Affiliates, on the other, shall not, without the prior written consent of the other Party, disclose   any  Confidential  Information  of  such  other  Party  in  any  manner  whatsoever,  in  whole  or  in  part.  The   receiving party shall not, without the prior written consent of the disclosing party, use any Confidential   Information for any purpose other than evaluating the transactions contemplated hereby or fulfilling its   obligations hereunder or otherwise pursuant to any pre-existing contractual arrangement. Each receiving   party  agrees  to  transmit  the  Confidential  Information  only  to  Representatives  who  need  to  know  the   Confidential  Information in order to fulfill such party’s obligations in connection with the transactions   contemplated hereby.  In any event, each party will be responsible for any breach of this Section 4.4(a) by   any of its Representatives.                      (b)   In the event that the receiving party or its Representatives are required to   disclose any Confidential Information by law, regulation or the rules of any applicable securities exchange,   or in a Proceeding, by an applicable securities exchange or on advice of counsel, the receiving party agrees   to give the disclosing party prompt notice of such requirement and will cooperate with the disclosing party   if the  disclosing  party  desires to  seek  a protective  order.  If,  absent  the  entry  of  a  protective  order,  the   receiving party or its Representatives are, in the opinion of counsel to such party, legally compelled to   disclose such Confidential Information, the receiving party may disclose such information to the persons   and to the extent required without liability under this Agreement and such party agrees to cooperate with   the disclosing party’s reasonable commercial requests, at the disclosing party’s expense, in its efforts to   obtain reliable assurances that confidential treatment will be accorded to such Confidential Information.                      (c)   Notwithstanding anything contained herein to the contrary, effective as of   the Closing, all Confidential Information of Seller included in the Acquired Assets will be deemed to be   “Confidential Information” of Buyer and will be subject to the protections set forth herein for the benefit   of Buyer.                Section 4.5 Exclusivity.  From the execution of this Agreement until the Closing,  Seller  agrees  that  it  will  not,  and  will  cause  each  of  its  Affiliates,  directors,  officers,  managers,  employees,  agents,  consultants,  lenders,  financing  sources,  advisors  or  other  Representatives,  including legal counsel, accountants and financial advisors, not to, directly or indirectly (a) solicit,  initiate or encourage any inquiry, proposal, offer or contact from any Person (other than Buyer and its  Affiliates and representatives) relating to any transaction involving (i) the sale of any equity or any  assets  (other  than  in  the  Ordinary  Course  of  Business)  of  Seller,  (ii)  any  acquisition,  divestiture,  merger, equity exchange, consolidation, redemption, financing or similar transaction involving Seller  or (iii) any similar sale or acquisition transaction or business combination involving Seller (in each  case,  an  “Acquisition  Proposal”),  or  (b)  participate  in  any  discussion  or  negotiation  regarding,  or  furnish any information with respect to, or assist or facilitate in any manner, any Acquisition Proposal  or  any  attempt  to  make  an  Acquisition  Proposal.  Seller  shall  immediately  cease,  and  cause  to  be  terminated, any and all contacts, discussions and negotiations with third parties regarding any of the  foregoing, and Seller will notify Buyer immediately if any Person makes any proposal, offer, inquiry  or contact related to an Acquisition Proposal.                Section 4.6 Conduct of Business Prior to Complete Transfer.                      (a)  From and after the date hereof until the earlier of (i) the final Transfer  Date and (ii) January 1, 2021, except (A) as set forth in Schedule 4.6(a), (B) as consented to in writing  by Buyer (such consent to not be unreasonably withheld, conditioned or delayed), or (C) as required  by  applicable  Legal  Requirements,  Seller  shall,  other  than  as  contemplated  by  this  Agreement,                                         -24-                                              

 

    continue to operate in the Ordinary Course of Business, consistent with past practice, and shall use  commercially reasonable efforts to:                            (i)  preserve intact Seller’s present business organization;                            (ii) preserve  Seller’s  relationships  with  Providers,  Enrollees,         payors,  licensors,  suppliers,  developers,  contractors  and  others  to  whom  it  has  material         contractual obligations or material business dealings or relations;                              (iii) keep  available  the  services  of  the  employees  of  Seller  or         Persons  (including  independent  contractors  and  leased  employees)  otherwise  servicing  the         Business; and                            (iv) comply  in  all  material  respects  with  all  applicable  Legal         Requirements.                        (b)   From and  after the  date  hereof  until  the  earlier  of the  D-SNP  Contract   Transfer  Date  and  the  termination  of  the  D-SNP  Contract  in  accordance  with  its  terms,  except  (A)  as   consented to in writing by Buyer (such consent not to be unreasonably withheld, conditioned or delayed),   or  (B) as  required  by  applicable  Legal  Requirements,  Seller  shall,  other  than  as  contemplated  by  this   Agreement including Section 4.15, use commercially reasonable efforts to continue to operate the D-SNP   Business in the Ordinary Course of Business, consistent with past practice.                       (c)  From  and  after  the date  hereof  until  (i) with  respect  to  the  D-SNP  Contract, the earlier of January 1, 2022, the D-SNP Contract Transfer Date and the termination of the  D-SNP  Contract  in  accordance  with  its  terms,  or  (ii) with  respect  to  any  other  Contract  that  is  an  Assumed Contract but which such Contract was not assumed by Buyer at Closing, the earlier of (A) the  final Transfer Date with respect to such Assumed Contract and (B) January 1, 2021, unless otherwise  consented to by Buyer, which such consent shall not be unreasonably withheld, conditioned or delayed,  Seller:                            (i)  shall  not,  other  than  in  the  Ordinary  Course  of  Business,         terminate or amend any such Contracts (other than any Contract that terminates in accordance         with its terms and not as a result of a breach thereof);                             (ii) shall not, other than in the Ordinary Course of Business, waive,         release or assign any material rights, claims or benefits under such Contracts;                            (iii) shall not, other than in the Ordinary Course of Business, send         notices  or  communications  regarding  performance  by  the  counterparty  under  any  such         Contracts; and                             (iv) shall  not,  other  than  in  the  Ordinary  Course  of  Business,         dispute or settle any action, suit, case, litigation, claim, hearing, arbitration, investigation or         other proceedings before or threatened to be brought before a Governmental Authority relating         to any such Contracts.          From and after the Closing until (i) with respect to the D-SNP Contract, the earlier of January  1, 2022, the D-SNP Contract Transfer Date and the termination of the D-SNP Contract in accordance  with its terms, or (ii) with respect to any other Contract that is an Assumed Contract but which such  Contract was not assumed by Buyer at Closing, the earlier of (A) the final Transfer Date with respect to                                          -25-                                              

 

    such Assumed Contract and (B) January 1, 2021, unless otherwise consented to by Buyer, which such   consent shall not be unreasonably withheld, conditioned or delayed,  Seller shall comply in all material   respects with such Contracts to which it is a party and shall not take (or fail to take) any action that would   reasonably  be  expected  to  cause  or  result  in  a  material  breach  of,  or  material  default  under,  any  such   Contract.    For the avoidance of doubt, any Liabilities arising under the Assumed Contracts before the Transfer Date   applicable thereto shall in all cases be obligations of Seller.                      (d)  From and after the date hereof until January 1, 2021, neither Seller nor  Evolent shall make any changes to the compensation of any Seller Employee, hire any additional Seller  Employees or terminate any Seller Employee, in each case other than in the Ordinary Course of Business,  without the prior written consent of Buyer.                      (e)   From and after the date hereof until the expiration of the Open Enrollment   Period, Buyer shall cause the Molina Plan to comply in all material respects with all applicable Legal  Requirements and any Contract with a Governmental Authority to which it is a party.  In addition, Buyer  shall cause the Molina Plan to use commercially reasonable efforts to become certified by CMS as a  Medicare Advantage Organization prior to January 1, 2022.                  Section 4.7 Employees.                      (a)   Effective on or before January 1, 2021, Buyer or one of its Affiliates shall   offer employment to the Seller Employees set forth on Schedule 4.7(a)(i), which schedule shall be mutually   agreed to by the Parties promptly following the date hereof and attached hereto, in each case on at at-will   basis (such employees who accept such employment with Buyer or its applicable Affiliate, as offered, are   referred to herein as the “Early Transferred Employees”).  Effective as of January 1, 2021, Buyer or one of   its  Affiliates  shall  offer  employment  to  the  Seller  Employees  then  employed  by  Seller  or  Evolent  and   providing  services  on  behalf  of  the  Business  set  forth  on  Schedule  4.7(a)(ii),  which  schedule  shall  be   mutually agreed to by the Parties promptly following the date hereof and attached hereto (it being the intent   of the Parties that, subject to Section 4.6(d), Buyer or one of its Affiliates will offer employment to all Seller   Employees then employed by Seller or Evolent and providing services on behalf of the Business prior to   January 1, 2021) subject to mutually agreed upon exclusions for certain executives of Seller),, in each case   on an at-will basis (such employees who accept such employment with Buyer or its applicable Affiliate, as   offered,  are  referred  to  herein  as  the  “Delayed  Transferred  Employees”  and,  together  with  the  Early   Transferred  Employees,  the  “Transferred  Employees”).   Prior  to  January  1,  2021,  Seller  may  update   Schedule 4.7(a)(i) (other than with respect to Early Transferred Employees that accept employment with   Buyer or one of its Affiliates) and 4.7(a)(ii) to reflect personnel replacements made in the Ordinary Course   of Business or with the express written consent of Buyer.                           (b)   Effective as of the applicable Employee Transfer Date, Seller and Evolent   shall terminate the employment of such Transferred Employees and Seller and Evolent shall be responsible   for (i) the payment of all wages and other remuneration due to the Transferred Employees with respect to   their services as employees of Seller or Evolent through the applicable Employee Transfer Date, including,   but not limited to, any and all accrued compensation and benefits arising from any salary, wage, benefits,   bonus, vacation, sick leave, continuing medical education leave, paid-time off, insurance, employment tax,   or  similar Liability  of  Seller  or  Evolent to  any  employee  or  other  similar  person  or entity  allocable to   services performed prior to the applicable Employee Transfer Date, and (ii) the payment of any termination   or severance payments and the provision of health plan continuation coverage (including all administrative   and notice obligations) under COBRA, or any other Legal Requirement, with respect to Seller Employees   who are not hired by Buyer or one of its Affiliates. Seller or Evolent, as applicable, shall make or cause to                                         -26-                                              

 

   be made on behalf of all the Seller Employees all contributions due to be made under each Seller Benefit  Plan for all periods prior to the applicable Employee Transfer Date, with respect to such Seller Employee  who is an Early Transferred Employees, or January 1, 2021, with respect to all other Seller Employees.   Additionally, Seller or Evolent, as applicable, shall take such actions as are necessary to make, or cause  each Seller Benefit Plan to make, appropriate distributions to all the employees of Seller or Evolent that are  required to be made prior to January 1, 2021, in accordance with such Seller Benefit Plan and applicable  Legal Requirements.                       (c)   Seller and Evolent, as applicable, shall be fully responsible for all claims,  obligations, and liabilities with respect to any and all employees of Seller and Evolent arising out of or  relating to acts or omissions of Seller or Evolent, as applicable, occurring before January 1, 2021, including  claims, obligations, and liabilities related to hiring, discipline, or termination, salary, wages, bonuses, or  other forms of compensation, severance pay, sick or vacation leave, or any other employment-related leave,  workers’ compensation or unemployment benefits, disability benefits, pension benefits, retirement benefits,  or any other Plans.  Seller and Evolent shall ensure that any bonuses which would have been payable on or  after January 1, 2021 for services rendered by the Transferred Employees prior to January 1, 2021 are paid  on a pro-rated basis on or before the applicable Employee Transfer Date.  For the avoidance of doubt, Seller  and  Evolent,  as applicable,  shall  be  responsible (and Buyer  shall  have  no obligation,  responsibility,  or  liability whatsoever) for any and all such claims, obligations, and liabilities with respect to such Seller  Employees that arise out of or relate to acts or omissions of Seller or Evolent, as applicable, occurring prior  to  January  1,  2021,  irrespective  of  whether  the  associated  or  corresponding  request  for  damages,  compensation,  benefit,  attorneys’  fees,  costs,  or  any  other  item  of  value  is  submitted  or  received  after  January 1, 2021.                       (d)   Commencing on the applicable Employee Transfer Date and ending on the  twelve (12) month anniversary of the applicable Employee Transfer Date (or, if earlier, the date of the  Transferred Employee’s termination of employment with Buyer or one of its Affiliates), Buyer shall ensure  that  Transferred  Employees  receive  compensation  (including  salary,  wages,  and  opportunities  for  commissions,  bonuses,  incentive  pay,  overtime,  and  premium  pay),  severance  benefits,  and  employee  welfare and retirement benefits that are, in the aggregate, substantially comparable to those provided to  such Transferred Employee immediately prior to such Transferred Employee’s Employee Transfer Date;  provided, however, that Buyer shall have the discretion to replace or substitute any equity-based bonus or  incentive  arrangements  with  cash  bonus  programs;  provided,  further,  that  neither  Buyer  nor  any  of  its  Affiliates shall be obligated to create or implement any type of employee benefit plans or arrangements that  Buyer does not otherwise provide or make available to its or its Affiliates’ similarly-situated employees.                     (e)   For  eligibility  to  participate  and  vesting  purposes  under  the  employee  benefit and compensation plans of Buyer and its Affiliates, including vacation policies and severance plans,  providing  benefits  and  compensation  to  any  Transferred  Employee  after  such  Transferred  Employee’s  Employee Transfer Date (the “New Plans”), each Transferred Employee shall be credited with his or her  years  of  service  with  Seller,  Evolent,  and  their  Affiliates  and  respective  predecessors  before  such  Transferred Employee’s Employee Transfer Date to the same extent as such Transferred Employee was  entitled, before such Transferred Employee’s Employee Transfer Date to credit for such service under any  similar and corresponding Seller Benefit Plan in which such Transferred Employee participated or was  eligible to participate immediately prior to such Transferred Employee’s Employee Transfer Date (such  plans, collectively, the “Old Plans”); provided that the foregoing credit shall not apply: (i) to the extent that  its application would result in a duplication of benefits for the same period of service; (ii) under a defined  benefit  pension  plan  or  retiree  medical  plan,  or  (iii) for  purposes  of  qualifying  for  subsidized  early  retirement  benefits.   In  addition,  and  without  limiting  the  generality  of  the  foregoing,  Buyer  and  its  Affiliates shall (x) cause each Transferred Employee to be immediately eligible to participate, without any  waiting time, in any and all New Plans, (y) cause all pre-existing condition exclusions and actively-at-work                                        -27-                                            

