{"id":43295,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/asset-purchase-agreement-healtheon-corp-and-metis-llc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"asset-purchase-agreement-healtheon-corp-and-metis-llc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/asset-purchase-agreement-healtheon-corp-and-metis-llc.html","title":{"rendered":"Asset Purchase Agreement &#8211; Healtheon Corp. and Metis LLC"},"content":{"rendered":"<pre> \n                              ASSET PURCHASE AGREEMENT\n                                          \n                                    BY AND AMONG\n                                          \n                               HEALTHEON CORPORATION\n                                          \n                              METIS ACQUISITION CORP.\n                                          \n                                        AND\n                                          \n                                     METIS, LLC\n                                          \n                             DATED AS OF JUNE 25, 1998\n                                          \n\n\n\n\n                          TABLE OF CONTENTS\n\n                                                                 PAGE\n\nARTICLE I - THE ASSET PURCHASE . . . . . . . . . . . . . . . . . . 1\n\n     1.1  Purchase of Assets . . . . . . . . . . . . . . . . . . . 1\n     1.2  Retained Assets. . . . . . . . . . . . . . . . . . . . . 3\n     1.3  Assumed Liabilities. . . . . . . . . . . . . . . . . . . 3\n     1.4  Retained Liabilities . . . . . . . . . . . . . . . . . . 3\n     1.5  Purchase Price . . . . . . . . . . . . . . . . . . . . . 4\n     1.6  Cash Payment . . . . . . . . . . . . . . . . . . . . . . 4\n     1.7  Closing. . . . . . . . . . . . . . . . . . . . . . . . . 4\n     1.8  Execution and Delivery of Documents of Title by the \n          Company; Further Assurances  . . . . . . . . . . . . . . 4\n     1.9  Tax Free Reorganization. . . . . . . . . . . . . . . . . 4\n\nARTICLE II - REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . 5\n\n     2.1  Organization of the Company. . . . . . . . . . . . . . . 5\n     2.2  Company Capital Structure. . . . . . . . . . . . . . . . 5\n     2.3  Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 5\n     2.4  Authority. . . . . . . . . . . . . . . . . . . . . . . . 5\n     2.5  Financial Statements . . . . . . . . . . . . . . . . . . 6\n     2.6  No Undisclosed Liabilities . . . . . . . . . . . . . . . 6\n     2.7  No Changes . . . . . . . . . . . . . . . . . . . . . . . 7\n     2.8  Tax and Other Returns and Reports. . . . . . . . . . . . 8\n     2.9  Restrictions on Business Activities. . . . . . . . . . . 9\n     2.10 Title to Properties; Absence of Liens and Encumbrances .10\n     2.11 Intellectual Property. . . . . . . . . . . . . . . . . .10\n     2.12 Agreements, Contracts and Commitments. . . . . . . . . .11\n     2.13 Interested Party Transactions. . . . . . . . . . . . . .13\n     2.14 Compliance with Laws . . . . . . . . . . . . . . . . . .13\n     2.15 Litigation . . . . . . . . . . . . . . . . . . . . . . .13\n     2.16 Insurance. . . . . . . . . . . . . . . . . . . . . . . .13\n     2.17 Minute Books . . . . . . . . . . . . . . . . . . . . . .13\n     2.18 Environmental Matters. . . . . . . . . . . . . . . . . .13\n     2.19 Brokers' and Finders' Fees; Third Party Expenses . . . .14\n     2.20 Employee Matters and Benefit Plans . . . . . . . . . . .14\n     2.21 Representations Complete . . . . . . . . . . . . . . . .17\nARTICLE III - REPRESENTATIONS AND WARRANTIES OF HEALTHEON \n     AND ACQUISITION SUB . . . . . . . . . . . . . . . . . . . . .17\n\n     3.1  Organization of Healtheon and Acquisition Sub. . . . . .17\n     3.2  Healtheon and Acquisition Sub Capital Structure. . . . .18\n     3.3  Subsidiaries . . . . . . . . . . . . . . . . . . . . . .18\n     3.4  Authority. . . . . . . . . . . . . . . . . . . . . . . .18\n\n\n                                       -i-\n\n\n\n                              TABLE OF CONTENTS\n                                 (CONTINUED)\n\n                                                                 PAGE\n\n     3.5  Financial Statements . . . . . . . . . . . . . . . . . .19\n     3.6  No Undisclosed Liabilities . . . . . . . . . . . . . . .19\n     3.7  No Changes . . . . . . . . . . . . . . . . . . . . . . .19\n     3.8  Tax and Other Returns and Reports. . . . . . . . . . . .21\n     3.9  Restrictions on Business Activities. . . . . . . . . . .22\n     3.10 Title to Properties; Absence of Liens and Encumbrances .22\n     3.11 Intellectual Property. . . . . . . . . . . . . . . . . .22\n     3.12 Agreements, Contracts and Commitments. . . . . . . . . .23\n     3.13 Interested Party Transactions. . . . . . . . . . . . . .24\n     3.14 Compliance with Laws . . . . . . . . . . . . . . . . . .25\n     3.15 Litigation . . . . . . . . . . . . . . . . . . . . . . .25\n     3.16 Insurance. . . . . . . . . . . . . . . . . . . . . . . .25\n     3.17 Minute Books . . . . . . . . . . . . . . . . . . . . . .25\n     3.18 Environmental Matters. . . . . . . . . . . . . . . . . .25\n     3.19 Brokers' and Finders' Fees; Third Party Expenses . . . .26\n     3.20 Employee Matters and Benefit Plans . . . . . . . . . . .26\n     3.21 Representations Complete . . . . . . . . . . . . . . . .28\n\nARTICLE IV - CONDUCT PRIOR TO THE CLOSING. . . . . . . . . . . . .29\n\n     4.1  Conduct of Business of the Company . . . . . . . . . . .29\n     4.2  No Company Solicitation. . . . . . . . . . . . . . . . .31\n\nARTICLE V - ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . .31\n\n     5.1  Company Member Approvals . . . . . . . . . . . . . . . .31\n     5.2  Access to Information. . . . . . . . . . . . . . . . . .32\n     5.3  Confidentiality. . . . . . . . . . . . . . . . . . . . .32\n     5.4  Expenses . . . . . . . . . . . . . . . . . . . . . . . .32\n     5.5  Public Disclosure. . . . . . . . . . . . . . . . . . . .32\n     5.6  Consents . . . . . . . . . . . . . . . . . . . . . . . .33\n     5.7  Reasonable Efforts . . . . . . . . . . . . . . . . . . .33\n     5.8  Notification of Certain Matters. . . . . . . . . . . . .33\n     5.9  Certain Benefit Plans. . . . . . . . . . . . . . . . . .33\n     5.10 Additional Documents and Further Assurances. . . . . . .33\n     5.11 Company's Auditors . . . . . . . . . . . . . . . . . . .33\n     5.12 Mutual Release . . . . . . . . . . . . . . . . . . . . .33\n\nARTICLE VI - CONDITIONS TO THE ASSET PURCHASE. . . . . . . . . . .34\n\n     6.1  Conditions to Obligations of Each Party to Effect \n          the Asset Purchase . . . . . . . . . . . . . . . . . . .34\n     6.2  Additional Conditions to Obligations of the Company. . .34\n     6.3  Additional Conditions to the Obligations of Healtheon \n          and Acquisition Sub. . . . . . . . . . . . . . . . . . .35\n\n\n                                       -ii-\n\n\n\n\n                              TABLE OF CONTENTS\n                                 (CONTINUED)\n\n                                                                 PAGE\n\nARTICLE VII - SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ESCROW .36\n\n     7.1  Survival of Representations and Warranties . . . . . . .36\n     7.2  Escrow Arrangements and Indemnification. . . . . . . . .37\n     7.3  Indemnification by Healtheon and Acquisition Sub . . . .42\n\nARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER . . . . . . . . .43\n\n     8.1  Termination. . . . . . . . . . . . . . . . . . . . . . .43\n     8.2  Effect of Termination. . . . . . . . . . . . . . . . . .44\n     8.3  Amendment. . . . . . . . . . . . . . . . . . . . . . . .44\n     8.4  Extension; Waiver. . . . . . . . . . . . . . . . . . . .44\n\nARTICLE IX - GENERAL PROVISIONS. . . . . . . . . . . . . . . . . .44\n\n     9.1  Notices. . . . . . . . . . . . . . . . . . . . . . . . .44\n     9.2  Interpretation . . . . . . . . . . . . . . . . . . . . .45\n     9.3  Counterparts . . . . . . . . . . . . . . . . . . . . . .45\n     9.4  Transfer Taxes . . . . . . . . . . . . . . . . . . . . .45\n     9.5  Entire Agreement; Assignment . . . . . . . . . . . . . .46\n     9.6  Severability . . . . . . . . . . . . . . . . . . . . . .46\n     9.7  Other Remedies . . . . . . . . . . . . . . . . . . . . .46\n     9.8  Governing Law. . . . . . . . . . . . . . . . . . . . . .46\n     9.9  Rules of Construction. . . . . . . . . . . . . . . . . .46\n     9.10 Specific Performance . . . . . . . . . . . . . . . . . .46\n\n\n\n\n                                       -iii-\n\n\n\n\n                          INDEX OF EXHIBITS\n\n\nEXHIBIT                   DESCRIPTION\n\nExhibit A      Assignment and Assumption Agreement\n\nExhibit B      Bill of Sale\n\nExhibit C      Legal Opinion of Counsel to Healtheon\n\nExhibit D      Legal Opinion of Counsel to the Company\n\nExhibit E      Noncompetition Agreement\n\n\n                         INDEX OF SCHEDULES\n\n\nSchedule       Description\n\n\n                                      -iv-\n\n\n\n\n                               ASSET PURCHASE AGREEMENT\n\n\n     This ASSET PURCHASE AGREEMENT (this \"AGREEMENT\") is made and entered \ninto as of June 25, 1998 among Healtheon Corporation, a Delaware corporation \n(\"HEALTHEON\"), Metis Acquisition Corp., a Delaware corporation and a \nwholly-owned subsidiary of Healtheon (\"ACQUISITION SUB\"), Metis, LLC, a \nCalifornia limited liability company (the \"COMPANY\"), and, with respect to \nArticle VII, Edward J. Fotsch, M.D., as Securityholder Agent and U.S. Bank \nTrust National Association, as Escrow Agent.  \n\n                                       RECITALS\n\n     A.     The Boards of Directors of each of the Company, Healtheon and \nAcquisition Sub believe it is in the best interests of each organization and \ntheir respective securityholders that Healtheon acquire certain assets and \nassume certain liabilities of the Company  (the \"ASSET PURCHASE\") and, in \nfurtherance thereof, have approved the Asset Purchase.\n\n     B.     A portion of the shares of Healtheon Common Stock otherwise \nissuable by Healtheon in connection with the Asset Purchase shall be placed \nin escrow by Healtheon, the release of which amount shall be contingent upon \ncertain events and conditions, all as set forth in Article VII hereof.\n\n     C.     The Company, Healtheon and Acquisition Sub desire to make certain \nrepresentations and warranties and other agreements in connection with the \nAsset Purchase.\n\n     NOW, THEREFORE, in consideration of the covenants, promises and \nrepresentations set forth herein, and for other good and valuable \nconsideration, intending to be legally bound hereby the parties agree as \nfollows:\n\n                                      ARTICLE I\n\n                                  THE ASSET PURCHASE\n\n     1.1    PURCHASE OF ASSETS.  Upon the terms and subject to the conditions \ncontained in this Agreement, at the Closing (as defined in Section 2.7 \nbelow), the Company shall sell, assign, transfer and convey to Buyer, and \nBuyer shall purchase, acquire and accept from the Company, the assets \ncomprising the Healthcare Internet\/Intranet business of the Company (the \n\"Business\"), including all of the Company's assets of every kind and \ndescription relating to the Business  (other than those assets included in \nthe Retained Assets as defined in Section 2.2 below) (the \"Purchased \nAssets\"), and subject only to the liabilities and obligations of the Company \nwhich are defined in Section 2.3 (the \"Assumed Liabilities\").  