This excerpt taken from the WBMD 10-K filed Mar 16, 2006.
We continue to be dependent on Emdeon to provide us with services for our business
Prior to our IPO, we had been operated as a wholly owned subsidiary of Emdeon, and many key services required by us for the operation of our business were and continue to be provided to us by Emdeon. As a result, we are dependent on our relationship with Emdeon for these important services.
In connection with our IPO, we entered into agreements with Emdeon relating to certain intercompany transactions between us and Emdeon, including, among others, a services agreement, a registration rights agreement, an indemnity agreement, a tax sharing agreement and an intellectual property license agreement. The terms and provisions of these agreements may be less favorable to us than terms and provisions that we could have obtained in arms length negotiations with unaffiliated third parties. Under the services agreement, Emdeon provides us with administrative services, including services relating to payroll, accounting, tax planning and compliance, employee benefit plans, legal matters and information processing. Our services agreement with Emdeon is for a term of up to five years, however, we have the option to terminate these services, in whole or in part, at any time we choose to do so, generally by providing, with respect to the specified services or groups of services, 60 days notice and, in some cases, paying a termination fee of not more than $30,000 to cover the costs of Emdeon relating to the termination. Emdeon has the right to terminate the services that it provides to us, in whole or in part, if it ceases to provide such services itself, upon at least 180 days notice to us. If the services agreement expires or is otherwise terminated, or if Emdeon does not or is unable to perform its obligations under the services agreement, we will be required to provide some or all these services ourselves or to obtain substitute arrangements with third parties. We reimburse Emdeon under
agreed upon formulas that allocate to us a portion of Emdeons aggregate costs related to those services. However, the costs we are charged under the services agreement are not necessarily indicative of the costs that we would incur if we had to provide or contract for those services on a stand-alone basis. With respect to most of the services provided under the services agreement, we believe that it is likely that it would cost us more to provide or contract for them on our own because we benefit from Emdeons economies of scale as a larger corporation. In addition, we may be unable to provide some or all these services because of financial or other constraints or be unable to timely implement substitute arrangements on terms that are favorable to us, or at all, which could have an adverse effect on our business, financial condition and results of operations.