 

   requirements  in any  New Plan  providing  medical,  dental,  pharmaceutical and/or  vision  benefits  to any  Transferred Employee, to be waived for such employee and his or her covered dependents, unless such  conditions would not have been waived under the Old Plan providing corresponding benefits in which such  Transferred  Employee  participated,  and  (z) use  commercially  reasonable  efforts  to  cause  any  eligible  expenses incurred by such Transferred Employee and his or her covered dependents during the portion of  the  plan  year  of  the  Old  Plan  ending  on  the  date  such  Transferred  Employee’s  participation  in  the  corresponding New Plan begins to be taken into account under such New Plan for purposes of satisfying  all  deductible,  coinsurance  and  maximum  out-of-pocket  requirements  applicable  to  such  Transferred  Employee and his or her covered dependents for the applicable plan year as if such amounts had been paid  in accordance with such New Plan.                     (f)   Buyer  shall  take  the  necessary  action,  including  any  necessary  plan  amendments, to cause the tax-qualified defined contribution retirement plan maintained by Buyer or its  Affiliates in which the Transferred Employees are eligible to participate (the “Buyer 401(k) Plan”) to permit  each Transferred Employee to make rollover contributions of “eligible rollover distributions” (within the  meaning of Section 401(a)(31) of the Code, excluding loans), in the form of cash, in an amount equal to the  full account balance distributable to such Transferred Employee from the applicable defined contribution  plan of Seller, Evolent and its Affiliates in which such Transferred Employee participated to the applicable  Buyer 401(k) Plan.                     (g)   Notwithstanding any provision in this Agreement to the contrary, nothing  herein is intended to, and shall not be construed to, (i) create any third party beneficiary rights of any kind  or nature, including, without limitation, the right of any Transferred Employee or other Person to seek to  enforce any right to compensation, benefits, or any other right or privilege of employment with Seller,  Evolent  or  Buyer  or  any  of  their  respective  Affiliates,  or  (ii)  be  deemed  to  be  the  adoption  of,  or  an  amendment to, any employee benefit plan, program, arrangement, contract or practice, or otherwise limit  the  right  of  the  Parties  to  amend,  modify  or  terminate  any  of  their  respective  employee  benefit  plans,  programs, arrangements, contracts or practices.                     (h)   Following the Closing until January 1, 2021, upon the reasonable request  of Buyer, Seller and Evolent shall make the Seller Employees who are not Early Transferred Employees  who  transferred  on  the  Closing  Date  reasonably  available  to  Buyer  and  its  Affiliates  for  purposes  of  (i) training and on-boarding of such employees; (ii) providing reasonable transition support to Buyer and  its Affiliates in connection with its assumption of the Business or as otherwise may be reasonably requested  by  Buyer  in  connection  with  its  acquisition  of  the  Acquired  Assets,  including,  without  limitation,  in  connection  with  implementation  of  the  Molina  Plan’s  new  Medicaid  contract  and,  if  applicable,  Dual  Eligible Special Needs Plan contract effective on January 1, 2021 and the Molina Plan’s readiness review  in  connection  therewith;  and  (iii) for  such  other  purposes  as  the  Parties  may  reasonably  agree  to  in  connection with the transactions contemplated hereby.                       (i)   To the extent the hiring by Buyer or its Affiliates of the Early Transferred  Employees or efforts by Seller Employees who are not Early Transferred Employees under Section 4.7(h)  above result in a material disruption of operations of Seller or Evolent or lead to material costs or expenses  to Seller or Evolent, the Parties agree to negotiate in good faith to reach an agreement on reasonable expense  reimbursement as a result of such disruption, cost or expense.               Section 4.8 Other Closing Deliverables.  From the date of this Agreement through  the  Closing  Date,  the  Parties  shall  negotiate  in  good  faith  to  finalize  the  other  Closing  deliverables  contemplated by Section 5.2 and Section 5.3 to be agreed upon by the Parties.                                          -28-                                            

 

               Section 4.9 Transition Services Agreement.  The Parties will negotiate in good faith  regarding a 2021 management agreement, on terms consistent with those set forth on Annex 4.9, for certain  services to be provided by Evolent to Buyer and its Affiliates such as claims processing and other mutually  agreed upon transition services.  The Parties shall agree on pricing and scope regarding system access prior  to Closing and shall use commercially reasonable efforts to agree on other pricing and scope prior to Closing  and in any event, by October 31, 2020.  In the event the Parties have failed to reach agreement with respect  to pricing within the time frames stated above, they shall mutually engage a reputable national independent  third party valuation firm with experience in healthcare services to determine pricing and the determination  of such third party valuation firm shall be final and binding on the Parties.                 Section 4.10 Public Announcements.  Unless otherwise required by applicable Legal  Requirements or stock exchange requirements (based upon the reasonable advice of counsel), no Party shall  make any public announcements in respect of this Agreement or the transactions contemplated thereby or  otherwise communicate with any news media without the prior written consent of the other Party (which  consent shall not be unreasonably withheld, conditioned or delayed). Promptly following the execution of  this Agreement, Seller, Evolent and Buyer may issue a press release, in each case, in a form mutually agreed  to by Seller, Evolent and Buyer announcing the execution of this Agreement. Thereafter, each of Seller,  Evolent and Buyer hereby agrees to (a) obtain prior approval (which approval shall not be unreasonably  withheld,  conditioned  or  delayed)  from  the  other  Party  prior  to  issuing  any  press  release  or  otherwise  making any public statement with respect to this Agreement or the terms hereof and (b) provide to the other  Party for review and approval (which approval shall not be unreasonably withheld, conditioned, or delayed)  a copy of any such press release or statement, and shall not issue any such press release or make any such  public statement prior to such consultation, review and approval by the other Party, unless in any such case  required by applicable Legal Requirements or securities exchange rules or regulations.  Prior to the Closing  and subject to applicable Legal Requirements, the Parties will consult with each other concerning the means  by which any employee, Provider, customer or supplier of Seller or any other Person having any business  relationship with Seller will be informed of the transactions contemplated by this Agreement.               Section 4.11 Access; Preservation of Records.                     (a)   From  and  after  the  date  hereof  until  January  1,  2021  and  subject  to  applicable Legal Requirements, Seller shall: (i) give Buyer and its Representatives reasonable access to the  Records of Seller and its Affiliates relating to the Business, the Acquired Assets and the Enrollees to the  extent relevant to the Novations and the orderly transition of the Enrollees (including as necessary to ensure  continuity of care to such Enrollees) and (ii) furnish, and cause its Affiliates to furnish, to Buyer and its  Representatives such financial and operating data and other information that is in Seller’s and its Affiliates’  possession and in the format maintained by Seller or its applicable Affiliate relating to the Acquired Assets  and the Business as such Persons may reasonably request, except, in each case, for information that, if  provided, would cause the forfeiture of attorney-client or attorney work product privilege, and information  or materials required to be kept confidential by applicable Legal Requirements. The information provided  pursuant to this Section 4.11(a) shall be used solely for the purpose of the transactions contemplated by this  Agreement, and such information shall be kept confidential by Buyer in accordance with Section 4.4.                     (b)   From and after the Closing, Seller, Evolent and Buyer agree that each of  them shall preserve and keep, or cause to be kept, any Records held by them or their Affiliates relating to  the Acquired Assets for a period equal to the greater of (a) seven (7) years from the Closing or (b) such  period required by applicable Legal Requirements, and shall cause such Records and, in the case of Buyer,  personnel  to  be  available  during  regular  business  hours  to  the  other  as  may  be  reasonably  required  in  connection  with:  (i)  investigating,  settling,  preparing  for  the  defense  or  prosecution  of,  defending  or  prosecuting any Proceeding by or before any court or other Governmental Authority; (ii) preparing reports  to Governmental Authorities; (iii) preparing and delivering any accounting or other statement provided for                                        -29-                                            

 

   under  this  Agreement  or  otherwise  in  order  to  enable  Seller,  Evolent  and  Buyer  to  comply  with  their  respective  obligations  under  this  Agreement  and  each  other  agreement,  document  or  instrument  contemplated hereby or thereby; (iv) preparing Tax Returns or responding to or disputing any Tax inquiry,  audit or assessment; provided; or (v) any other commercially reasonable purpose, including, with respect  to Seller and Evolent, if applicable, the run-out and winding down of the Business; provided, however, that  such access does not unreasonably interfere with normal operations of the Person providing access to the  same and shall occur during normal business hours upon reasonable notice, shall be subject to restrictions  under applicable Legal Requirements and shall not require disclosure of information subject to attorney- client privilege.               Section 4.12 Notification and Effect of Certain Matters.  Each Party shall promptly  notify the other Parties of (i) any written notice or other written communication from any Person alleging  that the consent of such Person is or may be required in connection with the transactions contemplated by  this Agreement, (ii) the occurrence or nonoccurrence of any fact or event which would reasonably be likely  to  cause  any  conditions  set  forth  in  ARTICLE  VI  not  to  be  satisfied,  (iii)  any  Proceeding  pending  or  threatened against a Party or any of its Affiliates in connection with the transactions contemplated by this  Agreement, or (iv) any material written notice or other written communication from any Governmental  Authority outside the Ordinary Course of Business relating to the Business or the transactions contemplated  hereby; provided, that no such notification, nor the obligation to make such notification shall affect the  representations, warranties, covenants, agreements, or conditions to the obligations of any Party hereunder.               Section 4.13 Transfer  Taxes.  Any  transfer,  documentary,  sales,  use,  stamp,  registration and other similar Taxes and fees (including any penalties and interest) (collectively, “Transfer  Taxes”) incurred in connection with the transactions contemplated by this Agreement shall be borne equally  by Buyer and Seller. The Party responsible under applicable Legal Requirements for filing the Tax Returns  with respect to such Transfer Taxes shall prepare and timely file such Tax Returns at such Party’s sole cost  and  expense  and  promptly  provide  a  copy  of  such  Tax  Return  to  the  other  Party.   The  Seller  and  the  Purchaser shall, and shall cause their respective Affiliates to, cooperate to timely prepare and file any Tax  Returns or other filings relating to such Transfer Taxes, including any claim for exemption or exclusion  from the application or imposition of any Transfer Taxes.               Section 4.14 Restrictive Covenants.                      (a)   For the period from the Closing Date through the two (2) year anniversary  of the Closing Date, Seller and Evolent (collectively, the “Seller Group”), shall not, directly or indirectly,  solicit, induce or attempt to influence any employee of Buyer or its Affiliates providing services on behalf  of  the  Molina  Plan,  including,  without  limitation,  any  Transferred  Employee,  to  terminate  his  or  her  employment relationship with Buyer or its Affiliates, as applicable.  No member of the Seller Group shall  be prohibited from hiring any person who (i) responds to general solicitations for employment (including  through the use of a professional search agency) not directed at Buyer or its Affiliates; or (ii) ceased to be  an employee of Buyer or any of its Affiliates before such solicitation for employment.                     (b)   For the period from the Closing Date through the five (5) year anniversary  of the Closing Date, the Seller Group shall not, except as expressly contemplated by this Agreement or any  transaction document entered into in connection herewith, engage or participate, directly or indirectly, in  the ownership, management, development, operation or control of,  or the provision of services to, any  business that is competitive with the Business (as conducted as of the Closing Date) in the Commonwealth  of Kentucky; provided, however, nothing herein shall prohibit (i) any Person from being a passive owner  of not more than five percent (5%) of the outstanding stock of any class of a corporation which is publicly  traded, so long as such Person has no active participation in the business of such corporation; (ii) any Person  from engaging in any line of business or holding any interests in any Person that such Person engages in or                                        -30-                                            