The Purchased \nAssets include, without limitation, the following assets and properties \n(other than those assets included in the Retained Assets as defined in \nSection 2.2):\n\n            (a)    all trade and other accounts receivable and other \nIndebtedness owing to the Company with respect to the Business and including \nthe benefit of all collateral, security, guaranties, and similar undertakings \nreceived or held in connection therewith (the \"Accounts Receivable\"); \n\n            (b)    all inventories with respect to the Business wherever \nlocated, including raw materials, goods consigned to vendors or \nsubcontractors, work in process, finished goods and goods in transit;\n\n\n                                       \n\n\n\n\n            (c)    all prepaid expenses, deposits and rights to refunds from \ncustomers and suppliers with respect to the Business;\n\n            (d)    all machinery, equipment, fixtures and furniture used in \nthe Business and identified on Schedule 1.1\n\n            (e)    all motor vehicles;\n\n            (f)    all supplies owned by the Company;\n\n            (g)    all rights and interests of the Company in and to any \nleases, subleases, licenses, loan agreements, mortgages, notes, indentures, \nrestrictions, wills, trusts, commitment obligations or other contracts, \nagreements or instruments, whether written or oral or other similar \nagreements (\"Contracts\"), and rights thereunder, including without \nlimitation, the designated Contracts relating to the Company set forth on \nSchedule 2.12 including contracts for the purchase of materials, supplies and \nservices and the sale of products and services, equipment leases, and any \nother contract of the Company relating to the Business; \n\n            (h)    all business and financial records, books, ledgers, files, \nplans, documents, correspondence, lists, plots, architectural plans, \ndrawings, notebooks, specifications, creative materials, advertising and \npromotional materials, marketing materials, studies, reports, equipment \nrepair, maintenance or service records of the Company, whether written or \nelectronically stored or otherwise recorded in each case, relating to the \nBusiness;\n\n            (i)    all of the Company's goodwill, dealer and customer lists \nand all other sales and marketing information, and all knowhow, technology, \ndrawings, engineering specifications, bills of materials, software and other \nintangible assets of the Company in each case, relating to the Business;\n\n            (j)    all patents, patent applications, copyrights, trademarks, \nservice marks, trade names, trade secrets, proprietary information, \ntechnology rights and licenses, proprietary rights and processes, know-how, \nresearch and development in progress, and any and all other intellectual \nproperty including, without limitation, the Company Intellectual Property \nRights, the Company's name, all things authored, discovered, developed, made, \nperfected, improved, designed, engineered, devised, acquired, produced, \nconceived or first reduced to practice and that pertain to or are used in the \nBusiness or that are relevant to an understanding or to the development of \nthe Business or to the performance by the products of the Business of their \nintended functions or purposes, whether tangible or intangible, in any stage \nof development, including without limitation, enhancements, designs, \ntechnology, improvements, inventions, works or authorship, formulas, \nprocesses, routines, subroutines, techniques, concepts, object code, flow \ncharts, diagrams, coding sheets, source code, listings and annotations, \nprogrammers' notes, information, work papers, work product and other \nmaterials or any types whatsoever, and all rights of any kind in or to any of \nthe foregoing including all goodwill associated therewith, licenses and \nsublicenses granted and obtained with respect thereto, and rights thereunder, \nremedies against infringements thereof, and rights to protection of interests \ntherein under the laws of all jurisdictions;\n\n            (k)    all permits, licenses, orders, ratings and approvals of \nall federal, state, local or foreign governmental or regulatory authorities \nor industrial bodies that are held by the Company and relate to the Business, \nto the extent the same are transferable;\n\n\n\n                                       -2-\n\n\n\n\n            (l)    all rights of the Company to causes of action, lawsuits, \njudgments, claims and demands of any nature which would relate to the \nBusiness or constitute counterclaims, rights of setoff, and affirmative \ndefenses to any claims brought against Buyer by third parties relating to the \nBusiness;\n\n            (m)    all present and future insurance proceeds which may be \npayable under the insurance policies listed on Schedule 2.16 attached hereto \nto the extent that such proceeds relate to the future loss of asset value of \nthe Purchased Assets;\n\n            (n)    except for Retained Assets described in Section 1.2 below, \nall other items of property, real or personal, tangible or intangible, \nincluding, without limitation, all restrictive and negative covenant \nagreements with employees and others, including, without limitation, \nnondisclosure agreements, computer programs, tapes, discs and timesharing \nfiles, owned, used by or accruing to the benefit of the Company in each case, \nused in the Business; and\n\n            (o)    Intellectual property and associated html code that is \ntransferable by the Company, as well as the exclusive rights to operate the \nCompany's website located at www.metisllc.com.\n\n     1.2    RETAINED ASSETS.  The Company will retain ownership of the assets \nof the Company listed on Schedule 1.2 attached hereto (collectively, the \n\"Retained Assets\").\n\n     1.3    ASSUMED LIABILITIES.  The Acquisition Sub shall assume and agree \nto pay, perform and discharge only the Assumed Liabilities, and will pay, \nperform and discharge the Assumed Liabilities as they become due.  The \nAssumed Liabilities shall consist of only those liabilities of the Company \nlisted on Schedule 1.3 attached hereto or otherwise specifically provided for \nin this Agreement.\n\n     1.4    RETAINED LIABILITIES.  The liabilities and obligations which \nshall be retained by the Company (the \"Retained Liabilities\") shall consist \nof all liabilities of the Company other than Assumed Liabilities, including, \nwithout limitation, the following:\n\n            (a)    all liabilities of the Company relating to indebtedness \nfor borrowed money;\n\n            (b)    all liabilities of the Company resulting from, \nconstituting or relating to a breach of any of the representations, \nwarranties, covenants or agreements of the Company under this Agreement in \naccordance with the indemnification provisions of this Agreement;\n\n            (c)    all liabilities of the Company for federal, state, local \nor foreign Taxes, including Taxes incurred in respect of or measured by the \nincome of the Company earned on or realized prior to the Closing Date, \nincluding any gain and income from the sale of the Purchased Assets and other \ntransactions contemplated herein;\n\n            (d)    all liabilities for all environmental, ecological, health \nor safety claims to the extent arising out of the operation of the Business \nor the Purchased Assets by the Company on or before the Closing Date;\n\n            (e)    all liabilities of the Company arising in connection with \nits operations unrelated to the Business except as otherwise specifically \nprovided in Schedule 1.3;\n\n            (f)    any liability of the Company based on its tortious or \nillegal conduct;\n\n\n                                       -3-\n\n\n\n\n            (g)    any liability or obligation incurred by the Company in \nconnection with the negotiation, execution or performance of this Agreement \nand the transactions contemplated hereby, including, without limitation, all \nlegal, accounting, brokers', finders' and other professional fees and \nexpenses other than through Healtheon's or Acquisition Sub's breach of this \nAgreement;\n\n            (h)    any liability or obligation incurred by the Company in \nconnection with the negotiation, execution or performance of, and settlement \nof any claims pertaining to, the Netsource Agreement (as defined herein) and \nthe transactions contemplated thereby, including, without limitation, all \nlegal, accounting, brokers', finders' and other professional fees and \nexpenses; and\n\n            (i)    all liabilities incurred by the Company after the Closing \nDate other than through Healtheon's or Acquisition Sub's breach of this \nAgreement (except to the extent such liability is specifically assumed by \nAcquisition Sub); and\n\n     1.5    PURCHASE PRICE.  Upon the terms and subject to the conditions \ncontained in this Agreement, in reliance upon the representations, warranties \nand agreements of the Company contained herein, and in consideration of the \nsale, assignment, transfer and delivery of the Transferred Assets and  the \nNoncompetition Agreements received from the Company, Acquisition Sub will \nassume the Assumed Liabilities and Healtheon will deliver (a) (i) to the \nCompany, a stock certificate representing 1,400,000 shares of Healtheon \nCommon Stock, (ii) the Cash Payment, and (b) to the Escrow Agent, for the \nbenefit of the Company, a stock certificate representing 200,000 shares of \nHealtheon Common Stock (the \"Escrow Amount\").\n\n     1.6    CASH PAYMENT.  In the event that on the Closing Date, the Company \nshall have a cash balance that is less than $654,112, Healtheon shall pay to \nthe Company on the Closing Date, as additional consideration, an amount of \nmoney (the \"Cash Payment\") equal to (a)$654,112, LESS (b) such cash balance. \nNotwithstanding the foregoing, in the event that the Company shall have \nfailed to conduct its business in the ordinary course and in compliance with \nthe provisions of this Agreement, including without limitation, Section 4.1, \nan adjustment shall be made to the purchase price to reflect the extent to \nwhich the Company's cash and accounts receivable balance is less than \n$654,112 on the Closing Date. \n\n     1.7    CLOSING.  Unless this Agreement is earlier terminated pursuant to \nSection 8.1, the closing of the Merger (the \"CLOSING\") will take place as \npromptly as practicable, but no later than five (5) business days, following \nsatisfaction or waiver of the conditions set forth in Article VI, at the \noffices of Wilson Sonsini Goodrich &amp; Rosati (\"WSGR\"), 650 Page Mill Road, \nPalo Alto, California, unless another place or time is agreed to by Parent \nand the Company. The date upon which the Closing actually occurs is herein \nreferred to as the \"CLOSING DATE.\"  The parties currently intend that the \nClosing Date will occur on or prior to August 15, 1998.\n\n     1.8    EXECUTION AND DELIVERY OF DOCUMENTS OF TITLE BY THE COMPANY; \nFURTHER ASSURANCES.  At the Closing, the parties hereto shall have entered \ninto the Assignment and Assumption Agreement in the form attached hereto as \nExhibit A and the Company shall execute and deliver to Buyer the Bill of Sale \nin the form attached hereto as Exhibit B and such deeds, conveyances, bills \nof sale, certificates of title, assignments, assurances and other instruments \nand documents as Buyer may reasonably request in order to effect the sale, \nconveyance, and transfer of the Purchased Assets from the Company to the \nBuyer. Such instruments and documents shall be sufficient to convey to Buyer \ngood and merchantable title in all of the Purchased Assets.  The Company \nwill, from time to time after the Closing Date, take such additional actions \nand execute and deliver such further documents as Buyer may reasonably \nrequest in order more effectively to sell, transfer and convey the Purchased \nAssets to Buyer and to place Buyer in position to operate and control all of \nthe Purchased Assets.  To \n\n\n                                       -4-\n\n\n\n\nthe extent any of such assets are, by nature or terms, not transferrable, the \nCompany shall hold, provide, and make such assets available for the use and \nbenefit of Buyer as Buyer's agent.\n\n     1.9    TAX FREE REORGANIZATION.  The parties hereto intend that this \nAgreement shall constitute a plan of reorganization pursuant to the Section \n368(a)(1)(C) of the Internal Revenue Code of 1986, as amended, and agree to \nreport the transactions contemplated by this Agreement as such for all \npurposes. Each party has consulted with its own tax advisors as to the tax \nconsequences of the transactions contemplated by this Agreement and no party \nmakes any representation or warranty with respect to such consequences.   \n\n                                      ARTICLE II\n\n                    REPRESENTATIONS AND WARRANTIES OF THE COMPANY\n\n     The Company hereby represents and warrants to Healtheon and Acquisition \nSub, subject to such exceptions as are specifically disclosed in the \ndisclosure letter (referencing the appropriate section number or subsection, \nas the case may be) supplied by the Company to Healtheon (the \"COMPANY \nSCHEDULES\") and dated as of the date hereof, as follows:\n\n     2.1    ORGANIZATION OF THE COMPANY.  The Company is a limited liability \ncompany duly organized, validly existing and in good standing under the laws \nof the State of California.  The Company has the power to own its properties \nand to carry on its business as now being conducted.  The Company is duly \nqualified to do business and in good standing as a foreign limited liability \ncompany in each jurisdiction in which the failure to be so qualified would \nhave a material adverse effect on the business, assets (including intangible \nassets), financial condition or results of operations of the Company \n(hereinafter referred to as a \"COMPANY MATERIAL ADVERSE EFFECT\").  The \nCompany has delivered a true and correct copy of its Organizational \nDocuments, each as amended to date, to Healtheon.\n\n     2.2    COMPANY CAPITAL STRUCTURE.\n\n            (a)    The authorized capitalization of the Company consists of \n183,050 authorized Class A units (the \"Class A units\"), of which 183,050 \nunits are issued and outstanding, and 300,000 authorized Class B units (the \n\"Class B units\", and together with the Class A units, the Company Capital \nStock), of which 225,123 units are issued and outstanding.  The Company \nCapital Stock is held of record by the persons, with the addresses of record \nand in the amounts set forth on Schedule 2.2(a).  With respect to each holder \nof Class B Units, Schedule 2.2(a) contains an identification of each such \nholder's vesting provisions and vesting start date.  All outstanding Company \nCapital Stock is duly authorized, validly issued, fully paid and \nnon-assessable and not subject to preemptive rights created by statute, the \nFirst Amended and Restated Operating Agreement of Metis, LLC and the Articles \nof Organization (together, the \"Organizational Documents) of the Company or \nany agreement to which the Company is a party or by which it is bound.  All \nof the Company Capital Stock has been issued in compliance with the terms of \nthe Company's Organizational Documents.\n\n            (b)    There are no options, warrants, calls, rights, commitments \nor agreements of any character, written or oral, to which the Company is a \nparty or by which it is bound obligating the Company to issue, deliver, sell, \nrepurchase or redeem, or cause to be issued, delivered, sold, repurchased or \nredeemed, any ownership interests of the Company (each, a \"Company Capital \nStock Equivalent\") or obligating the Company \n\n\n                                       -5-\n\n\n\n\nto grant, extend, accelerate the vesting of, change the price of, otherwise \namend or enter into any such Company Common Stock Equivalent.\n\n     2.3    SUBSIDIARIES.  The Company does not have and has never had any \nsubsidiaries or affiliated organizations and does not otherwise own and has \nnever otherwise owned any shares of capital stock or any interest in, or \ncontrol, directly or indirectly, any other corporation, partnership, limited \nliability company, association, joint venture or other business entity.\n     \n     2.4    AUTHORITY.  Subject only to the requisite approval of the Asset \nPurchase and this Agreement by the Company's Members, the Company has all \nrequisite corporate power and authority to enter into this Agreement and to \nconsummate the transactions contemplated hereby.  The vote required of the \nCompany's Members to duly approve the Asset Purchase and this Agreement is a \nMajority in Interest of the Members (as defined in the Organizational \nDocuments) and a Majority in Interest of the Class A Members (as defined in \nthe Organizational Documents).  The execution and delivery of this Agreement \nand the consummation of the transactions contemplated hereby have been duly \nauthorized by all necessary action on the part of the Company, subject only \nto the approval of the Asset Purchase by the Company's Members.  The \nCompany's Board of Directors has unanimously approved the Asset Purchase and \nthis Agreement.  This Agreement has been duly executed and delivered by the \nCompany and constitutes the valid and binding obligation of the Company, \nenforceable in accordance with its terms.  Except as set forth on Schedule \n2.4, subject only to the approval of the Asset Purchase and this Agreement by \nthe Company's Members, the execution and delivery of this Agreement by the \nCompany does not, and, as of the Closing, the consummation of the \ntransactions contemplated hereby (including the Asset Purchase) will not, \nconflict with, or result in any violation of, or default under (with or \nwithout notice or lapse of time, or both), or give rise to a right of \ntermination, cancellation or acceleration of any obligation or loss of any \nbenefit under (any such event, a \"COMPANY CONFLICT\") (i) any provision of the \nOrganizational Documents of the Company or (ii) any mortgage, indenture, \nlease, Contract or other agreement or instrument, permit, concession, \nfranchise, license, judgment, order, decree, statute, law, ordinance, rule or \nregulation applicable to the Company or its properties or assets.  No \nconsent, waiver, approval, order or authorization of, or registration, \ndeclaration or filing with, any court, administrative agency or commission or \nother federal, state, county, local or foreign governmental authority, \ninstrumentality, agency or commission (\"GOVERNMENTAL ENTITY\") or any third \nparty (so as not to trigger any Company Conflict) is required by or with \nrespect to the Company in connection with the execution and delivery of this \nAgreement or the consummation of the transactions contemplated hereby, except \nfor (i) such consents, waivers, approvals, orders, authorizations, \nregistrations, declarations and filings as may be required under applicable \nfederal and state securities laws and (ii) such other consents, waivers, \nauthorizations, filings, approvals and registrations which are set forth on \nSchedule 2.4.\n\n     2.5    FINANCIAL STATEMENTS.  Section 2.5 sets forth the Company's \naudited balance sheets as of December 31, 1997 and the related audited \nstatement of income and cash flow for the period from inception to December \n31, 1997 (the \"COMPANY AUDITED FINANCIALS\") and the Company's unaudited \nbalance sheet as of May 31, 1998 and the related unaudited statements of \nincome and cash flow for the five months then ended (the \"COMPANY UNAUDITED \nFINANCIALS\") (collectively, such financial statements are sometimes referred \nto herein as \"COMPANY FINANCIAL STATEMENTS\").  The Company Audited Financials \nand the Company Unaudited Financials are correct in all material respects and \nhave been prepared in accordance with GAAP applied on a basis consistent \nthroughout the periods indicated and consistent with each other (except that \nthe Company Unaudited Financials do not contain all the notes that may be \nrequired by GAAP).  The Company Audited Financials and Company Unaudited \nFinancials present fairly the financial condition, operating results and cash \nflows of the Company as of the dates and during the periods indicated \ntherein, subject in the case of the Company Unaudited Financials, \n\n\n\n                                       -6-\n\n\n\n\nto normal year-end adjustments, which will not be material in amount or \nsignificance.  The Company's unaudited balance sheet dated as of May 31, 1998 \nshall be referred to as the \"COMPANY CURRENT BALANCE SHEET\". The Company's \ncash and accounts receivable balance as of May 15, 1998 was $654,112, and the \nCompany's accounts receivable are fully collectible.  Since December 31, \n1997, the Company has not changed its methodology for valuation of accounts \nreceivable.  \n\n     2.6    NO UNDISCLOSED LIABILITIES.  Except as set forth in Schedule 2.6, \nthe Company does not have any liability, indebtedness, obligation, expense, \nclaim, deficiency, guaranty or endorsement of any type,  whether accrued, \nabsolute, contingent, matured, unmatured or other (whether or not required to \nbe reflected in financial statements in accordance with generally accepted \naccounting principles), which individually or in the aggregate, (i) has not \nbeen reflected in the Company Current Balance Sheet, or (ii) has not arisen \nin the ordinary course of the Company's business since the date of the \nCompany Current Balance Sheet, consistent with past practices.\n\n     2.7    NO CHANGES.  