 

   holds as of immediately prior to the consummation of the transactions contemplated hereby; or (iii) Evolent  from providing back-office services to any business that is competitive with the Business.  In addition, for  the avoidance of doubt, this Section 4.14 shall not apply to a third party acquirer of Evolent.               Section 4.15 D-SNP Administrative Services Agreement.  In  the  event  the  Required D-SNP Regulatory Approvals are not obtained and the D-SNP Novation is not consummated  prior to January 1, 2021, on January 1, 2021 Seller and Buyer or its applicable Affiliate shall enter into an  administrative services agreement on terms substantially consistent with the UHC Services Agreement with  such additional terms as the Parties mutually agree.               Section 4.16 2022 D-SNP Bid.  From and after the date hereof until the D-SNP  Contract Transfer Date,  Seller shall, and shall cause its Affiliates to, reasonably cooperate and work with  Buyer and its Affiliates in preparing the 2022 D-SNP Bid.               Section 4.17 Seller Name.  Seller  expressly  agrees  that,  on  and  after  the  Closing  Date, it shall not have any right, title or interest in any trade names, trademarks, identifying logos or service  marks employing the words “Passport Health Plan” or any variation thereof (the “Name”) or any other  trademarks,  service  marks,  product  line  names,  trade  dress  or  other  intangible  assets  included  in  the  Acquired Assets or confusingly similar thereto, except for such licensee rights granted to Seller pursuant to  the Intellectual Property License Agreement.  Seller agrees that without the prior written consent of Buyer,  neither it nor any of its Affiliates shall make any use of the Name from and after the Closing Date except  in accordance with the Intellectual Property License Agreement.  Seller shall also provide Buyer with such  assistance as reasonably requested by Buyer in order to effectuate the transfer of trademarks, trade names  and domain names within forty-five (45) days following the Closing Date.  Additionally, Seller shall file  such documents with the applicable Governmental Authorities to change the legal name of Seller to a name  that is not similar to the Name promptly following the Closing.                                    ARTICLE V                        CLOSING AND CLOSING DELIVERIES               Section 5.1 Closing.  The closing of the acquisition of the Acquired Assets and the  assumption by Buyer of the Assumed Liabilities subject in each case to the terms of the Bill of Sale (the  “Closing”)  and  the  consummation  of  the  other  transactions  contemplated  hereby  will  take  place  by  exchange of electronic signatures (the date on which the Closing occurs is referred to herein as the “Closing  Date”): on the earlier of (A) September 1, 2020 or (B) within three (3) Business Days following receipt of  the  Required Medicaid  Regulatory  Approvals  and  the  Medicaid  Novation, and in  each  case, following  satisfaction  or  waiver  of  all  other  conditions  to  the  obligations  of  the  Parties  to  consummate  such  transactions (other than conditions that by their nature are to be satisfied at the Closing, but subject to the  satisfaction or waiver of such conditions at the Closing); provided, however, that in the event of a Successful  Protest on or prior to September 1, 2020, the Closing shall not occur, and this Agreement may be terminated  in accordance with Section 8.1(b).                 Section 5.2 Closing  Deliveries  by  Seller.   At  the  Closing  (or  such  other  time  as  indicated below), Seller will deliver, or cause to be delivered, to Buyer, the following:                     (a)   the Escrow Agreement, duly executed by Seller;                     (b)   a Bill of Sale, Assignment and Assumption Agreement, in a form mutually  agreed to by the Parties (the “Bill of Sale”), dated as of the Closing and to be effective as of the applicable  Transfer Date of the applicable Acquired Asset;                                           -31-                                            

 

                     (c)   a Master Services Agreement, in substantially the form attached hereto as  Exhibit B (the “NCH Master Services Agreement”), duly executed by NCH Management Services, Inc.  d/b/a New Century Health;                       (d)   a Reinsurance Agreement (the “New Reinsurance Agreement”), in form  and substance reasonably acceptable to the Parties, by and between Buyer or its applicable Affiliate and  Seller, duly executed by Seller;                      (e)   an Interim Services Agreement, in substantially the form attached hereto  as Exhibit C as modified to implement that certain Memorandum of Understanding by and between Seller  and Evolent without regard to the gainshare reflected therein (the “Interim Services Agreement”), duly  executed by Evolent;                      (f)   a  Services  Agreement,  in  substantially  the  form  attached  hereto  as  Exhibit D (the “Management Agreement”), duly executed by Seller and Evolent;                     (g)   a certificate of the Secretary or other authorized officer of Seller, certifying  as to the resolutions or actions of Seller’s board of directors or other governing body and shareholders  approving the execution and delivery of this Agreement and each other agreement contemplated hereby to  which such Person is a party and the consummation of the transactions contemplated hereby, and certifying  to  the  incumbency  of  the  officer  of  Seller  executing  this  Agreement  and  any  other  documents  being  executed in connection with the consummation of the transactions contemplated hereby and thereby;                     (h)   a certificate, duly executed by an authorized officer of Seller that each of  the conditions set forth in Section 6.1(a) and Section 6.1(b) have been satisfied;                     (i)   evidence  of  the  release  of  any  Encumbrances  (other  than  Permitted  Encumbrances) upon the Acquired Assets;                     (j)   a  trademark  assignment  agreement  with  respect  to  any  registered  Trademarks owned by Seller, in a form mutually agreed to by the Parties (the “Trademark Assignment  Agreement”), duly executed by Seller;                     (k)   an  Intellectual  Property  License  Agreement  with  respect  to  the  Seller  Intellectual  Property  in  substantially  the  form  attached  hereto  as  Exhibit  E  (the  “Intellectual  Property  License Agreement”), duly executed by Seller;                     (l)   a good standing certificate (or equivalent document) for Seller from the  Secretary  of  State  of  the  jurisdiction  of  its  organization  and  from  the  Secretary  of  State  of  all  other  jurisdictions where Seller is qualified to do business as a foreign entity, in each case, dated within five (5)  days prior to the Closing Date;                     (m)   if the Required Regulatory Approval(s) are obtained and the Novation(s)  are consummated at or prior to the Closing (or if obtained and consummated following the Closing, at such  time), such documents and agreements as may be required by CHFS, the DOI, CMS or any other applicable  Governmental Authority to reflect the Novation(s) (but subject to the conditions set forth herein); and                     (n)   such other agreements, documents and certificates required to be delivered  by Seller or Evolent pursuant to this Agreement at the Closing Date.                                         -32-                                            

 

               Section 5.3 Closing  Deliveries  by  Buyer.   At  the  Closing  (or  such  other  time  as  indicated below), Buyer will deliver, or cause to be delivered, to Seller, the following:                      (a)   the Escrow Agreement, duly executed by Buyer and the Escrow Agent;                     (b)   the Bill of Sale, duly executed by Buyer or its applicable Affiliate;                     (c)   the NCH Master Services Agreement, duly executed by Buyer;                     (d)   the New Reinsurance Agreement, duly executed by the Molina Plan;                     (e)   the Interim Services Agreement, duly executed by the Molina Plan;                     (f)   the Management Agreement, duly executed by the Molina Plan;                     (g)   a  certificate  of  the  Secretary  or  other  authorized  officer  of  Buyer,  certifying as to the resolutions or actions of Buyer’s board of directors or other governing body approving  the execution and delivery of this Agreement and each other agreement contemplated hereby to which such  Person is a party and the consummation of the transactions contemplated hereby, and certifying to the  incumbency of the officer of Buyer executing this Agreement and any other documents being executed in  connection with the consummation of the transactions contemplated hereby and thereby;                     (h)   a certificate, duly executed by an authorized officer of Buyer that each of  the conditions set forth in Section 6.2(a) and Section 6.2(b) have been satisfied;                     (i)   the  Trademark  Assignment  Agreement,  duly  executed  by  Buyer  or  its  applicable Affiliate;                     (j)   the Intellectual Property License Agreement, duly executed by Buyer or  its applicable Affiliate;                     (k)   if the Required Regulatory Approval(s) are obtained and the Novation(s)  are consummated at or prior to the Closing (or if obtained and consummated following the Closing, at such  time), such documents and agreements as may be required by CHFS, the DOI, CMS or any other applicable  Governmental Authority to reflect the Novation(s) (but subject to the conditions set forth herein); and                     (l)   such other agreements, documents and certificates required to be delivered  by Buyer pursuant to this Agreement at the Closing Date.                                    ARTICLE VI                     CONDITIONS TO OBLIGATIONS TO CLOSE               Section 6.1 Conditions to Obligation of Buyer to Closing.  The obligation of Buyer  to effect the closing of the transactions contemplated herein with respect to the acquisition of the Acquired  Assets  and  the  assumption  of  the  Assumed  Liabilities  and  to  consummate  the  other  transaction  contemplated to take place at the Closing is subject to the satisfaction at the Closing of all of the following  conditions, any one or more of which may be waived by Buyer, in Buyer’s sole discretion:                     (a)   Accuracy of Representations and Warranties.  Each representation and  warranty  of  Seller  in  ARTICLE  II  (disregarding  any  materiality  or  Seller  Material  Adverse  Effect  qualifications) shall be true and correct as of the Closing Date as if made on the Closing Date (or, in each                                         -33-                                            

 

   case, if any such representation and warranty is expressly stated to have been made as of a specific date,  then, for such representation and warranty, as of such specific date), except for any failure of any such  representation and warranty to be true and correct that does not have a Seller Material Adverse Effect,  except that the Seller Fundamental Representation shall be true and correct in all but de-minimis respects  as of the Closing Date (except to the extent any such representation or warranty is expressly made as of an  earlier date or time, in which case as of such earlier date or time).                      (b)   Observance  and  Performance.   Seller  shall  have  performed  and  complied with, in all material respects, all covenants and agreements required by this Agreement to be  performed  and  complied with  by  Seller  on  or  before  the  Closing  Date, except  that  with  respect to  the  covenants  and  agreements  set  forth  in  Section  4.5  and  Section  4.10  Seller  shall  have  performed  and  complied with such covenants and agreements in all respects.                     (c)   Closing  Deliverables.   Seller  will  have  delivered  (or  caused  to  be  delivered) to Buyer each of the items contemplated to be so delivered by this Agreement, including each  item listed in Section 5.2.                     (d)   No  Legal  Proceedings.   No  Governmental  Authority  of  competent  jurisdiction will have instituted any Proceeding to restrain, prohibit or otherwise challenge the legality or  validity of the transactions contemplated herein that has not been dismissed or otherwise resolved in a  manner that does not materially and adversely affect the transactions contemplated herein and no injunction,  order or decree of any Governmental Authority will be in effect that restrains or prohibits the acquisition  of the Acquired Assets or the consummation of the other transactions contemplated herein.                     (e)   No Successful Protest.  A Successful Protest shall not have occurred.                 Section 6.2 Conditions  to  Obligation  of  Seller  and  Evolent  to  Closing.   The  obligation of Seller and Evolent to effect the closing of the transactions contemplated herein with respect  to the acquisition of the Acquired Assets and the assumption of the Assumed Liabilities and to consummate  the other transaction contemplated to take place at the Closing is subject to the satisfaction at the Closing  of all of the following conditions, any one or more of which may be waived by Seller, in Seller’s sole  discretion:                     (a)   Accuracy  of  Representations  and  Warranties.   Each  of  the  representations and warranties of Buyer in ARTICLE III of this Agreement (disregarding any materiality  qualifications) must be true and correct as of the Closing Date as if made on the Closing Date, except for  any failure of any such representation and warranty to be true and correct as would not reasonably be  expected to have a material adverse effect on Buyer’s ability to consummate the transactions contemplated  hereby, except that the Buyer Fundamental Representation shall be true and correct in all but de-minimis  respects as of the Closing Date (except to the extent any such representation or warranty is expressly made  as of an earlier date or time, in which case as of such earlier date or time).                     (b)   Observance and Performance.  Buyer will have performed and complied  with, in all material respects, all covenants and agreements required by this Agreement to be performed and  complied  with  by  Buyer  on  or  before  the  Closing  Date  except  that  with  respect  to  the  covenants  and  agreements set forth in Section 4.5 and Section 4.10 Buyer shall have performed and complied with such  covenants and agreements in all respects.                     (c)   Closing  Deliverables.   Buyer  will  have  delivered  (or  caused  to  be  delivered) to Seller each of the items contemplated to be so delivered by this Agreement, including each  item listed in Section 5.3.                                         -34-                                            

 