Except as set forth in Schedule 2.7, since the date \nof the Company Current Balance Sheet, there has not been, occurred or arisen \nany:\n\n            (a)    transaction by the Company except in the ordinary course \nof business as conducted as of the date of the Company Current Balance Sheet \nand consistent with past practices;\n\n            (b)    amendments or changes to the Organizational Documents of \nthe Company;\n\n            (c)    capital expenditure or commitment by the Company, either \nindividually or in the aggregate, exceeding $25,000;\n\n            (d)    destruction of, damage to or loss of any material assets, \nbusiness or customer of the Company (whether or not covered by insurance);\n\n            (e)    labor trouble or claim of wrongful discharge or other \nunlawful labor practice or action;\n\n            (f)    change in accounting methods or practices (including any \nchange in depreciation or amortization policies or rates) by the Company;\n\n            (g)    revaluation by the Company of any of its assets;\n\n            (h)    declaration, setting aside or payment of a dividend or \nother distribution with respect to any units of the Company, or any direct or \nindirect redemption, purchase or other acquisition by the Company of any of \nits units;\n\n            (i)    increase in the salary or other compensation payable or to \nbecome payable to any of its officers, directors, employees or advisors, or \nthe declaration, payment or commitment or obligation of any kind for the \npayment of a bonus or other additional salary or compensation to any such \nperson except as otherwise contemplated by this Agreement;\n\n            (j)    sale, lease, license or other disposition of any of the \nassets or properties of the Company, except in the ordinary course of \nbusiness as conducted on that date and consistent with past practices;\n\n\n\n                                       -7-\n\n\n\n\n            (k)    any Lien placed on any of the Transferred Assets which \nremains in existence on the date hereof;\n\n            (l)    amendment or termination of any material contract, \nagreement or license to which the Company is a party or by which it is bound;\n\n            (m)    loan by the Company to any person or entity, the \nincurrence by the Company of any indebtedness, the guaranty by the Company of \nany indebtedness, issuance or sale of any debt securities of the Company or \nthe guaranty of any debt securities of others, except for advances to \nemployees for travel and business expenses in the ordinary course of \nbusiness, consistent with past practices;\n\n            (n)    waiver or release of any right or claim of the Company, \nincluding any write-off or other compromise of any account receivable of the \nCompany;\n\n            (o)    any contingent liabilities incurred by the Company with \nrespect to the obligations of any other person that would be assumed \nhereunder;\n\n            (p)    commencement or notice or threat of commencement of any \nlawsuit or proceeding against or investigation of the Company or its affairs;\n\n            (q)    notice of any claim of ownership by a third party of the \nCompany's Intellectual Property (as defined in Section 2.11 below) or of \ninfringement by the Company of any third party's Intellectual Property rights;\n\n            (r)    issuance or sale by the Company of any of its shares of \ncapital stock, or securities exchangeable, convertible or exercisable \ntherefor, or of any other of its securities;\n\n            (s)    change in pricing or royalties set or charged by the \nCompany to its customers or licensees or in pricing or royalties set or \ncharged by persons who have licensed Intellectual Property to the Company;\n\n            (t)    event or condition of any character that has or could be \nreasonably expected to have a Company Material Adverse Effect on the Company; \nor\n\n            (u)    any postponement or delay in payment of any accounts \npayable or other liability of the Company that will be included as Assumed \nLiabilities;\n\n            (v)    negotiation or agreement by the Company or any officer or \nemployees thereof to do any of the things described in the preceding clauses \n(a) through (r) (other than negotiations with Healtheon and its \nrepresentatives regarding the transactions contemplated by this Agreement).\n\n     2.8    TAX AND OTHER RETURNS AND REPORTS.\n\n            (a)    DEFINITION OF TAXES.  For the purposes of this Agreement, \n\"TAX\" or, collectively, \"TAXES\", means any and all federal, state, local and \nforeign taxes, assessments and other governmental charges, duties, \nimpositions and liabilities, including taxes based upon or measured by gross \nreceipts, income, profits, sales, use and occupation, and value added, ad \nvalorem, transfer, franchise, withholding, payroll, recapture, employment, \nexcise and property taxes, together with all interest, penalties and \nadditions imposed with respect to such amounts \n\n\n                                       -8-\n\n\n\n\nand any obligations under any agreements or arrangements with any other \nperson with respect to such amounts and including any liability for taxes of \na predecessor entity.\n\n            (b)    TAX RETURNS AND AUDITS.  Except as set forth in Schedule 2.8:\n\n                   (i)    The Company as of the Closing will have prepared \nand filed all required federal, state, local and foreign returns, estimates, \ninformation statements and reports (\"RETURNS\") relating to any and all Taxes \nconcerning or attributable to the Company or its operations and such Returns \nare true and correct and have been completed in accordance with applicable \nlaw.\n\n                   (ii)   The Company as of the Closing:  (A) will have paid \nor accrued all Taxes it is required to pay or accrue and (B) will have \nwithheld with respect to its employees all federal and state income taxes, \nFICA, FUTA and other Taxes required to be withheld.\n\n                   (iii)  The Company has not been delinquent in the payment \nof any Tax nor is there any Tax deficiency outstanding, proposed or assessed \nagainst the Company, nor has the Company executed any waiver of any statute \nof limitations on or extending the period for the assessment or collection of \nany Tax.\n\n                   (iv)   No audit or other examination of any Return of the \nCompany is currently in progress, nor has the Company been notified of any \nrequest for such an audit or other examination.\n\n                   (v)    The Company does not have any liabilities for \nunpaid federal, state, local and foreign Taxes which have not been accrued or \nreserved against on the Company Current Balance Sheet, whether asserted or \nunasserted, contingent or otherwise, and the Company has no knowledge of any \nbasis for the assertion of any such liability attributable to the Company, \nits assets or operations.\n\n                   (vi)   The Company has made available to Healtheon copies \nof all federal and state income and all state sales and use Tax Returns for \nall periods since the date of Company's incorporation.\n\n                   (vii)  There are (and as of immediately following the \nEffective Date there will be) no liens, pledges, charges, claims, security \ninterests or other encumbrances of any sort (\"LIENS\") on the assets of the \nCompany relating to or attributable to Taxes.\n\n                   (viii) The Company has no knowledge of any basis for the \nassertion of any claim relating or attributable to Taxes which, if adversely \ndetermined, would result in any Lien on the assets of the Company.\n\n                   (ix)   None of the Company's assets are treated as \n\"tax-exempt use property\" within the meaning of Section 168(h) of the Code.\n\n                   (x)    As of the Closing, there will not be any contract, \nagreement, plan or arrangement, including but not limited to the provisions \nof this Agreement, covering any employee or former employee of the Company \nthat, individually or collectively, could give rise to the payment of any \namount that would not be deductible pursuant to Section 280G or 162 of the \nCode.\n\n\n                                       -9-\n\n\n\n\n                   (xi)   The Company has not filed any consent agreement \nunder Section 341(f) of the Code or agreed to have Section 341(f)(2) of the \nCode apply to any disposition of a subsection (f) asset (as defined in \nSection 341(f)(4) of the Code) owned by the Company.\n\n                   (xii)  The Company is not a party to a tax sharing or \nallocation agreement nor does the Company owe any amount under any such \nagreement.\n\n                   (xiii) The Company is not, and has not been at any time, a \n\"United States real property holding corporation\" within the meaning of \nSection 897(c)(2) of the Code.\n\n                   (xiv)  The Company's tax basis in its assets for purposes \nof determining its future amortization, depreciation and other federal income \ntax deductions is accurately reflected on the Company's tax books and records.\n\n     2.9    RESTRICTIONS ON BUSINESS ACTIVITIES.  There is no agreement \n(noncompete or otherwise), commitment, judgment, injunction, order or decree \nto which the Company is a party or otherwise binding upon the Company which \nhas or reasonably could be expected to have the effect of prohibiting or \nimpairing the ability of Acquisition Sub to operate the Business after the \nClosing Date, any acquisition of property (tangible or intangible) by the \nCompany or the conduct of the Business.  Without limiting the foregoing, the \nCompany has not entered into any agreement under which the Company is \nrestricted from selling, licensing or otherwise distributing any of its \nproducts to any class of customers, in any geographic area, during any period \nof time or in any segment of the market that would be applicable to the \nBusiness after the Closing Date.\n\n     2.10   TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.\n\n            (a)    The Company owns no real property, nor has it ever owned \nany real property.  Schedule 2.10(a) sets forth a list of all real property \ncurrently, or at any time in the past, leased by the Company, the name of the \nlessor, the date of the lease and each amendment thereto and, with respect to \nany current lease, the aggregate annual rental and\/or other fees payable \nunder any such lease and any security interest in the Company's assets \ncreated by such lease.  All such current leases are in full force and effect, \nare valid and effective in accordance with their respective terms, and there \nis not, under any of such leases, any existing default or event of default \n(or event which with notice or lapse of time, or both, would constitute a \ndefault).  All such current leases will be assigned by the Company to \nAcquisition Sub as of the Closing Date.\n\n            (b)    The Company has good and valid title to, or, in the case \nof leased properties and assets, valid leasehold interests in, all of the \nPurchased Assets, real, personal and mixed, used or held for use in the \nBusiness, free and clear of any Liens (as defined in Section 2.8(b)(vii)), \nexcept as reflected in the Company Financial Statements or in Schedule \n2.10(b) and except for liens for taxes not yet due and payable and such \nimperfections of title and encumbrances, if any, which are not material in \ncharacter, amount or extent, and which do not materially detract from the \nvalue, or materially interfere with the present use, of the property subject \nthereto or affected thereby.\n\n     2.11   INTELLECTUAL PROPERTY.\n\n            (a)    The Company owns, or is licensed or otherwise possesses \nlegally enforceable rights to use, all patents, trademarks, trade names, \nservice marks, copyrights, and any applications therefor, maskworks, net \nlists, schematics, technology, know-how, computer software programs or \napplications (in both source code \n\n\n                                       -10-\n\n\n\n\nand object code form), and tangible or intangible proprietary information or \nmaterial that are used in the Business as currently conducted and as proposed \nto be conducted by the Company (the \"COMPANY INTELLECTUAL PROPERTY \nRIGHT(S)\").  