                     (d)   No  Legal  Proceedings.   No  Governmental  Authority  of  competent  jurisdiction will have instituted any Proceeding to restrain, prohibit or otherwise challenge the legality or  validity of the transactions contemplated herein that has not been dismissed or otherwise resolved in a  manner that does not materially and adversely affect the transactions contemplated herein and no injunction,  order or decree of any Governmental Authority will be in effect that restrains or prohibits the acquisition  of the Acquired Assets or the consummation of the other transactions contemplated herein.               Section 6.3 Conditions to Obligation of Each Party to Closing in Connection with  the  Medicaid  Novation.   In  additional  to  the  conditions  set  forth  in  Section  6.1  and  Section  6.2,  the  obligation of each Party to effect the Medicaid Novation is subject to the satisfaction at the Closing of all  of the following conditions, any one or more of which may be only be waived by all of the Parties:                     (a)   Required  Regulatory  Approvals.  The  approvals,  consents,  notices  and/or authorizations of the Governmental Authorities with respect to the Medicaid Novation set forth on  Annex 6.3(a) (the “Required Medicaid Regulatory Approvals”) shall have been obtained and there shall not  be any Burdensome Condition.         For the avoidance of doubt, the receipt of the Required Medicaid Regulatory Approvals and the  consummation of the Medicaid Novation are not a condition to the Closing, and in the event the Required  Medicaid Regulatory Approvals and the consummation of the Medicaid Novation is not obtained prior to  August 27, 2020, then the Closing shall take place, subject to the conditions set forth in Section 6.1 and  Section 6.2, on September 1, 2020 as contemplated by Section 5.1.               Section 6.4 Conditions to Obligation of Each Party to Closing in Connection with  the D-SNP Novation.  In addition to the conditions set forth in Section 6.1 and Section 6.2, the obligation  of each Party to effect the D-SNP Novation is subject to the satisfaction at the Closing of all of the following  conditions, any one or more of which may be only be waived by all of the Parties:                     (a)   Required  Regulatory  Approvals.  The  approvals,  consents,  notices  and/or authorizations of the Governmental Authorities with respect to the D-SNP Novation set forth on  Annex 6.4(a)  (the  “Required  D-SNP  Regulatory  Approvals”  and  together  with  the  Required  Medicaid  Regulatory Approval, the “Required Regulatory Approvals”) shall have been obtained and there shall not  be any Burdensome Condition.                     (b)   D-SNP Contract.  The D-SNP Contract shall be in full force and effect  and shall not have been terminated.         For  the  avoidance  of  doubt,  the  receipt  of  the  Required  D-SNP  Regulatory  Approvals  and  the  consummation of the D-SNP Novation are not a condition to the Closing, and in the event the Required D- SNP Regulatory Approvals and the consummation of the D-SNP Novation is not obtained prior to August  27, 2020, then the Closing shall take place, subject to the conditions set forth in Section 6.1 and Section  6.2, on September 1, 2020 as contemplated by Section 5.1.                                    ARTICLE VII                                INDEMNIFICATION               Section 7.1 Survival.  All representations, warranties, covenants, and obligations in  this Agreement, the Schedules attached hereto, the certificates delivered pursuant to ARTICLE VI, and any  other certificate or document delivered pursuant to this Agreement will survive the Closing, as applicable,  and the consummation of the transactions contemplated hereby, subject to Section 7.5.                                         -35-                                            

 

               Section 7.2 Indemnification  and  Reimbursement  By  Seller.  From  and  after  the  Closing, subject to the other provisions of this ARTICLE VII, Seller shall indemnify and hold harmless  Buyer  and  its  Affiliates,  officers,  directors,  stockholders,  employees,  representatives  and  agents  (collectively, the “Buyer Indemnified Persons”), and shall reimburse the Buyer Indemnified Persons, for  any loss, Proceeding, liability, claim, damage or expense (including costs of investigation and defense and  reasonable  attorneys’  fees  and  expenses),  whether  or  not  involving  a  Third-Party  Claim  (collectively,  “Damages”; provided, however, that Damages shall not include special, consequential or punitive damages  except  to  the  extent  awarded  in  connection  with  a  Third-Party  Claim  or  that  constitute  consequential  damages  that  were  probable  or  reasonably  foreseeable  and  a  direct  result  of  the  related  breach  of  this  Agreement), arising, directly or indirectly, from or in connection with:                     (a)   any  breach  of  any  representation  or  warranty  made  by  Seller  in  this  Agreement, or any certificate delivered by Seller at the Closing pursuant to this Agreement, in each case  without  giving  effect  to  any  of  the  qualifications  as  to  materiality,  Material  Adverse  Effect  or  similar  qualifications set forth in such representations and warranties; provided, however, such qualifications shall  remain in effect with respect to (i) the representations and warranties set forth in (A) the second sentence  of Section 2.5(h), (B) Section 2.12(f)(ii), and (C) the second sentence of Section 2.17, and (ii) the defined  terms “Material Contract”, “Material Vendor” and “Seller Material Adverse Effect”;                     (b)   any breach of any covenant or agreement contained in this Agreement to  be performed or complied with by Seller or Evolent;                      (c)   any Excluded Liabilities;                     (d)   any Liabilities imposed on Buyer solely as a result of Buyer being deemed  a successor in interest to Seller (or other similar designation based on any legal theory of successor liability),  other than with respect to any Assumed Liability, notwithstanding the intention of the Parties that such  Liabilities be retained by Seller; and                     (e)   subject  to  Buyer’s  compliance  with  its  obligations  set  forth  in  Section  4.7(d), any Liabilities arising directly or indirectly under the WARN Act or its state or local equivalents, as  a result of the transactions contemplated by this Agreement, including, but not limited to, in respect of any  plant closing, mass layoff, termination, or relocation by Seller or Evolent, as applicable, of the employment  of any of its employees on or prior to the later of (i) the Closing and (ii) January 1, 2021.               Section 7.3 Indemnification  and  Reimbursement  by  Buyer.  From  and  after  the  Closing, subject to the other provisions of this ARTICLE VII, Buyer shall indemnify and hold harmless  Seller  and  Evolent  and  their  respective  Affiliates,  officers,  directors,  stockholders,  employees,  representatives and agents (collectively, the “Seller Indemnified Persons”), and shall reimburse the Seller  Indemnified Persons for any Damages arising, directly or indirectly, from or in connection with:                     (a)   any  breach  of  any  representation  or  warranty  made  by  Buyer  in  this  Agreement, or any certificate delivered by Buyer at the Closing pursuant to this Agreement, in each case  without  giving  effect  to  any  of  the  qualifications  as  to  materiality,  material  adverse  effect  or  similar  qualifications set forth in such representations and warranties;                     (b)   any breach of any covenant or agreement contained in this Agreement to  be performed or complied with by Buyer; and                     (c)   any Assumed Liabilities provided that such Assumed Liabilities have been  assumed by Buyer by operation of this Agreement at the time of any indemnity claim hereunder.                                         -36-                                            

 

               Section 7.4 Limitations  on  Indemnification  by  Seller.  Notwithstanding  anything  contained  herein  to  the  contrary,  the  obligation  of  Seller  to  indemnify  the  Buyer  Indemnified  Persons  pursuant to Section 7.2 is subject to the following limitations and qualifications:                     (a)   Seller will have no indemnification liability under Section 7.2 until the  total amount of Damages incurred by the Buyer Indemnified Persons hereunder exceeds one-half percent  (0.5%) of the Purchase Price as finally determined taking into account the Membership Purchase Price (the  “Deductible”), in which case Seller will be responsible for the amount of the Damages in excess of the  Deductible.                     (b)   The maximum indemnification liability of Seller under Section 7.2(a) will  be an amount equal to ten percent (10%) of the Purchase Price as finally determined taking into account the  Membership Purchase Price.                     (c)   The limitations set forth in clauses (a) and (b) of this Section 7.4 shall not  apply  to  breaches  of  Section  2.1,  Section  2.2,  Section  2.7,  and  Section  2.20  (the  “Seller  Fundamental  Representations”).                     (d)   The maximum liability of Seller under this ARTICLE VII shall in no event  exceed the Purchase Price actually received by Seller hereunder, except in the event of fraud or intentional  misrepresentation.               Section 7.5 Time Limitations.                     (a)   Seller  will  have  no  indemnification  liability  for  the  breach  of  any  representation or warranty set forth in ARTICLE II unless, on or before March 31, 2022, Buyer notifies  Seller of a claim specifying the factual basis of that claim in reasonable detail to the extent then known by  Buyer; provided, however, that any claim with respect to a breach of any Seller Fundamental Representation  may be made by Buyer until the expiration of the applicable statute of limitations.                     (b)   Buyer  will  have  no  indemnification  liability  for  the  breach  of  any  representation or warranty set forth in ARTICLE III unless, on or before March 31, 2022, Seller notifies  Buyer of a claim specifying the factual basis of that claim in reasonable detail to the extent then known by  Seller; provided, however, that any claim with respect to a breach of any Buyer Fundamental Representation  may be made until the expiration of the applicable statute of limitations.                     (c)   All other claims for indemnification shall survive indefinitely.               Section 7.6 Third-Party Claims.                     (a)   Promptly after receipt by a Person entitled to indemnity under Section 7.2  or Section 7.3 (an “Indemnified Person”) of notice of the assertion of any claim against any Indemnified  Person by a third party (a “Third-Party Claim”), such Indemnified Person shall give prompt notice to the  Person  obligated to indemnify under  such  section (an  “Indemnifying  Person”) of  the  assertion  of  such  Third-Party Claim, provided that the failure to promptly notify the Indemnifying Person will not relieve the  Indemnifying Person of any liability that it may have to any Indemnified Person, except to the extent that  the Indemnifying Person demonstrates that the defense of such Third-Party Claim is prejudiced by the  Indemnified Person’s failure to give such notice.                     (b)   If an Indemnified Person gives notice to the Indemnifying Person pursuant  to  Section  7.6(a)  of  the  assertion  of  a  Third-Party  Claim,  the  Indemnifying  Person  shall  be  entitled  to                                         -37-                                            

 

   participate  in  the  defense  of  such  Third-Party  Claim  and,  to  the  extent  that  it  wishes  (unless  (i) the  Indemnifying Person is also a Person against whom the Third-Party Claim is made and the Indemnified  Person determines in good faith that joint representation would be inappropriate or (ii) the Indemnifying  Person fails to provide reasonable assurance to the Indemnified Person of its financial capacity to defend  such Third-Party Claim and provide indemnification with respect to such Third-Party Claim), to assume  the defense of such Third-Party Claim with counsel reasonably satisfactory to the Indemnified Person if the  Indemnifying Person delivers written notice to the Indemnified Party within thirty (30) days after its receipt  of notice of the assertion of such Third Party Claim.  After notice from the Indemnifying Person to the  Indemnified  Person  of  its election to  assume the  defense of such  Third-Party Claim, the  Indemnifying  Person shall not, so long as it diligently conducts such defense, be liable to the Indemnified Person under  this ARTICLE VII for any fees of other counsel or any other expenses with respect to the defense of such  Third-Party Claim, in each case subsequently incurred by the Indemnified Person in connection with the  defense of such Third-Party Claim, other than reasonable costs of investigation.  If the Indemnifying Person  assumes the defense of a Third-Party Claim, (i) such assumption will conclusively establish for purposes  of this Agreement that the claims made in that Third-Party Claim are within the scope of and subject to  indemnification,  (ii) no  compromise  or  settlement  of  such  Third-Party  Claims  may  be  effected  by  the  Indemnifying Person without the Indemnified Person’s consent unless (A) there is no finding or admission  of any violation of any Legal Requirement or any violation of the rights of any Person; and (B) the sole  relief provided is monetary damages that are paid in full by the Indemnifying Person; (iii) the Indemnified  Person shall have no liability with respect to any compromise or settlement of such Third-Party Claims  effected without its consent; and (iv) the Indemnified Personal shall be entitled to retain separate co-counsel  at its sole cost and expense and participate in the defense of the Third-Party Claim but the Indemnifying  Party shall control the investigation, defense and settlement thereof.  If notice is given to an Indemnifying  Person of the assertion of any Third-Party Claim and the Indemnifying Person does not give notice to the  Indemnified  Person  of  its election to  assume the  defense of such  Third-Party Claim, the  Indemnifying  Person  will  be  bound  by  any  determination  made  in  such  Third-Party  Claim  or  any  compromise  or  settlement effected by the Indemnified Person.                     (c)   With respect to any Third-Party Claim subject to indemnification under  this ARTICLE VII: (i) both the Indemnified Person and the Indemnifying Person, as the case may be, shall  keep the other Person fully informed in all material respects of the status of such Third-Party Claim and  any related proceedings at all stages thereof where such Person is not represented by its own counsel, and  (ii) the Parties agree to render to each other such assistance as they may reasonably require of each other  and to cooperate in good faith with each other to ensure the proper and adequate defense of any Third-Party  Claim.                     (d)   Notwithstanding  the  foregoing,  the  Indemnifying  Person  will  not  be  entitled to assume (or retain, as applicable) control of such defense if the claim for indemnification relates  to or arises in connection with a Tax which is assessed or proposed to be assessed against Buyer or any of  its Affiliates.                Section 7.7 Procedure  For  Indemnification  –  Other  Claims.  A  claim  for  indemnification for any matter not involving a Third-Party Claim may be asserted by notice to the Party  from whom indemnification is sought, provided that the failure to promptly notify the Indemnifying Person  will not relieve the Indemnifying Person of any Liability that it may have to any Indemnified Person, except  to the extent that the Indemnifying Person demonstrates that the defense of such claim is prejudiced by the  Indemnified Person’s failure to give such notice.  Any disputes in respect of such indemnification claim  shall be resolved in accordance with the dispute resolution provisions set forth in this Agreement.               Section 7.8 Additional Limitations.                                         -38-                                            

 