Schedule 2.11(a) sets forth a complete list of all patents, \nregistered and material unregistered trademarks, registered copyrights, trade \nnames and service marks, and any applications therefor, included in the \nCompany Intellectual Property Rights, and specifies, where applicable, the \njurisdictions in which each such Company Intellectual Property Right has been \nissued or registered or in which an application for such issuance and \nregistration has been filed, including the respective registration or \napplication numbers and the names of all registered owners. \n\n            (b)    Schedule 2.11(b) sets forth a complete list of all \nlicenses, sublicenses and other agreements as to which the Company is a party \nand pursuant to which the Company or any other person is authorized to use \nany Company Intellectual Property Right (excluding object code end-user \nlicenses granted to end-users in the ordinary course of business that permit \nuse of software products without a right to modify, distribute or sublicense \nthe same (\"END-USER LICENSES\")) or trade secret of the Company, and includes \nthe identity of all parties thereto, a description of the nature and subject \nmatter thereof, the applicable royalty or other fees and the term thereof.  \nEach license, sublicense and other agreement will be transferred or assigned \nto Acquisition Sub as of and effective upon the Closing.  The execution and \ndelivery of this Agreement by the Company, and the consummation of the \ntransactions contemplated hereby, including, without limitation, the transfer \nor assignment of the Company Intellectual Property Rights, will neither cause \nthe Company to be in violation or default under any such license, sublicense \nor agreement, nor entitle any other party to any such license, sublicense or \nagreement to terminate or modify such license, sublicense or agreement.  \nExcept as set forth in Schedules 2.11(a) or 2.11(b), the Company is the sole \nand exclusive owner or licensee of, with all right, title and interest in and \nto (free and clear of any liens or encumbrances), the Company Intellectual \nProperty Rights, and has sole and exclusive rights (and is not contractually \nobligated to pay any compensation to any third party in respect thereof) to \nthe use thereof or the material covered thereby in connection with the \nservices or products in respect of which the Company Intellectual Property \nRights are being used.  \n\n            (c)    No claims with respect to the Company Intellectual \nProperty Rights have been asserted or are, to the Company's knowledge, \nthreatened by any person, nor are there any valid grounds for any claims, (i) \nto the effect that the manufacture, sale, licensing or use of any of the \nproducts of the Company infringes on any copyright, patent, trade mark, \nservice mark, trade secret or other proprietary right, (ii) against the use \nby the Company of any trademarks, service marks, trade names, trade secrets, \ncopyrights, maskworks, patents, technology, know-how or computer software \nprograms and applications used in the Business as currently conducted or as \nproposed to be conducted by the Company, or (iii) challenging the ownership \nby the Company, validity or effectiveness of any of the Company Intellectual \nProperty Rights.  All registered trademarks, service marks and copyrights \nheld by the Company are valid and subsisting.  The Company has not infringed, \nand the Business as currently conducted or as proposed to be conducted does \nnot infringe, any copyright, patent, trademark, service mark, trade secret or \nother  proprietary right of any third party. There is no material \nunauthorized use, infringement or misappropriation of any of the Company \nIntellectual Property Rights by any third party, including any employee or \nformer employee of the Company.  No Company Intellectual Property Right or \nproduct of the Company or any of its subsidiaries is subject to any \noutstanding decree, order, judgment, or stipulation restricting in any manner \nthe licensing thereof by the Company.  Each current and former employee, \nconsultant or contractor of the Company has executed a proprietary \ninformation and confidentiality agreement substantially in the Company's \nstandard forms. All software included in the Company Intellectual Property \nRights is original with the Company and has been either created by employees \nof the Company on a work-for-hire basis or by consultants or contractors who \nhave created such software themselves and have assigned all rights they may \nhave had in such software to the Company.\n\n\n                                       -11-\n\n\n\n\n     2.12   AGREEMENTS, CONTRACTS AND COMMITMENTS.  Except as set forth on \nSchedule 2.12(a), the Company does not have, is not a party to nor is it \nbound by, and neither Healtheon nor the Acquisition Sub will be bound, by \nvirtue of the transactions contemplated hereby, by:\n\n                   (i)    any collective bargaining agreements,\n\n                   (ii)   any agreements or arrangements that contain any \nseverance pay or post-employment liabilities or obligations,\n\n                   (iii)  any bonus, deferred compensation, pension, profit \nsharing or retirement plans, or any other employee benefit plans or \narrangements,\n\n                   (iv)   any employment or consulting agreement, contract or \ncommitment with an employee or individual consultant or salesperson or any \nconsulting or sales agreement, contract or commitment under which any firm or \nother organization provides services to the Company,\n\n                   (v)    any operating agreement or other agreement relating \nto the operations of any business organization, including the Company,\n\n                   (vi)   any agreement or plan, including, without \nlimitation, any stock option plan, stock appreciation rights plan or stock \npurchase plan, any of the benefits of which will be increased, or the vesting \nof benefits of which will be accelerated, by the occurrence of any of the \ntransactions contemplated by this Agreement or the value of any of the \nbenefits of which will be calculated on the basis of any of the transactions \ncontemplated by this Agreement,\n\n                   (vii)  any fidelity or surety bond or completion bond,\n\n                   (viii) any lease of personal property having a value \nindividually in excess of $15,000,\n\n                   (ix)   any agreement of indemnification or guaranty,\n\n                   (x)    any agreement, contract or commitment containing \nany covenant limiting the freedom of the Company to engage in any line of \nbusiness or to compete with any person,\n\n                   (xi)   any agreement, contract or commitment relating to \ncapital expenditures and involving future payments in excess of $15,000,\n\n                   (xii)  any agreement, contract or commitment relating to \nthe disposition or acquisition of assets or any interest in any business \nenterprise outside the ordinary course of the Company's business,\n\n                   (xiii) any mortgages, indentures, loans or credit \nagreements, security agreements or other agreements or instruments relating \nto the borrowing of money or extension of credit, including guaranties \nreferred to in clause (viii) hereof,\n\n                   (xiv)  any purchase order or contract for the purchase of \nraw materials involving $15,000 or more,\n\n\n                                       -12-\n\n\n\n\n                   (xv)   any construction contracts,\n\n                   (xvi)  any distribution, joint marketing or development \nagreement, \n\n                   (xvii) any agreement pursuant to which the Company has \ngranted or may grant in the future, to any party, a source-code license or \noption or other right to use or acquire source-code, or \n\n                   (xviii)       any other agreement, contract or commitment \nthat involves $15,000 or more or is not cancelable without penalty within \nthirty (30) days.\n\nExcept for such alleged breaches, violations and defaults, and events that \nwould constitute a breach, violation or default with the lapse of time, \ngiving of notice, or both, as are all noted in Schedule 2.12(b), the Company \nhas not breached, violated or defaulted under, or received notice that it has \nbreached, violated or defaulted under, any of the terms or conditions of any \nagreement, contract or commitment required to be set forth on Schedule \n2.12(a) or Schedule 2.11(b) (any such agreement, contract or commitment, a \n\"COMPANY CONTRACT\"). Each Company Contract is in full force and effect and, \nexcept as otherwise disclosed in Schedule 2.12(b), is not subject to any \ndefault thereunder of which the Company has knowledge by any party obligated \nto the Company pursuant thereto.\n\n     2.13   INTERESTED PARTY TRANSACTIONS.  Except as set forth on Schedule \n2.13, no officer, director or Member of the Company (nor any ancestor, \nsibling, descendant or spouse of any of such persons, or any trust, \npartnership or corporation in which any of such persons has or has had an \ninterest), has or has had, directly or indirectly, (i) an economic interest \nin any entity which furnished or sold, or furnishes or sells, services or \nproducts that the Company furnishes or sells, or proposes to furnish or sell, \n(ii) an economic interest in any entity that purchases from or sells or \nfurnishes to, the Company, any goods or services or (iii) a beneficial \ninterest in any contract or agreement set forth in Schedule 2.12(a) or \nSchedule 2.11(b); provided, that ownership of no more than one percent (1%) \nof the outstanding voting stock of a publicly traded corporation shall not be \ndeemed an \"economic interest in any entity\" for purposes of this Section \n2.13.  Except as disclosed on Schedule 2.13, all interested party \ntransactions were made on terms no more favorable to such interested party \nthan could have been obtained on an arms'-length basis.\n\n     2.14   COMPLIANCE WITH LAWS.  To the Company's knowledge, it has \ncomplied in all material respects with, is not in material violation of, and \nhas not received any notices of violation with respect to, any foreign, \nfederal, state or local statute, law or regulation.\n\n     2.15   LITIGATION.  Except as set forth in Schedule 2.15, there is no \naction, suit or proceeding of any nature pending or to the Company's \nknowledge threatened against the Company, its properties or any of its \nofficers or directors, in their respective capacities as such.  Except as set \nforth in Schedule 2.15, to the Company's knowledge, there is no investigation \npending or threatened against the Company, its properties or any of its \nofficers or directors (in their respective capacities as such) by or before \nany governmental entity.  Schedule 2.15 sets forth, with respect to any \npending or threatened action, suit, proceeding or investigation, the forum, \nthe parties thereto, the subject matter thereof and the amount of damages \nclaimed or other remedy requested.  No Governmental Entity has at any time \nchallenged or questioned the legal right of the Company to manufacture, offer \nor sell any of its products in the present manner or style thereof.\n\n\n                                       -13-\n\n\n\n\n     2.16   INSURANCE.  Set forth on Schedule 2.16 is a list of all of the \nCompany's insurance policies and fidelity bonds.  With respect to the \ninsurance policies and fidelity bonds covering the assets, business, \nequipment, properties, operations, employees, officers and directors of the \nCompany, there is no claim by the Company pending under any of such policies \nor bonds as to which coverage has been questioned, denied or disputed by the \nunderwriters of such policies or bonds.  All premiums due and payable under \nall such policies and bonds have been paid and the Company is otherwise in \nmaterial compliance with the terms of such policies and bonds (or other \npolicies and bonds providing substantially similar insurance coverage).  The \nCompany has no knowledge of any threatened termination of, or material \npremium increase with respect to, any of such policies.\n\n     2.17   MINUTE BOOKS.  The minute books of the Company made available to \ncounsel for Healtheon are the only minute books of the Company and contain a \nreasonably accurate summary of all meetings of directors (or committees \nthereof) and Members or actions by written consent since the time of \norganization of the Company.\n\n     2.18   ENVIRONMENTAL MATTERS.\n\n            (a)    HAZARDOUS MATERIAL.  The Company has not operated any \nunderground storage tanks, and has no knowledge of the existence, at any \ntime, of any underground storage tank (or related piping or pumps), at any \nproperty that the Company has at any time owned, operated, occupied or \nleased.  The Company has not released any amount of any substance that has \nbeen designated by any Governmental Entity or by applicable federal, state or \nlocal law to be radioactive, toxic, hazardous or otherwise a danger to health \nor the environment, including, without limitation, PCBs, asbestos, oil and \npetroleum products, urea-formaldehyde and all substances listed as a \n\"hazardous substance,\" \"hazardous waste,\" \"hazardous material\" or \"toxic \nsubstance\" or words of similar import, under any law, including but not \nlimited to, the Comprehensive Environmental Response, Compensation, and \nLiability Act of 1980, as amended; the Resource Conservation and Recovery Act \nof 1976, as amended; the Federal Water Pollution Control Act, as amended; the \nClean Air Act, as amended, and the regulations promulgated pursuant to said \nlaws, (a \"HAZARDOUS MATERIAL\"). No Hazardous Materials are present as a \nresult of the actions or omissions of the Company, or, to the Company's \nknowledge, as a result of any actions of any third party or otherwise, in, on \nor under any property, including the land and the improvements, ground water \nand surface water thereof, that the Company has at any time owned, operated, \noccupied or leased.\n\n            (b)    HAZARDOUS MATERIALS ACTIVITIES.  The Company has not \ntransported, stored, used, manufactured, disposed of, released or exposed its \nemployees or others to Hazardous Materials in violation of any law in effect \non or before the Closing Date, nor has the Company disposed of, transported, \nsold, or manufactured any product containing a Hazardous Material (any or all \nof the foregoing being collectively referred to as \"HAZARDOUS MATERIALS \nACTIVITIES\") in violation of any rule, regulation, treaty or statute \npromulgated by any Governmental Entity in effect prior to or as of the date \nhereof to prohibit, regulate or control Hazardous Materials or any Hazardous \nMaterial Activity.\n\n            (c)    PERMITS.  The Company currently holds all environmental \napprovals, permits, licenses, clearances and consents (the \"ENVIRONMENTAL \nPERMITS\") necessary for the conduct of the Company's Hazardous Material \nActivities and other businesses of the Company as such activities and \nbusinesses are currently being conducted.\n\n            (d)    ENVIRONMENTAL LIABILITIES.  No action, proceeding, \nrevocation proceeding, amendment, procedure, writ, injunction or claim is \npending, or to the Company's knowledge, threatened concerning any \nEnvironmental Permit, Hazardous Material or any Hazardous Materials Activity \nof the Company.  The Company \n\n\n                                       -14-\n\n\n\n\nis not aware of any fact or circumstance which could involve the Company in \nany environmental litigation or impose upon the Company any environmental \nliability.\n\n     2.19   BROKERS' AND FINDERS' FEES; THIRD PARTY EXPENSES.  Except as set \nforth on Schedule 2.19, the Company has not incurred, nor will it incur, \ndirectly or indirectly, any liability for brokerage or finders' fees, \ninvestment banking fees, consulting fees or agents' commissions or any \nsimilar charges in connection with this Agreement or any transaction \ncontemplated hereby. Schedule 2.19 sets forth the principal terms and \nconditions of any agreement, written or oral, with respect to such fees.  \nSchedule 2.19 also sets forth the Company's current reasonable estimate of \nall Company Third Party Expenses (as defined in Section 5.4) expected to be \nincurred by the Company in connection with the negotiation and effectuation \nof the terms and conditions of this Agreement and the transactions \ncontemplated hereby.\n\n     2.20   EMPLOYEE MATTERS AND BENEFIT PLANS.\n\n            (a)    DEFINITIONS.  With the exception of the definition of \n\"Affiliate\" set forth in Section 2.20(a)(i) below (which definition shall \napply only to this Section 2.20), for purposes of this section, the following \nterms shall have the meanings set forth below:\n\n                   (i)    \"COMPANY AFFILIATE\" shall mean any other person or \nentity under common control with the Company within the meaning of Section \n414(b), (c), (m) or (o) of the Code and the regulations thereunder;\n\n                   (ii)   \"ERISA\" shall mean the Employee Retirement Income \nSecurity Act of 1974, as amended;\n\n                   (iii)  \"COMPANY EMPLOYEE PLAN\" shall refer to any plan, \nprogram, policy, practice, contract, agreement or other arrangement providing \nfor compensation, severance, termination pay, performance awards, unit or \nunit related awards, fringe benefits or other employee benefits or \nremuneration of any kind, whether formal or informal, funded or unfunded and \nwhether or not legally binding, including without limitation, each \"employee \nbenefit plan\", within the meaning of Section 3(3) of ERISA which is or has \nbeen maintained, contributed to, or required to be contributed to, by the \nCompany or any Company Affiliate for the benefit of any \"Company Employee\" \n(as defined below), and pursuant to which the Company or any Company \nAffiliate has or may have any material liability contingent or otherwise;\n\n                   (iv)   \"COMPANY EMPLOYEE\" shall mean any current, former, \nor retired employee, officer, or director of the Company or any Company \nAffiliate;\n\n                   (v)    \"COMPANY EMPLOYEE AGREEMENT\" shall refer to each \nmanagement, employment, severance, consulting, relocation, repatriation, \nexpatriation, visas, work permit or similar agreement or contract between the \nCompany or any Affiliate and any Employee or consultant;\n\n                   (vi)   \"IRS\" shall mean the Internal Revenue Service;\n\n                   (vii)  \"MULTIEMPLOYER PLAN\" shall mean any \"Pension Plan\" \n(as defined below) which is a \"multiemployer plan\", as defined in Section \n3(37) of ERISA; and\n\n\n                                       -15-\n\n\n\n\n                   (viii) \"COMPANY PENSION PLAN\" shall refer to each Company \nEmployee Plan which is an \"employee pension benefit plan\", within the meaning \nof Section 3(2) of ERISA.\n\n            (b)    SCHEDULE.  Schedule 2.20(b) contains an accurate and \ncomplete list of each Company Employee Plan and each Company Employee \nAgreement, together with a schedule of all liabilities, whether or not \naccrued, under each such Company Employee Plan or Company Employee Agreement. \n The Company does not have any plan or commitment, whether legally binding or \nnot, to establish any new Company Employee Plan or Company Employee \nAgreement, to modify any Company Employee Plan or Company Employee Agreement \n(except to the extent required by law or to conform any such Company Employee \nPlan or Company Employee Agreement to the requirements of any applicable law, \nor as required by this Agreement), or to enter into any Company Employee Plan \nor Company Employee Agreement, nor does it have any intention or commitment \nto do any of the foregoing. \n\n            (c)    DOCUMENTS.  The Company has made available to Healtheon \n(i) correct and complete copies of all documents embodying or relating to \neach Company Employee Plan and each Company Employee Agreement including all \namendments thereto and written interpretations thereof; (ii) the most recent \nannual actuarial valuations, if any, prepared for each Company Employee Plan; \n(iii) the most recent annual report (Series 5500 and all schedules thereto), \nif any, required under ERISA or the Code in connection with each Company \nEmployee Plan or related trust; (iv) if the Company Employee Plan is funded, \nthe most recent annual and periodic accounting of Company Employee Plan \nassets; (v) the most recent summary plan description together with the most \nrecent summary of material modifications, if any, required under ERISA with \nrespect to each Company Employee Plan; (vi) all IRS determination letters and \nrulings relating to Company Employee Plans and copies of all applications and \ncorrespondence to or from the IRS or the Department of Labor (\"DOL\") with \nrespect to any Company Employee Plan; (vii) all communications material to \nany Company Employee or Company Employees relating to any Company Employee \nPlan and any proposed Company Employee Plans, in each case, relating to any \namendments, terminations, establishments, increases or decreases in benefits, \nacceleration of payments or vesting schedules or other events which would \nresult in any material liability to the Company; and (viii) all registration \nstatements and prospectuses prepared in connection with each Company Employee \nPlan.\n\n            (d)    EMPLOYEE PLAN COMPLIANCE.  Except as set forth on Schedule \n2.20(d), (i) the Company has performed in all material respects all \nobligations required to be performed by it under each Company Employee Plan, \nand each Company Employee Plan has been established and maintained in all \nmaterial respects in accordance with its terms and in compliance with all \napplicable laws, statutes, orders, rules and regulations, including but not \nlimited to ERISA or the Code; (ii) no \"prohibited transaction\", within the \nmeaning of Section 4975 of the Code or Section 406 of ERISA, has occurred \nwith respect to any Company Employee Plan; (iii) there are no actions, suits \nor claims pending, or, to the knowledge of the Company, threatened or \nanticipated (other than routine claims for benefits) against any Company \nEmployee Plan or against the assets of any Company Employee Plan; and (iv) \neach Company Employee Plan can be amended, terminated or otherwise \ndiscontinued after the Closing in accordance with its terms, without \nliability to the Company, Healtheon or any of its Affiliates (other than \nordinary administration expenses typically incurred in a termination event); \n(v) there are no inquiries or proceedings pending or, to the knowledge of the \nCompany or any affiliates, threatened by the IRS or DOL with respect to any \nCompany Employee Plan; and (vi) neither the Company nor any Affiliate is \nsubject to any penalty or tax with respect to any Company Employee Plan under \nSection 402(i) of ERISA or Section 4975 through 4980 of the Code.