                     (a)   For purposes of calculating Damages under this ARTICLE VII, (A) such  Damages shall be determined without duplication of recovery by reason of the state of facts giving rise to  such Damage constituting a breach of more than one (1) representation, warranty, covenant, agreement, (B)  such Damages shall be reduced by the amount of any prior or subsequent recovery by an Indemnified Party  from any other Person with respect to such Damages (net of any costs or expenses incurred by any such  Indemnified Party in connection with securing or obtaining such recovery from such other Person including  any applicable deductible, co-payment or retention, any increase in or retrospective or retroactive premiums  and all costs of recovery); provided, however, that such Indemnified Party shall promptly reimburse the  Indemnifying Party for any subsequent recoveries from such sources if previously indemnified hereunder  so as to avoid a double recovery.                     (b)   Each Party shall use its commercially reasonable efforts to mitigate any  Damages.               Section 7.9 Exclusive Remedy.  Except for the remedies of specific performance or  injunctive or other equitable relief, the indemnification provisions of this ARTICLE VII will constitute the  sole and exclusive available to any Party (and any Seller Indemnified Person or Buyer Indemnified Person,  insofar as such person has any rights hereunder) following the Closing for any claim arising out of this  Agreement or the transactions contemplated hereby (but excluding for the avoidance of doubt claims arising  under the other Transaction Documents) absent fraud.               Section 7.10 Treatment of Indemnification Payments.  Any payments made pursuant  to the indemnification obligations arising under this Agreement shall be treated as an adjustment to the  Purchase Price for all Tax purposes.                                   ARTICLE VIII                             TERMINATION; UNWIND               Section 8.1 Termination.  This Agreement may be terminated at any time prior to the  Closing:                      (a)   By mutual agreement of Buyer and Seller;                      (b)   By Buyer, if a Successful Protest occurs;                      (c)   By  either  Buyer  or  Seller,  if  the  Closing  shall  not  have  occurred  by  October 1, 2020 (the “Termination Date”); provided, that, the right to terminate this Agreement under this  Section 8.1(c) shall not be available to any Party that has breached in any material respect its obligations  under this Agreement in any manner that shall have proximately caused the failure of the Closing to be  consummated prior to the Termination Date;                     (d)   By  Buyer,  in  the  event  there  has  been  a  breach  of  any  representation,  warranty, covenant or agreement made by Seller or Evolent in this Agreement, or any representation and  warranty shall have become untrue after the date of this Agreement, such that Section 6.1(a) or Section  6.1(b) would not be satisfied and such breach or failure to be true is not curable or, if curable, is not cured  prior to the earlier of (A) thirty (30) days following notice to Seller from Buyer of such breach or failure  and (B) the Termination Date; provided, that, Buyer shall not have the right to terminate this Agreement  pursuant to this Section 8.1(d) if Buyer is then in material breach of any of its representations, warranties,  covenants or agreements under this Agreement; and                                         -39-                                            

 

                     (e)   By  Seller,  in  the  event  there  has  been  a  breach  of  any  representation,  warranty, covenant or agreement made by Buyer in this Agreement, or any representation and warranty  shall have become untrue after the date of this Agreement, such that Section 6.2(a) or Section 6.2(b) would  not be satisfied and such breach or failure to be true is not curable or, if curable, is not cured prior to the  earlier of (A) thirty (30) days following notice to Buyer from Seller of such breach or failure and (B) the  Termination Date; provided, that, Seller shall not have the right to terminate this Agreement pursuant to  this Section 8.1(e) if Seller is then in material breach of any of its representations, warranties, covenants or  agreements under this Agreement.               Section 8.2 Effect of Termination.  In the event of the termination of this Agreement,  this Agreement shall thereafter become void and have no effect (except that the Parties’ obligations pursuant  to Sections Section 4.4, ARTICLE VIII and ARTICLE IX shall survive the termination of this Agreement),  and no Party shall have any liability to any other Party or its members, shareholders or directors or officers  in respect thereof, except that nothing herein will relieve any Party from liability for any willful misconduct  or intentional breach of this Agreement prior to such termination.                 Section 8.3 Unwind.  In the event a Successful Protest occurs at any time between the  Closing and January 1, 2021, Buyer may elect to rescind the transactions contemplated by this Agreement  (a “Successful Protest Unwind”) by delivering written notice to Seller of such election prior to  January 1,  2021.  If Buyer delivers such notice, the Parties acknowledge and agree that the transactions contemplated  by this Agreement shall be rescinded in such manner as shall, as nearly as practicable, restore to all Parties  their respective rights, titles, and interests as enjoyed by each of them immediately prior to Closing in and  to the cash, properties, rights and interests that were transferred at Closing, and the Parties shall use their  respective  best  efforts  to  effect  the  foregoing.   Seller  shall  accept  the  reconveyance  by  Buyer  or  its  applicable Affiliate of the Acquired Assets, this Agreement shall terminate in accordance with Section 8.2  and the Closing Purchase Price and the Membership Purchase Price, if applicable, shall be paid to Buyer in  accordance with Section 8.3(a) or, if sufficient funds are not available in the Escrow Account, by Seller by  wire transfer of immediately available funds to an account(s) designated by Buyer.                       (a)   In the event of a Successful Protest Unwind, the Parties shall execute joint  written instructions to effect the distribution of the Closing Purchase Price to Buyer.  Alternatively, Buyer  may  deliver to  the  Escrow  Agent  a  final,  non-appealable  order  of  a  court  of  competent  jurisdiction  or  confirmation  by  a  court  of  competent  jurisdiction  of  an  arbitral  award  ordering  the  Escrow  Agent  to  distribute the Closing Purchase Price to Buyer.                     (b)   The  Parties  shall  negotiate  in  good  faith,  execute  and  deliver  such  documents,  and  instruments  and  perform  such  other  acts  as  may  be  necessary  for  the  complete  implementation of this Section 8.3, including, without limitation, the following:                            (i)   a Bill of Sale, Assignment and Assumption Agreement;                            (ii)  a trademark assignment agreement with respect to any registered  Trademarks assigned to Buyer from Seller in connection with this Agreement;                            (iii) termination of the NCH Master Services Agreement;                            (iv)  Buyer or its applicable Affiliate shall terminate the employment  of the Early Transferred Employees and Seller or Evolent shall offer employment to such Early Transferred  Employees on an at-will basis on the terms of employment (including compensation, severance benefits  and employee welfare and retirement benefits) in effect for such Early Transferred Employees immediately  prior to the Employee Transfer Date; and                                         -40-                                            

 

                           (v)   Buyer or its applicable Affiliate shall not offer employment to the  Delayed Transferred Employees in accordance with Section 4.7.                      (c)   In the event that any termination or severance payments are owed to any  Early  Transferred  Employees  as  a  result  of  a  Successful  Protest  Unwind,  Seller  and  Evolent  shall  be  responsible for all such payments.                     Except as otherwise provided herein, each Party shall be solely responsible for and  shall  pay  all  costs  and  expenses  incurred  by  it  in  connection  with  the  negotiation,  preparation  and  performance of and compliance with the terms of this Section 8.3.                                      ARTICLE IX                              GENERAL PROVISIONS               Section 9.1 Expenses.  Except as set forth above or as otherwise expressly provided  in this Agreement, each Party shall bear its respective expenses incurred in connection with the preparation,  execution, and performance of this Agreement and the transactions contemplated hereby, including all fees  and expenses of its Representatives.               Section 9.2 Assignment; No Third Party Beneficiaries.  No Party may assign any of  its rights or delegate any of its obligations under this Agreement without the prior written consent of the  other Party, except that Buyer may assign any or all of its rights and obligations under this Agreement  without prior written consent to any of its Subsidiaries or Affiliates, provided that no such assignment shall  relieve Buyer of any of its obligations hereunder.  Subject to the preceding sentence, this Agreement will  apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of  the Parties.  Nothing in this Agreement will be construed to give any Person other than the Parties to this  Agreement any legal or equitable right under or with respect to this Agreement or any provision of this  Agreement, and except such rights as will inure to a successor or permitted assignee pursuant to this Section  9.2 and except with respect to any Seller Indemnified Person or Buyer Indemnified Person.               Section 9.3 Notices.  All  notices,  requests  and  other  communications  to  any  party  hereunder shall be in writing (including electronic mail (“e-mail”) transmission) and shall be given,               If to Seller or Evolent:  Evolent Health LLC                                      800 N. Glebe Road, Suite 500                                      Arlington, Virginia 22203                                      Attention: Jonathan Weinberg, General Counsel                                      E-mail: jweinberg@evolenthealth.com                                                    with a copy, which will not constitute notice to Seller or Evolent, to:                                                    Bass, Berry & Sims PLC                                      150 Third Avenue South, Suite 2800                                      Nashville, Tennessee 37201                                      Attention: Angela Humphreys and Price W. Wilson                                      E-mail:ahumphreys@bassberry.com;                                       pwilson@bassberry.com                                                    If to Buyer:           Molina Healthcare, Inc.                                      200 Oceangate, Suite 100                                      Long Beach, California 90802                                        -41-                                            

 

                                       Attention: Jeff Barlow, Chief Legal Officer and                                       Burt Park, Deputy General Counsel                                      Email:  jeff.barlow@molinahealthcare.com;                                      burt.park@molinahealthcare.com                                                    with a copy, which will not constitute notice to Buyer, to:                                                    Sheppard Mullin Richter & Hampton, LLP                                       1901 Avenue of the Stars – 16th Floor                                      Century City, CA 90067                                      Attention: Aytan Dahukey, Esq. and Eric Klein, Esq.                                      Email:  adahukey@sheppardmullin.com;                                      eklein@sheppardmullin.com   or such other address or e-mail as such Party may hereafter specify for the purpose by notice to the other  Party hereto.  All such notices, requests and other communications shall be deemed received on the date of  receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a Business  Day in the place of receipt.  Otherwise, any such notice, request or communication shall be deemed not to  have been received until the next succeeding Business Day in the place of receipt.               Section 9.4 Waiver.  Neither the failure nor any delay by any Party in exercising any  right under this Agreement or the documents referred to in this Agreement will operate as a waiver of such  right, and no single or partial exercise of any such right will preclude any other or further exercise of such  right or the exercise of any other right.  Any waiver hereunder shall be in writing.               Section 9.5 Entire  Agreement;  Modification.  This  Agreement  (together  with  the  Annexes, Schedules and Exhibits attached to this Agreement and the other documents delivered pursuant  to this Agreement) constitutes the entire agreement among the Parties and supersedes all prior agreements,  whether written or oral, between the Parties with respect to the subject matter hereof and thereof.  This  Agreement may not be amended except by a written agreement signed by each of the Parties.               Section 9.6 Severability.  If any provision of this Agreement is held to be invalid or  unenforceable  for  any  reason,  such  provision  shall  be  ineffective  to  the  extent  of  such  invalidity  or  unenforceability; provided, however, that the remaining provisions will continue in full force and effect  without being impaired or invalidated in any way unless such invalid or unenforceable provision or clause  is so significant  as to materially affect the expectations of Buyer and Seller regarding this Agreement.   Otherwise,  any  invalid  or  unenforceable  provision  shall  be  replaced  by  Buyer  and  Seller  with  a  valid  provision which most closely approximates the intent and economic effect of the invalid or unenforceable  provision.               Section 9.7 Headings; Construction.  The headings of Articles and Sections in this  Agreement are provided for convenience only and will not affect its construction or interpretation.  All  Annexes, Exhibits and Schedules to this Agreement are incorporated into and constitute an integral part of  this Agreement as if fully set forth herein.  All words used in this Agreement will be construed to be of  such gender or number as the context requires.  The word “including” shall be read as “including but not  limited to” and otherwise shall be considered illustrative and non-limiting.  All references to dollars or “$”  in this Agreement will be to U.S. dollars. The language used in the Agreement will be construed, in all  cases, according to its fair meaning, and not for or against any party hereto.  The Parties acknowledge that  each Party has reviewed this Agreement and that rules of construction to the effect that any ambiguities are  to be resolved against the drafting Party will not be available in the interpretation of this Agreement.                                         -42-                                            

 