\n\n\n                                       -16-\n\n\n\n\n            (e)    PENSION PLANS.  The Company does not now, nor has it ever, \nmaintained, established, sponsored, participated in, or contributed to, any \nPension Plan which is subject to Part 3 of Subtitle B of Title I of ERISA, \nTitle IV of ERISA or Section 412 of the Code.\n\n            (f)    MULTIEMPLOYER PLANS.  At no time has the Company \ncontributed to or been requested to contribute to any Multiemployer Plan.\n\n            (g)    NO POST-EMPLOYMENT OBLIGATIONS.  Except as set forth in \nSchedule 2.20(g), no Company Employee Plan provides, or has any liability to \nprovide, life insurance, medical or other employee benefits to any Company \nEmployee upon his or her retirement or termination of employment for any \nreason, except as may be required by statute, and the Company has never \nrepresented, promised or contracted (whether in oral or written form) to any \nCompany Employee (either individually or to Company Employees as a group) \nthat such Company Employee(s) would be provided with life insurance, medical \nor other employee welfare benefits upon their retirement or termination of \nemployment, except to the extent required by statute.\n\n            (h)    EFFECT OF TRANSACTION.\n\n                   (i)    Except as set forth on Schedule 2.20(h)(i), the \nexecution of this Agreement and the consummation of the transactions \ncontemplated hereby will not (either alone or upon the occurrence of any \nadditional or subsequent events) constitute an event under any Company \nEmployee Plan, Company Employee Agreement, trust or loan that will or may \nresult in any payment (whether of severance pay or otherwise), acceleration, \nforgiveness of indebtedness, vesting, distribution, increase in benefits or \nobligation to fund benefits with respect to any Company Employee.\n\n                   (ii)   Except as set forth on Schedule 2.20(h)(ii), no \npayment or benefit which will or may be made by the Company or Healtheon or \nany of their respective affiliates with respect to any Employee will be \ncharacterized as an \"excess parachute payment\" within the meaning of Section \n280G(b)(1) of the Code.\n\n            (i)    EMPLOYMENT MATTERS.  The Company (i) to its knowledge, is \nin compliance in all material respects with all applicable foreign, federal, \nstate and local laws, rules and regulations respecting employment, employment \npractices, terms and conditions of employment and wages and hours, in each \ncase, with respect to Company Employees; (ii) has withheld all amounts \nrequired by law or by agreement to be withheld from the wages, salaries and \nother payments to Company Employees; (iii) is not liable for any arrears of \nwages or any taxes or any penalty for failure to comply with any of the \nforegoing; and (iv) is not liable for any payment to any trust or other fund \nor to any governmental or administrative authority, with respect to \nunemployment compensation benefits, social security or other benefits or \nobligations for Company Employees (other than routine payments to be made in \nthe normal course of business and consistent with past practice).\n\n            (j)    LABOR.  No work stoppage or labor strike against the \nCompany is pending or, to the best knowledge of the Company, threatened.  \nExcept as set forth in Schedule 2.20(j), the Company is not involved in or, \nto the knowledge of the Company, threatened with, any labor dispute, \ngrievance, or litigation relating to labor, safety or discrimination matters \ninvolving any Company Employee, including, without limitation, charges of \nunfair labor practices or discrimination complaints, which, if adversely \ndetermined, would, individually or in the aggregate, result in liability to \nthe Company.  Neither the Company nor any of its subsidiaries has engaged in \nany unfair labor practices within the meaning of the National Labor Relations \nAct which would, individually or in the aggregate, directly or indirectly \nresult in a liability to the Company.  Except as set forth in Schedule \n2.20(j), the Company is not presently, nor has it been in the past, a party \nto, or bound by, any collective \n\n\n                                      -17-\n\n\n\n\nbargaining agreement or union contract with respect to Company Employees and \nno collective bargaining agreement is being negotiated by the Company.\n\n     2.21   REPRESENTATIONS COMPLETE.  None of the representations or \nwarranties made by the Company (as modified by the Company Schedules), nor \nany statement made in any schedule or certificate furnished by the Company \npursuant to this Agreement, or furnished in or in connection with documents \nmailed or delivered to the shareholders of the Company in connection with \nsoliciting their consent to this Agreement and the Asset Purchase, contains \nor will contain at the Closing, any untrue statement of a material fact, or \nomits or will omit at the Closing to state any material fact necessary in \norder to make the statements contained herein or therein, in the light of the \ncircumstances under which made, not misleading.\n\n                                     ARTICLE III\n\n           REPRESENTATIONS AND WARRANTIES OF HEALTHEON AND ACQUISITION SUB\n\n     Healtheon and Acquisition Sub hereby represent and warrant to the \nCompany, subject to such exceptions as are specifically disclosed in the \ndisclosure letter (referencing the appropriate section number or subsection, \nas the case may be) supplied by the Healtheon and Acquisition Sub to the \nCompany (the \"HEALTHEON AND ACQUISITION SUB SCHEDULES\") and dated as of the \ndate hereof, as follows:\n\n     3.1    ORGANIZATION OF HEALTHEON AND ACQUISITION SUB.  Healtheon is a \ncorporation duly organized, validly existing and in good standing under the \nlaws of the State of Delaware.  Acquisition Sub is a corporation duly \norganized and in good standing under the laws of the State of Delaware.  \nHealtheon has the corporate power to own its properties and to carry on their \nbusiness as now being conducted.  Healtheon is duly qualified to do business \nand in good standing as a foreign corporation in each jurisdiction in which \nthe failure to be so qualified would have a material adverse effect on the \nbusiness, assets (including intangible assets), financial condition or \nresults of operations of Healtheon (hereinafter referred to as a \"HEALTHEON \nMATERIAL ADVERSE EFFECT\"). Healtheon has delivered a true and correct copy of \nits Certificate of Incorporation and Bylaws, each as amended to date, to the \nCompany.  Acquisition Sub has delivered a true and correct copy of its \nCertificate of Incorporation and Bylaws, each as amended to date, to the \nCompany.  \n\n     3.2    HEALTHEON AND ACQUISITION SUB CAPITAL STRUCTURE.\n\n            (a)    The authorized capital stock of Healtheon consists of \n75,000,000 shares of authorized Common Stock, of which 49,774,826 shares are \nissued and outstanding.  The shares of the capital stock of Healtheon are \nheld of record by the persons, with the addresses of record and in the \namounts set forth on Schedule 3.2(a).  All outstanding shares of Healtheon \ncapital stock are duly authorized, validly issued, fully paid and \nnon-assessable and not subject to preemptive rights created by statute, the \nCertificate of Incorporation or Bylaws of Healtheon or any agreement to which \nHealtheon is a party or by which it is bound.\n\n            (b)    The authorized capital stock of Acquisition Sub consists \nof 1,000 shares of authorized Common Stock, all of which are issued and \noutstanding and held of record by Healtheon.  All outstanding shares of the \ncapital stock of Acquisition Sub are duly authorized, validly issued, fully \npaid and non-assessable and not subject to preemptive rights created by \nstatute, the Certificate of Incorporation or Bylaws of Acquisition Sub or any \nagreement to which the Acquisition Sub is a party or by which it is bound.\n\n\n                                      -18-\n\n\n\n\n            (c)    Healtheon has reserved 10,000,000 shares of Common Stock \nfor issuance to employees and consultants pursuant to Healtheon's 1996 Stock \nPlan (\"HEALTHEON STOCK PLAN\"), of which 6,464,426 shares are subject to \noutstanding, unexercised options (\"HEALTHEON OPTIONS\") and 52,023 shares \nremain available for future grant.   Schedule 3.2(b) sets forth for each \noutstanding Healtheon Option the name of the holder of such option, the \ndomicile address of such holder, the number of shares of Common Stock subject \nto such option, the exercise price of such option and the vesting schedule \nfor such option, including the extent vested to date and whether the \nexercisability of such option will be accelerated and become exercisable by \nreason of the transactions contemplated by this Agreement.  Except as set \nforth in Schedule 3.2(b), there are no options, warrants, calls, rights, \ncommitments or agreements of any character, written or oral, to which \nHealtheon is a party or by which it is bound obligating Healtheon to issue, \ndeliver, sell, repurchase or redeem, or cause to be issued, delivered, sold, \nrepurchased or redeemed, any shares of the capital stock of Healtheon or \nobligating Healtheon to grant, extend, accelerate the vesting of, change the \nprice of, otherwise amend or enter into any such option, warrant, call, \nright, commitment or agreement. \n\n     3.3    SUBSIDIARIES.  Other than Acquisition Sub, Healtheon does not \nhave any subsidiaries or affiliated companies and does not otherwise own and \nhas never otherwise owned any shares of capital stock or any interest in, or \ncontrol, directly or indirectly, any other corporation, partnership,  limited \nliability company, association, joint venture or other business entity.\n     \n     3.4    AUTHORITY.  Each of Healtheon and Acquisition Sub has all \nrequisite corporate power and authority to enter into this Agreement and to \nconsummate the transactions contemplated hereby.  The execution and delivery \nof this Agreement and the consummation of the transactions contemplated \nhereby have been duly authorized by all necessary corporate action on the \npart of the Company and Acquisition Sub.  Each of Healtheon's Board of \nDirectors and Acquisition Sub's Board of Directors have unanimously approved \nthe Asset Purchase and this Agreement.  This Agreement has been duly executed \nand delivered by Healtheon and Acquisition Sub and constitutes the valid and \nbinding obligation of Healtheon and Acquisition Sub, enforceable in \naccordance with its terms.  