               Section 9.8 Governing Law.  This  Agreement, and any claims that arise out of or  result from this Agreement, shall be governed by and construed in accordance with the laws of the State of  Delaware without regard to any applicable conflicts of laws.  Any action or proceeding seeking to enforce  any provision of, or based on any right arising out of, the transactions contemplated by this Agreement must  be brought against any of the Parties in a federal or state court located in Delaware.               Section 9.9 Execution  of  Agreement;  Counterparts.  This  Agreement  may  be  executed  in  one  or  more  counterparts,  each  of  which  will  be  deemed  to  be  an  original  copy  of  this  Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.   The exchange of copies of this Agreement and of signature pages by facsimile, or by .pdf or similar imaging  transmission, will constitute effective execution and delivery of this Agreement as to the Parties and may  be used in lieu of the original Agreement for all purposes.  Signatures of the Parties transmitted by facsimile,  or by .pdf or similar imaging transmission, will be deemed to be their original signatures for any purpose  whatsoever.               Section 9.10 Enforcement  of  Agreement.  The  Parties  acknowledge  and  agree  that  irreparable damage would occur in the event any of the provisions of this Agreement are not performed in  accordance  with  their  specific  terms  and  that  any  breach  of  this  Agreement  could  not  be  adequately  compensated by monetary damages. Accordingly, each Party agrees that, in addition to any other right or  remedy to which each Party may be entitled, at law or in equity, each Party will be entitled to enforce any  provision  of  this  Agreement  by  a  decree  of  specific  performance  and  to  temporary,  preliminary  and  permanent injunctive relief to prevent breaches or threatened breaches of the provisions of this Agreement,  without posting any bond or other undertaking.               Section 9.11 Guarantee.                     (a)   Evolent hereby guarantees, as a guaranty of payment and not merely as a  guaranty of collection, to Buyer the full and prompt payment when due of all obligations and liabilities of  Seller  under  and  in  accordance  with  the  terms  set  forth  in  this  Agreement  (the  “Seller  Guaranteed  Obligations”).   The  obligation  of  Evolent  under  this  Section  9.11(a)  is  an  absolute,  unconditional  and  continuing guaranty of payment of the Seller Guaranteed Obligations and shall survive the Closing and  continue to be in full force and be binding upon Evolent until the Seller Guaranteed Obligations, including  any payments to be made in connection with a Successful Protest Unwind, have been paid in full.  Evolent  agrees that its obligations hereunder shall not be affected, modified or impaired upon the happening from  time  to  time  of  any  of  the  following  events,  whether  or  not  with  notice  or  consent  of  Evolent  (i)  the  compromise, settlement, release, change, modification or amendment of any or all of the obligations, duties,  covenants or agreements of any party under this Agreement or (ii) the extension of the time for performance  or payment of money pursuant to this Agreement, or of the time for performance of any other obligations,  covenants or agreements under or arising out of this Agreement.  The obligations of Evolent hereunder are  not subject to any defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of any  provision  of  applicable  Legal  Requirements  purporting  to  prohibit  payment  by  Seller  of  the  Seller  Guaranteed Obligations or any part thereof.  The obligations of Evolent hereunder are not discharged or  impaired or otherwise affected by (1) any failure to assert any claim or demand or to enforce any remedy  with respect to all or any part of the Seller Guaranteed Obligations, (2) any waiver or modification of, or  supplement to, any provision of this Agreement, or (3) any default, failure or delay, willful or otherwise, in  the payment or performance of any of the Seller Guaranteed Obligations, or any other circumstance, act,  omission or delay that might in any manner or to any extent vary the risk of Buyer or that would otherwise  operate as a discharge of Seller as a matter of law or equity (other than the payment in full of the Seller  Guaranteed Obligations).  To the fullest extent permitted by applicable Legal Requirements, Evolent hereby  waives any defense based on the unenforceability of all or any part of the Seller Guaranteed Obligations  from any cause, or the cessation from any cause of the liability of Seller, other than the payment in full of                                        -43-                                            

 

   the Seller Guaranteed Obligations. Buyer may compromise or adjust any part of the Seller  Guaranteed  Obligations, make any other accommodation with Seller or exercise any other right or remedy available to  it against Seller, without affecting or impairing in any way the liability of Evolent under this Section 9.11(a)  prior  (and  subject  to)  the  payment  in  full  of  the  Seller  Guaranteed  Obligations.   To  the  fullest  extent  permitted by applicable Legal Requirements, Evolent waives any defense arising out of any such election  even though that election may operate, pursuant to applicable Legal Requirements, to impair or extinguish  any right of reimbursement or subrogation or other right or remedy of Evolent against Seller.                      (b)   To the extent any obligations under this Agreement are assigned by Buyer  to one of its subsidiaries or Affiliates, Buyer hereby guarantees, as a guaranty of payment and not merely  as a guaranty of collection, to Seller the full and prompt payment when due of all obligations and liabilities  so  assigned  by  Buyer  under and in  accordance  with the  terms set  forth in  this Agreement (the “Buyer  Guaranteed Obligations”).  The obligation of Buyer under this Section 9.11(b) is an absolute, unconditional  and continuing guaranty of payment of the Buyer Guaranteed Obligations and shall survive the Closing and  continue to be in full force and be binding upon Buyer until the Buyer Guaranteed Obligations have been  paid in full.  Buyer agrees that its obligations hereunder shall not be affected, modified or impaired upon  the happening from time to time of any of the following events, whether or not with notice or consent of  Buyer (i) the compromise, settlement, release, change, modification or amendment of any or all of the  obligations, duties, covenants or agreements of any party under this Agreement or (ii) the extension of the  time for performance or payment of money pursuant to this Agreement, or of the time for performance of  any other obligations, covenants or agreements under or arising out of this Agreement.  The obligations of  Buyer  hereunder  are  not  subject  to  any  defense  or  setoff,  counterclaim,  recoupment,  or  termination  whatsoever by reason of any provision of applicable Legal Requirements purporting to prohibit payment  by Buyer of the Buyer Guaranteed Obligations or any part thereof.  The obligations of Buyer hereunder are  not discharged or impaired or otherwise affected by (1) any failure to assert any claim or demand or to  enforce any remedy with respect to all or any part of the Buyer Guaranteed Obligations, (2) any waiver or  modification of, or supplement to, any provision of this Agreement, or (3) any default, failure or delay,  willful or otherwise, in the payment or performance of any of the Buyer Guaranteed Obligations, or any  other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of Seller  or that would otherwise operate as a discharge of Buyer as a matter of law or equity (other than the payment  in  full  of  the  Buyer  Guaranteed  Obligations).   To  the  fullest  extent  permitted  by  applicable  Legal  Requirements, Buyer hereby waives any defense based on the unenforceability of all or any part of the  Buyer Guaranteed Obligations from any cause, or the cessation from any cause of the liability of Buyer,  other than the payment in full of the Buyer Guaranteed Obligations. Seller and Evolent may compromise  or adjust any part of the Buyer Guaranteed Obligations, make any other accommodation with Buyer or  exercise any other right or remedy available to either of them against an successor to Buyer’s interests or  obligations hereunder, without affecting or impairing in any way the liability of Buyer under this Section  9.11(b) prior (and subject to) the payment in full of the Buyer Guaranteed Obligations.  To the fullest extent  permitted by applicable Legal Requirements, Buyer waives any defense arising out of any such election  even though that election may operate, pursuant to applicable Legal Requirements, to impair or extinguish  any right of reimbursement or subrogation or other right or remedy of Buyer against any successor to its  interests or obligations hereunder.                 Section 9.12 Waiver  of  Jury  Trial.  THE  PARTIES  HERETO  KNOWINGLY,  VOLUNTARILY  AND  INTENTIONALLY  WAIVE,  TO  THE  EXTENT  PERMITTED  BY  APPLICABLE LEGAL REQUIREMENTS, ANY RIGHT TO A TRIAL BY JURY OF ANY DISPUTE  ARISING  UNDER  OR  RELATING  TO  THIS  AGREEMENT  AND  AGREE  THAT  ANY  SUCH  DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.                         [Remainder of Page Intentionally Left Blank]                                         -44-                                            

 

                                                                                       IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written  above.                                       SELLER:                                       PASSPORT HEALTH PLAN, INC.                                       By:                                                           Name:                                                   Its:                                                           EVOLENT:                                       EVOLENT HEALTH LLC                                       By:                                                           Name:                                                   Its:                                                           BUYER:                                       MOLINA HEALTHCARE, INC.                                       By:                                                           Name:                                                   Its:                                                            [Signature Page to Asset Purchase Agreement] 

 

                                            ANNEX A                            DEFINED TERMS   Capitalized terms used herein are defined in the provisions of the Agreement set forth below:    Defined Term                                  Section   Agreement                                     First Paragraph   Acquired Assets                               Section 1.1   Acquisition Proposal                          Section 4.5   Allocation                                    Section 1.8   Assumed Liabilities                           Section 1.3   Assumed Contracts                             Section 1.1(e)   Audit Reports                                 Section 2.5(d)   Balance Sheet Date                            Section 2.17   Bill of Sale                                  Section 5.2(b)   Burdensome Condition                          Section 4.2(d)   Business                                      Recitals   Buyer                                         First Paragraph   Buyer 401(k) Plan                             Section 4.7(f)   Buyer Guaranteed Obligations                  Section 9.11(b)   Buyer Indemnified Persons                     Section 7.2   Buyer Related Instruments                     Section 3.4   CHFS                                          Recitals   CHFS Medicaid Contract                        Recitals   Closing                                       Section 5.1   Closing Date                                  Section 5.1   Closing Purchase Price                        Section 1.7(a)   D-SNP Business                                Recitals   Damages                                       Section 7.2   Deductible                                    Section 7.4(a)   Delayed Transferred Employees                 Section 4.7(a)   Early Transferred Employees                   Section 4.7(a)   Evolent                                       First Paragraph   Excluded Assets                               Section 1.2   Excluded Contracts                            Section 1.2(e)   Excluded Liabilities                          Section 1.4   Excluded Records                              Section 1.2(d)   HIPAA                                         Section 2.10(a)(i)   Income Statement                              Section 1.7(c)(i)   Indemnified Person                            Section 7.6(a)   Indemnifying Person                           Section 7.6(a)   Independent Accountant                        Section 1.7(c)(iii)   Intellectual Property License Agreement       Section 5.2(k)   Interim Period                                Section 1.7(c)(i)   Interim Services Agreement                    Section 5.2(e)   IP Registrations                              Section 2.14(a)   Management Agreement                          Section 5.2(f)   Material Contract                             Section 2.13(a)   Material Vendors                              Section 2.16(a)   Medicaid Business                             Recitals                                   A-1 

 

                Defined Term                                  Section  Membership Purchase Price                     Section 1.7(b)  Name                                          Section 4.17  NCH Master Services Agreement                 Section 5.2(c)  New Plans                                     Section 4.7(e)  New Reinsurance Agreement                     Section 5.2(d)  Objection Notice                              Section 1.7(c)(ii)  Old Plans                                     Section 4.7(e)  Party                                         First Paragraph  PHS                                           Recitals  Pre-Closing Novation Period                   Section 4.2(a)  Privacy Laws                                  Section 2.10(a)(i)  Provider Contract                             Section 1.1(e)  Purchase Price                                Section 1.7  Real Property                                 Section 2.15(a)  Regulatory Filings                            Section 2.5(d)  Required D-SNP Regulatory Approvals           Section 6.3(a)  Required Medicaid Regulatory Approvals        Section 6.3(a)  Required Regulatory Approvals                 Section 6.3(a)  Review Period                                 Section 1.7(c)(ii)  RFP                                           Recitals  Seller                                        First Paragraph  Seller Benefit Plans                          Section 2.12(b)  Seller Contractors                            Section 2.12(a)  Seller Employees                              Section 2.12(a)  Seller Financial Statements                   Section 2.17  Seller Fundamental Representations            Section 7.4(c)  Seller Guaranteed Obligations                 Section 9.11(b)  Seller Indemnified Persons                    Section 7.3  Seller Intellectual Property                  Section 2.14(a)  Seller Lessee Real Property                   Section 2.15(a)  Seller Lessee Real Property Leases            Section 2.15(a)  Seller Lessor Real Property                   Section 2.15(b)  Seller Lessor Real Property Leases            Section 2.15(b)  Seller Real Property Leases                   Section 2.15(b)  Seller Related Instruments                    Section 2.6  Services Agreement                            Recitals  Successful Protest Unwind                     Section 8.3  Tax Purchase Price                            Section 1.8  Termination Date                              Section 8.1(c)  Trademark Assignment Agreement                Section 5.2(j)  Transfer Taxes                                Section 4.13  Transferred Employees                         Section 4.7(a)   Third-Party Claim                             Section 7.6(a)  Top Providers                                 Section 2.16(b)  UHC                                           Recitals  UHC APA                                       Recitals  UHC Services Agreement                        Recitals                                                       A-2 

 

         For purposes of this Agreement, the following terms and variations thereof have the meanings  specified or referred to in this Annex A:         “2022 D-SNP Bid” means the information required to be submitted to CMS by 42 CFR Subpart F-  Submission of Bids, Premiums and Related Information and Plan Approval codified at 42 CFR § 422.250  et seq. and the Part C-Medicare Advantage and 1876 Cost Plan Expansion Application including, but not  limited to, pricing, plan benefit packages and formularies, in connection with an application to operate a  Medicare Advantage plan in calendar year 2022.           “Anthem” means Anthem Kentucky Managed Care Plan, Inc.          “Affiliate”  means,  with  respect  to  any  Person,  any  Person  directly  or  indirectly  controlling,  controlled by or under common control with such Person; provided, however, that UHC and PHS shall not  be deemed Affiliates of Seller or its other Affiliates.         “Business Day” means any day other than Saturday or Sunday or any other day which banks in  New York are permitted or required to be closed.         “Buyer Disclosure Schedules” means the disclosure schedules delivered by Buyer that qualify the  representations and warranties of Buyer in ARTICLE III and attached to this Agreement.         “CHFS Medicaid Contract Transfer Date” means the date on which the Medicaid Novation occurs.         “CHFS Membership File” means the 834 membership file delivered by CHFS or other applicable  Governmental Authority that shows the number of Medicaid Enrollees enrolled in the Molina Plan’s health  plans.         “CMS”  means  the  U.S.  Department  of  Health  and  Human  Services  Centers  for  Medicare  &  Medicaid Services.         “COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.         “Code” means the Internal Revenue Code of 1986, as amended.         “Confidential  Information”  means  any  proprietary  or  confidential  information  relating  to  the  business or affairs of Seller, Evolent or Buyer or their respective Subsidiaries and Affiliates, as applicable  (whether  or  not  such  information  is  embodied  in  writing  or  other  physical  form),  including,  without  limitation,  information  relating  to:  (i)  marketing  or  distribution  data,  (ii)  business  methods,  plans  and  efforts, (iii) personnel data, (iv) the identity of, or courses of dealings or contracts with, actual or potential  business relations, (v) financial statements or other financial information, (vi) computer databases, software  programs and information relating to the nature of the hardware or software and how such hardware or  software is used in combination or alone, (vii) servicing methods, equipment, programs, analyses or profit  margins,  and  (viii)  information  received  by  such  party  from  a  third  party  subject  to  the  terms  of  a  confidentiality,  non-disclosure  or  similar  agreement  or  with  the  reasonable  expectation  that  such  information would be treated as confidential or proprietary information.  Notwithstanding the foregoing,  Confidential Information will exclude information that is: (a) generally available to the public other than as  a result of improper disclosure by the receiving party, (b) reasonably believed by the receiving party to have  been lawfully obtained by the receiving party from a third party under no obligation of confidentiality, (c)  independently developed by the receiving party without any use of the Confidential Information, (d) previously  known to, developed by or in the possession of  the receiving party at the time of receipt thereof from the                                         A-3 

 

   disclosing party, or (e) approved in writing by the disclosing party for disclosure.  Failure to mark information  as confidential or proprietary will not adversely affect its status as Confidential Information.         “Contract”  means  any  contract,  agreement,  purchase  order,  warranty  or  guarantee,  license,  use  agreement, lease (whether for real estate, a capital lease, an operating lease or other any designation that  permits  the  use  of  any  property—real,  personal,  intellectual,  tangible,  intangible  or  mixed—without  transferring  the  title  to  the  property),  instrument  or  note,  in  each  case  that  creates  a  legally  binding  obligation, and in each case whether oral or written.         “DOI” means the Kentucky Department of Insurance.         “D-SNP Contract” means that certain State Medicaid Agency Agreement for Medicare Advantage  Dual  Special  Needs  Plan  by  and  among  the  Commonwealth  of  Kentucky,  Department  for  Medicaid  Services and UHC, dated June 19, 2017, and that certain Contract (H9870), effective through December  30,2020, by and between UHC and CMS, in each case, as amended, supplemented and renewed from time  to  time  and  including  all  addendum  thereto  (including  the  CMS  license  agreement)  or  any  successor  Contract thereto.         “D-SNP Contract Transfer Date” means the date on which the D-SNP Novation occurs.         “D-SNP Enrollees” mean individuals who are properly enrolled in a D-SNP plan offered by Seller  or UHC, as applicable.         “D-SNP Membership File” means the D-SNP membership file compiled by Seller that shows the  number of D-SNP Enrollees enrolled in Seller’s or UHC’s D-SNP plan and that takes into account data  derived from vendor files as well as information and files provided by CMS.         “D-SNP Novation” means the assignment and/or novation of the D-SNP Contract to Buyer or its  applicable Affiliate or the entry into a new Contract that supersede and replace the D-SNP Contract.         “Employee Transfer Date” means (i) with respect to the Early Transferred Employees, the date on  which such Early Transferred Employee is hired by Buyer or its applicable Affiliate, and (ii) with respect  to the Delayed Transferred Employees, January 1, 2021.         “Encumbrance” means any charge, claim, equitable interest, lien, encumbrance, option, pledge,  security interest, mortgage, encroachment, easement or restriction of any kind other than liens for taxes not  yet due and payable and inchoate liens.         “Enrollees” means collectively, the Medicaid Enrollees and the D-SNP Enrollees.         “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.         “ERISA Affiliate” means any Person, trade or business, whether or not incorporated, that is treated  as a single employer with Seller under Sections 414(b), (c), (m) or (o) of the Code.         “Evolent  Employees”  means  those employees  of  Evolent  or  its  Affiliates primarily  performing  services for the Business as of the date hereof, and who are set forth on Annex A-1, which such Annex will  be updated prior to January 1, 2021, to reflect terminations and replacement hires in the Ordinary Course  of Business.         “FAC” means the Secretary of the Finance and Administration Cabinet.                                         A-4 

 

         “GAAP” means United States generally acceptable accounting principles as applied by Seller prior  to the Closing Date.         “Governmental  Authority”  means  any  domestic  or  foreign  federal,  state,  provincial,  local  or  municipal  court,  legislature,  executive  or  regulatory  authority,  agency  or  commission,  or  other  governmental entity, authority or instrumentality, including, without limitation, any insurance or healthcare  regulatory authority or economic development board or authority.         “Governmental Authorization” means any domestic or foreign federal, state, provincial special or  local  license,  permit,  governmental  authorization,  certificate  of  exemption,  franchise,  accreditation,  registration, approval or consent.         “Health  Care  Laws”  means  all  Legal  Requirements  relating  to  (a)  the  licensure,  certification,  qualification  or  authority  to  transact  business  in  connection  with  the  provision  of,  payment  for,  or  arrangement  of,  health  benefits  or  health  insurance,  and  the  regulation  of  third-party  administrators,  utilization review organizations, managed care, third-party payors and persons bearing financial risk for the  provision  or  arrangement  of  health  care  items  and  services;  (b)  the  Programs;  (c)  the  solicitation  or  acceptance of improper incentives, inducements or remuneration, fraud and abuse, patient inducements,  patient  referrals  or  Provider  incentives,  including,  without  limitation,  the  following  statutes  and  all  regulations and guidance promulgated thereunder: the Federal anti-kickback law (42 U.S.C. § 1320a-7b),  the Stark laws (42 U.S.C. § 1395nn), the Federal False Claims Act (31 U.S.C. §§ 3729, et seq.), the Federal  Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a), the Federal Program Fraud Civil Remedies Act (31  U.S.C. § 3801 et seq.), the Federal Health Care Fraud law (18 U.S.C. § 1347), and any similar state Legal  Requirements; (d) the administration of healthcare claims or benefits or processing or payment for health  care services, treatment, devices or supplies furnished by Providers, including third party administrators,  utilization  review  agents  and  persons  performing  quality  assurance,  credentialing  or  coordination  of  benefits; (e) coding, coverage, reimbursement, claims submission, billing and collections related to any  Program or otherwise related to insurance fraud; (f) the privacy, security, integrity, accuracy, transmission,  storage or other protection of information, including without limitation HIPAA; (g) state insurance, health  maintenance organization or managed care (including Medicaid programs), including without limitation  those Legal Requirements and regulations pursuant to which Seller is required to be licensed or authorized  to  transact  business  as  a  health  maintenance  organization  in  Kentucky;  (h)  the  Patient  Protection  and  Affordable Care Act (Pub. L. 111-148) as amended by the Health Care and Education Reconciliation Act  of 2010 (Pub. L. 111-152), and all regulations promulgated thereunder, and (i) any other law or regulation  which  regulates  kickbacks,  patient  or  program  charges,  recordkeeping,  claims  process,  documentation  requirements, medical necessity, referrals, the hiring of employees or acquisition of services or supplies  from  those  who  have  been  excluded  from  government  health  care  programs,  quality,  safety,  privacy,  security, licensure, accreditation or any other aspect of providing health care services applicable to the  Business.         “Indebtedness” means, with respect to any Person, (i) indebtedness of such Person for borrowed  money, whether secured or unsecured, (ii) obligations of such Person for money owed evidenced by notes,  bonds, debentures or other similar instruments, (iii) obligations of such Person under conditional sale or  other title retention agreements relating to property purchased by such Person, (iv) capital lease obligations  of such Person, (v) obligations of such Person under acceptance, letter of credit or similar facilities, (vi)  obligations of such Person under interest rate cap, swap, collar or similar transaction or currency hedging  transactions, and (vii) guarantees of such Person of any such indebtedness referred to in clauses (i)-(vi).         “Intellectual Property” means all domestic and foreign (1) patents and patent applications, and all  patents issuing thereon, including, without limitation, utility, model and design patents and certificates of  invention,  together  with  all  reissue  patents,  patents  of  addition,  divisionals,  provisional  applications,                                         A-5 

 

   renewals,  continuations,  continuations-in-part,  substitutions,  additions,  extensions,  confirmations,  re- examinations, and all foreign counterparts of the forgoing which are in the process of being prepared, and  all inventions and improvements disclosed therein; (2) trademarks, service marks, trade dress, trade names,  brand names, designs, logos, commercial symbols and corporate names, and all registrations, applications  and goodwill associated therewith, and the right to recover for past, present and future infringement thereof  (collectively,  “Trademarks”);  (3)  copyrights  and  all  works  of  authorship,  whether  or  not  registered  or  copyrightable,  and  all  applications,  registrations,  and  renewals  in  connection  therewith;  (4)  software,  including, without limitation, computer programs, operating systems, applications, firmware, utilities, tools,  data  files,  databases,  graphics,  graphical  user  interfaces,  menus,  images,  icons,  forms,  methods  of  processing,  software  engines,  platforms,  schematics,  interfaces,  architecture,  file  formats,  routines,  algorithms, video players, transcoding systems, content management systems, data collection tools, any  updates,  enhancements,  replacements,  modifications  thereof,  and  any  and  all  specifications  and  documentation (including, but not limited to, developer notes, comments and annotations) related thereto  and all copyrights therein but excluding retail software products (“Software”); (5) domain names, Internet  addresses and other computer identifiers, web sites, URLs, web pages, unique phone numbers, registrations  for any of the foregoing and similar rights and items; (6) confidential and proprietary information, including  without  limitation,  trade  secrets,  know-how,  formulae,  ideas,  concepts,  discoveries,  innovations,  improvements,  results,  reports,  information  and  data,  research,  laboratory  and  programmer  notebooks,  methods, procedures, proprietary technology, operating and maintenance manuals, engineering and other  drawings  and  sketches,  customer  lists,  supplier  lists,  pricing  information,  cost  information,  business  manufacturing and production processes and techniques, designs, specifications, and blueprints, financial  data, marketing and business data, strategic business and development plans (collectively, “Trade Secrets”);  and (7) all other intellectual property and proprietary rights in any form or medium known as of the Closing  Date, all copies and tangible embodiments of the foregoing, and all goodwill associated with any of the  foregoing.         “IP License” means (i) Contracts pursuant to which Seller has acquired rights (including usage  rights) to any Seller Intellectual Property; and (ii) licenses or agreements pursuant to which Seller has  licensed, granted or transferred any Seller Intellectual Property to a third party.         “Knowledge” has the following meaning:  an individual will have “Knowledge” of a particular fact  or other matter if such individual, or any of his or her direct reports, is actually consciously aware of such  fact or matter.         “Knowledge of Buyer” (and any similar expression) means Knowledge of the Chief Executive  Officer, Chief Operating Officer, Chief Compliance Officer and Chief Financial Officer of the Molina Plan.         “Knowledge  of  Seller” (and  any  similar expression) means  Knowledge of the Chief  Executive  Officer, Chief Operating Officer, Chief Compliance Officer and Chief Financial Officer of Seller or the  Chief Compliance Officer or Chief Operating Officer of Evolent.         “Legal Requirement” means any domestic or foreign federal, state, provincial, local or municipal  law, ordinance, code, principle of common law, regulation, order or directive.         “Liabilities”  means  any  liabilities  or  obligations  whatsoever,  whether  matured  or  unmatured,  known or unknown, accrued or fixed, absolute or contingent or otherwise.         “Medicaid” means the means-tested entitlement program under Title XIX of the Social Security  Act, which provides federal grants to states for medical assistance based on specific eligibility criteria, as  set forth at 42 U.S.C. § 1396, et seq., as the same may be amended, and any successor law in respect thereof,  and encompasses each state’s implementation of such program.                                         A-6 

 

         “Medicaid Enrollees” mean individuals who are properly enrolled in a Medicaid managed care plan  offered by the Molina Plan or Seller, as applicable; provided, however, in the event the Molina Plan agrees  to transfer any Medicaid Enrollees between the Closing Date and the expiration of the Open Enrollment  Period to any third party for consideration, then those transferred Medicaid Enrollees shall be included in  the definition of Medicaid Enrollees.         “Medicaid Novation” means the assignment and/or novation of the CHFS Medicaid Contract to  Buyer or its applicable Affiliate or the entry into a new Contract that supersede and replace the CHFS  Medicaid Contract.         “Medical Claims” means, with respect to any measurement period, the aggregate dollar amount of  claims incurred by the Business with respect to covered medical services provided between the Closing  Date and January 1, 2021.         “Medicare” means the entitlement program under Title XVIII of the Social Security Act, which  provides  specified  medical  benefits  to  individuals  meeting  eligibility  criteria,  as  set  forth  at  42  U.S.C.  § 1395, et seq., as the same may be amended, and any successor law in respect thereof.         “Membership Purchase Price” has the meaning set forth on Annex 1.7(b).         “Membership Threshold” has the meaning set forth on Annex 1.7(b).         “Novations” means collectively the Medicaid Novation and the D-SNP Novation          “Open  Enrollment  Period”  means  the  open  enrollment  period  established  by  CHFS  or  other  applicable Governmental Authority in the ordinary course with respect to plan year 2021 and generally  applicable to Medicaid managed care organizations offering Medicaid health plans in the Commonwealth  of Kentucky during which an Enrollee may enroll or disenroll (whether by choice or as a result of auto- assignment) from a Medicaid health plan, which is currently anticipated to be from November 1, 2020  through January 31, 2021.         “Operating Income” means the operating income generated by the Business during the period of  time between the Closing and January 1, 2021 as determined in accordance with GAAP and calculated  consistent  with  the  example  calculation  attached  hereto  to  as  Annex  A-2  (the  “Example  Income  Statement”).         “Order”  means  any  writ,  order,  injunction,  judgment,  decree,  ruling,  assessment  or  arbitration  award of any Governmental Authority.         “Ordinary Course of Business” means any action (which includes, for this definition, any failure to  take action), condition, circumstance or status of or regarding a Person that  is consistent  with the past  practices of such Person and is taken or exists in the ordinary course of the normal operations of such  Person.         “Organizational Document” means, for any Person:  (a) the articles or certificate of incorporation,  formation or organization (as applicable) and the by-laws or similar governing document of such Person;  (b) any  limited  liability  company  agreement,  partnership  agreement,  operating  agreement,  stockholder  agreement, voting agreement, voting trust agreement or similar document of or regarding such Person;  (c) any other charter or similar document adopted or filed in connection with the incorporation, formation,  organization or governance of such Person; or (d) any amendment to any of the foregoing.                                         A-7 

 

         “Person” means any individual, partnership, limited partnership, corporation, business trust, limited  liability company, limited liability partnership, joint stock company, trust, unincorporated association, joint  venture or other entity, or any Governmental Authority.         “Permitted Encumbrance” means any of the following: (a) Encumbrances for Taxes, assessments,  charges, levies or other claims not yet delinquent, or the validity of which are being contested in good faith;  (b)  Encumbrances  imposed  by  Legal  Requirements,  such  as  materialmen’s,  mechanics’,  carriers’,  warehousemen’s, workmen’s and repairmen’s liens and other such liens for amounts not yet delinquent, or  the validity of which are being contested in good faith; (c) pledges or deposits to secure obligations under  workers’  compensation  Legal  Requirements  or  similar  legislation  or  to  secure  public  or  statutory  obligations; (d) non-exclusive licenses for Intellectual Property; and (e) contractual obligations under any  Contract assumed by Buyer pursuant to the terms of hereof.         “Pre-Closing Tax Period” means any Tax period ending on or before the applicable Transfer Date,  it being understood that to the extent necessary to carry out the intent of this Agreement, Pre-Closing Tax  Periods ending during the 2020 Tax year shall be determined on an Assumed Contract by Assumed Contract  (or an Acquired Asset by Acquired Asset) basis.         “Proceeding” means  any  action,  arbitration,  hearing,  litigation,  or suit  (whether  civil,  criminal,  administrative, judicial or investigative, whether formal or informal, whether public or private).         “Program” means Medicaid, Medicare, TRICARE, the Dual Eligible Special Needs program and  any other state or federal healthcare programs.         “Provider”  means  any  professional,  practitioner,  provider  or  supplier  of  healthcare  services,  devices, or supplies to individuals, including, but not limited to, nurses, nurse practitioners, physicians or  groups of physicians, hospitals, nursing homes, clinical laboratories, imaging provider, durable medical  equipment,  prosthetic,  orthotics  and  supplies  suppliers,  supplemental  benefit  providers  and  any  other  ancillary service providers.         “Real Estate Purchase Agreement” means that certain Real Estate Purchase and Sale Agreement,  dated as of the date hereof, by and between Seller and Buyer or one of its Affiliates.         “Records”  means  books,  records,  manuals  or  other  materials  or  similar  information  (including  customer records, personnel or payroll records, accounting or Tax records, purchase or sale records, price  lists, correspondence, quality control records or research or development files).         “Reinsurance  Agreement”  means  that  certain  Indemnity  Reinsurance  Agreement,  dated  as  of  December 30, 2019, by and between Seller and UHC.         “Representatives” means, for any Person, such Person’s officers, directors, managers, employees,  consultants,  agents,  financial  advisors,  attorneys,  accountants,  other  advisors,  Affiliates  and  other  representatives.         “SAP” means the statutory accounting principles prescribed or permitted by the DOI.         “Seller Disclosure Schedules” means the disclosure schedules delivered by Seller that qualify the  representations and warranties of Seller in ARTICLE II and attached to this Agreement.         “Seller  Material  Adverse  Effect”  means  any  material  adverse  effect  to  the  Acquired  Assets;  provided, however, that in determining whether a Seller Material Adverse Effect has or would occur, is                                         A-8 

 

   reasonably  likely  to  occur,  or  would  reasonably  be  expected  to  occur,  any  change  or  effect  on  Seller  primarily resulting from, or arising out of, any of the following, (either alone or in combination) shall be  excluded  and  disregarded:  (i)  changes  in,  or  conditions  affecting,  interest  rates  or  general  economic  conditions  in  the  United  States;  (ii)  changes  in,  or  conditions  affecting,  the  industries  in  which  Seller  operates; (iii) acts of war, terrorism, hostilities, or other similar events; (iv) natural disasters, pandemics  and other similar events beyond the reasonable control of Seller; (v) changes in Legal Requirements or SAP  or GAAP, or in the interpretation of the foregoing by any Person other than Seller; (vi) the results of the  RFP,  including  the  upcoming  termination  the  CHFS  Medicaid  Contract  and  D-SNP  Contract,  and  any  changes as a result of the Open Enrollment Period or any special opt-out period; or (vii) any change, effect  or circumstance resulting from the announcement or performance of this Agreement.         “Subsidiary” of a Person means any corporation or other legal entity of which such Person (either  alone or through or together with any other Subsidiary or Subsidiaries) is the general partner or managing  entity or of which at least a majority of the stock or other equity interests the holders of which are generally  entitled to vote for the election of the board of directors or others performing similar functions of such  corporation or other legal entity is directly or indirectly owned or controlled by such Person (either alone  or through or together with any other Subsidiary or Subsidiaries).         “Successful Protest” has the meaning set forth on Annex 8.3.         “Tax” or “Taxes” means all federal, state, local and foreign taxes (including, without limitation,  income, gross receipts, profit, alternative minimum, add on minimum, franchise, sales, use, real property,  personal property, ad valorem, excise, environmental (whether or not considered a tax under applicable  Legal Requirements and including under Section 59A of the Code), occupation, unemployment, disability,  payroll, employment, social security, wage withholding and bed taxes) and installments of estimated taxes,  assessments,  deficiencies,  levies,  imports,  duties,  withholdings,  or  other  similar  charges  of  every  kind,  character or description imposed by any Governmental Authority, and any interest, penalties or additions  to tax imposed thereon or in connection therewith.         “Tax Returns” means any return, declaration, report, claim for refund, or information return or  statement relating to Taxes, including any schedule or attachment thereto, and including any amendment  thereof.         “Transaction Documents” means this Agreement, all schedules, exhibits and annexes hereto, the  Seller  Related  Instruments  and  the  Buyer  Related  Instruments,  and  all  of  agreements  entered  into  in  connection with the execution and delivery of this Agreement and the consummation of the transactions  contemplated hereby.         “Transfer Date” means with respect to                (i) the CHFS Medicaid Contract, the CHFS Medicaid Contract Transfer Date,                (ii) the D-SNP Contract, the D-SNP Contract Transfer Date; and                (iii) any other Acquired Asset, the effective date of assignment and assumption set forth in        the Bill of Sale with respect to such Acquired Asset, which (a) with respect to the Seller Intellectual        Property, shall be the Closing Date, (b) with respect to the Assumed Contracts (other than the CHFS        Medicaid Contract and the D-SNP Contract) will be January 1, 2021 and (d) with respect to any        other Acquired Asset not otherwise addressed above, the applicable Transfer Date of the Acquired        Asset to which it relates.                                         A-9 

 

         “TRICARE”  means  the  program  of  medical  and  dental  care for members  of  the  United  States  uniformed services and certain former members of those services, and for their dependents, as set forth at  10 U.S.C. § 1071, et seq., as the same may be amended, and any successor law in respect thereof.         “UHC D-SNP Closing” means the D-SNP Closing as defined in the UHC APA.         “UHC D-SNP Closing Conditions” means the D-SNP Closing Conditions as defined in the UHC  APA.         “UHC Improvements” means the Improvements owned by UHC and PHS and as defined in the  UHC APA.         “UHC Owned Real Property” means the Owned Real Property owned by UHC and PHS and as  defined in the UHC APA.         “Warn Act” means the Worker Adjustment and Retraining Notification Act of 1988, as amended,  or any similar state, local, or non-U.S. law, regulation, or ordinance.                                         A-10Exhibit 10.1

 

AMENDMENT NO. 1

TO THE

INVESTMENT MANAGEMENT TRUST AGREEMENT

 

This Amendment No.
1 (this “Amendment”) to the Investment Management Trust Agreement is made as of May 5, 2020 by and between
Alberton Acquisition Corporation, a British Virgin Islands Company (the “Company”), and Continental Stock
Transfer & Trust Company, a New York corporation (the “Trustee”). All terms used but not defined
herein shall have the meanings assigned to them in the Trust Agreement.

 

WHEREAS, the Company
and the Trustee entered into the Investment Management Trust Agreement (“Trust Agreement”) effective
as of October 23, 2018;

 

WHEREAS, Section 1(i)
of the Trust Agreement sets forth the terms that govern the liquidation of the Trust Account under the circumstances described
therein;

 

WHEREAS, at a special
meeting of stockholders of the Company (the “Special Meeting”) held on April 23, 2020, holders of at
least 65% of the Company’s outstanding shares approved a proposal to amend (the “Extension Amendment”)
the Company’s amended and restated memorandum and articles of association (as may amended from time to time, the “M&A”)
to extend the date by which the Company shall be required to effect a Business Combination from April 27, 2020 to October 26, 2020
or such earlier date determined by the Board (the “Extended Date”); and

 

WHEREAS, on the date
hereof, the Company has filed the Extension Amendment with the Registrar of Corporate Affairs in the British Virgin Islands.

 

NOW THEREFORE, in consideration
of the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows:

 

		1.	Section 1(i) of the Trust Agreement is hereby amended and restated in its entirety as follows:

 

		(i)	Commence liquidation of the Trust Account only after and promptly after receipt of, and only in
accordance with, the terms of a letter (“Termination Letter”), in a form substantially similar to that attached hereto
as either Exhibit A or Exhibit B, signed on behalf of the Company by its President, Chief Executive Officer or Chairman of the
Board and Chief Financial Officer and, in the case of a Termination Letter in a form substantially similar to that attached hereto
as Exhibit A, acknowledged and agreed to by Chardan, and complete the liquidation of the Trust Account and distribute the Property
in the Trust Account only as directed in the Termination Letter and the other documents referred to therein; provided, however,
that in the event that a Termination Letter has not been received by the Trustee by the 24-month anniversary of the closing of
the IPO (“Closing”), the “Last Date”), the Trust Account shall be liquidated in accordance with the procedures
set forth in the Termination Letter attached as Exhibit B hereto and distributed to the Public Shareholders as of the Last Date.

 

		2.	All other provisions of the Trust Agreement shall remain unaffected by the terms hereof. This Amendment may be signed
in any number of counterparts, each of which shall be an original and all of which shall be deemed to be one and the same instrument,
with the same effect as if the signatures thereto and hereto were upon the same instrument. A facsimile signature shall be deemed
to be an original signature for purposes of this Amendment.

 

		3.	This Amendment is intended to be in full compliance with the requirements for an Amendment to the
Trust Agreement as required by Section 6(c) of the Trust Agreement, and every defect in fulfilling such requirements for an effective
amendment to the Trust Agreement is hereby ratified, intentionally waived and relinquished by all parties hereto.

 

		4.	This Amendment shall be governed by and construed and enforced in accordance with the laws of the
State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive
laws of another jurisdiction.

 

[Signature Page Follows]

 

    

     

    

 

IN WITNESS WHEREOF,
the parties have duly executed this Amendment to the Investment Management Trust Agreement as of the date first written above.

 

	 	CONTINETNAL STOCK TRANSFER & TRUST
	 	COMPANY, as Trustee
	 	 	 
	 	By:	/s/ FRANCIS WOLF
	 	Name:	FRANCIS WOLF
	 	Title:	VICE PRESIDENT
	 	 	 
	 	ALBERTON ACQUISITION CORPORATION
	 	 	 
	 	By:	/s/ Guan Wang
	 	Name: 	Guan Wang
	 	Title:	Chief Executive Officer and Chairman

 

 

[Signature Page to Amendment No. 1 to
the Investment Management Trust Agreement]

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