Except as set forth on Schedule 3.4, the \nexecution and delivery of this Agreement by Healtheon and Acquisition Sub \ndoes not, and, as of the Closing, the consummation of the transactions \ncontemplated hereby will not, conflict with, or result in any violation of, \nor default under (with or without notice or lapse of time, or both), or give \nrise to a right of termination, cancellation or acceleration of any \nobligation or loss of any benefit under (any such event, a \"HEALTHEON \nCONFLICT\") (i) any provision of the Certificate of Incorporation or Bylaws of \nHealtheon, (ii) any provision of the Certificate of Incorporation or Bylaws \nof Acquisition Sub, or (iii) any mortgage, indenture, lease, contract, or \nother agreement or instrument, permit, concession, franchise, license, \njudgment, order, decree, statute, law, ordinance, rule or regulation \napplicable to Healtheon or its properties or assets.  No consent, waiver, \napproval, order or authorization of, or registration, declaration or filing \nwith, any Governmental Entity or any third party (so as not to trigger any \nHealtheon Conflict) is required by or with respect to Healtheon or \nAcquisition Sub in connection with the execution and delivery of this \nAgreement or the consummation of the transactions contemplated hereby, except \nfor (i) such consents, waivers, approvals, orders, authorizations, \nregistrations, declarations and filings as may be required under applicable \nfederal and state securities laws and (ii) such other consents, waivers, \nauthorizations, filings, approvals and registrations which are set forth on \nSchedule 3.4.\n\n     3.5    FINANCIAL STATEMENTS.  Section 3.5 sets forth the Healtheon's \naudited balance sheets as of December 31, 1996 and draft balance sheets as of \nDecember 31, 1997 and the related audited and draft statement of income and \ncash flow for the twelve-month periods ended December 31, 1996 and December \n31, 1997 (the \"HEALTHEON AUDITED FINANCIALS\") and Healtheon's unaudited \nbalance sheet of May 31, 1998 and the related unaudited statements of income \nand cash flow for the five months then ended (the \"HEALTHEON UNAUDITED \n\n\n                                      -19-\n\n\n\n\nFINANCIALS\") (collectively, such financial statements are sometimes referred \nto herein as \"HEALTHEON FINANCIAL STATEMENTS\").  The Healtheon Audited \nFinancials and the Healtheon Unaudited Financials are correct in all material \nrespects and have been prepared in accordance with GAAP applied on a basis \nconsistent throughout the periods indicated and consistent with each other \n(except that the Healtheon Unaudited Financials do not contain all the notes \nthat may be required by GAAP).  The Healtheon Audited Financials and \nHealtheon Unaudited Financials present fairly the financial condition, \noperating results and cash flows of Healtheon as of the dates and during the \nperiods indicated therein, subject in the case of the Healtheon Unaudited \nFinancials, to normal year-end adjustments, which will not be material in \namount or significance.  Healtheon's unaudited balance sheet dated as of May \n31, 1998 shall be referred to as the \"HEALTHEON CURRENT BALANCE SHEET\".\n\n     3.6    NO UNDISCLOSED LIABILITIES.  Except as set forth in Schedule 3.6, \nHealtheon does not have any liability, indebtedness, obligation, expense, \nclaim, deficiency, guaranty or endorsement of any type, whether accrued, \nabsolute, contingent, matured, unmatured or other (whether or not required to \nbe reflected in financial statements in accordance with generally accepted \naccounting principles), which individually or in the aggregate, (i) has not \nbeen reflected in the Healtheon Current Balance Sheet, or (ii) has not arisen \nin the ordinary course of Healtheon's business since the date of the \nHealtheon Current Balance Sheet, consistent with past practices.\n\n     3.7    NO CHANGES.  Except as set forth in Schedule 3.7 or in the \nordinary course of its business, since the date of the Healtheon Current \nBalance Sheet, there has not been, occurred or arisen any:\n\n            (a)    transaction by Healtheon except in the ordinary course of \nbusiness as conducted as of the date of the Healtheon Current Balance Sheet \nand consistent with past practices;\n\n            (b)    amendments or changes to the Certificate of Incorporation \nor Bylaws of Healtheon;\n\n            (c)    capital expenditure or commitment by Healtheon, either \nindividually or in the aggregate, exceeding $25,000;\n\n            (d)    destruction of, damage to or loss of any material assets, \nbusiness or customer of Healtheon (whether or not covered by insurance);\n\n            (e)    labor trouble or claim of wrongful discharge or other \nunlawful labor practice or action;\n\n            (f)    change in accounting methods or practices (including any \nchange in depreciation or amortization policies or rates) by Healtheon;\n\n            (g)    revaluation by Healtheon of any of its assets;\n\n            (h)    declaration, setting aside or payment of a dividend or \nother distribution with respect to the capital stock of Healtheon, or any \ndirect or indirect redemption, purchase or other acquisition by Healtheon of \nany of its capital stock;\n\n            (i)    increase in the salary or other compensation payable or to \nbecome payable to any of Healtheon's officers, directors, employees or \nadvisors, or the declaration, payment or commitment or obligation of any kind \nfor the payment of a bonus or other additional salary or compensation to any \nsuch person except as otherwise contemplated by this Agreement;\n\n\n                                      -20-\n\n\n\n\n            (j)    sale, lease, license or other disposition of any of the \nassets or properties of Healtheon, except in the ordinary course of business \nas conducted on that date and consistent with past practices;\n\n            (k)    amendment or termination of any material contract, \nagreement or license to which Healtheon is a party or by which it is bound;\n\n            (l)    loan by Healtheon to any person or entity, incurring by \nHealtheon of any indebtedness, guaranteeing by Healtheon of any indebtedness, \nissuance or sale of any debt securities of Healtheon or guaranteeing of any \ndebt securities of others, except for advances to employees for travel and \nbusiness expenses in the ordinary course of business, consistent with past \npractices;\n\n            (m)    waiver or release of any right or claim of Healtheon, \nincluding any write-off or other compromise of any account receivable of \nHealtheon;\n\n            (n)    commencement or notice or threat of commencement of any \nlawsuit or proceeding against or investigation of Healtheon or its affairs;\n\n            (o)    notice of any claim of ownership by a third party of \nHealtheon's Intellectual Property (as defined in Section 3.11 below) or of \ninfringement by Healtheon's of any third party's Intellectual Property rights;\n\n            (p)    issuance or sale by Healtheon of any of its shares of \ncapital stock, or securities exchangeable, convertible or exercisable \ntherefor, or of any other of its securities;\n\n            (q)    change in pricing or royalties set or charged by Healtheon \nto its customers or licensees or in pricing or royalties set or charged by \npersons who have licensed Intellectual Property to Healtheon;\n\n            (r)    event or condition of any character that has or could be \nreasonably expected to have a Healtheon Material Adverse Effect on Healtheon; \nor\n\n            (s)    negotiation or agreement by Healtheon or any officer or \nemployees thereof to do any of the things described in the preceding clauses \n(a) through (r) (other than negotiations with the Company and its \nrepresentatives regarding the transactions contemplated by this Agreement).\n\n     3.8    TAX AND OTHER RETURNS AND REPORTS.\n\n            (a)    TAX RETURNS AND AUDITS.  Except as set forth in Schedule \n3.8:\n\n                   (i)    Healtheon as of the Closing will have prepared and \nfiled all required Returns relating to any and all Taxes concerning or \nattributable to Healtheon or its operations and such Returns are true and \ncorrect and have been completed in accordance with applicable law.\n\n                   (ii)   Healtheon as of the Closing:  (A) will have paid or \naccrued all Taxes it is required to pay or accrue and (B) will have withheld \nwith respect to its employees all federal and state income taxes, FICA, FUTA \nand other Taxes required to be withheld.\n\n\n                                      -21-\n\n\n\n\n                   (iii)  Healtheon has not been delinquent in the payment of \nany Tax nor is there any Tax deficiency outstanding, proposed or assessed \nagainst Healtheon, nor has Healtheon executed any waiver of any statute of \nlimitations on or extending the period for the assessment or collection of \nany Tax.\n\n                   (iv)   No audit or other examination of any Return of \nHealtheon is currently in progress, nor has Healtheon been notified of any \nrequest for such an audit or other examination.\n\n                   (v)    Healtheon does not have any liabilities for unpaid \nfederal, state, local and foreign Taxes which have not been accrued or \nreserved against on the Healtheon Current Balance Sheet, whether asserted or \nunasserted, contingent or otherwise, and Healtheon has no knowledge of any \nbasis for the assertion of any such liability attributable to the Company, \nits assets or operations.\n\n                   (vi)   Healtheon has provided to the Company copies of all \nfederal and state income and all state sales and use Tax Returns for all \nperiods since the date of Healtheon's incorporation.\n\n                   (vii)  There are (and as of immediately following the \nEffective Date there will be) no Liens on the assets of Healtheon relating to \nor attributable to Taxes.\n\n                   (viii) Healtheon has no knowledge of any basis for the \nassertion of any claim relating or attributable to Taxes which, if adversely \ndetermined, would result in any Lien on the assets of Healtheon.\n\n                   (ix)   None of Healtheon's assets are treated as \n\"tax-exempt use property\" within the meaning of Section 168(h) of the Code.\n\n                   (x)    As of the Closing, there will not be any contract, \nagreement, plan or arrangement, including but not limited to the provisions \nof this Agreement, covering any employee or former employee of Healtheon \nthat, individually or collectively, could give rise to the payment of any \namount that would not be deductible pursuant to Section 280G or 162 of the \nCode.\n\n                   (xi)   Healtheon has not filed any consent agreement under \nSection 341(f) of the Code or agreed to have Section 341(f)(2) of the Code \napply to any disposition of a subsection (f) asset (as defined in Section \n341(f)(4) of the Code) owned by Healtheon.\n\n                   (xii)  Healtheon is not a party to a tax sharing or \nallocation agreement nor does Healtheon owe any amount under any such \nagreement.\n\n                   (xiii) Healtheon is not, and has not been at any time, a \n\"United States real property holding corporation\" within the meaning of \nSection 897(c)(2) of the Code.\n\n                   (xiv)  Healtheon's tax basis in its assets for purposes of \ndetermining its future amortization, depreciation and other federal income \ntax deductions is accurately reflected on the Healtheon's tax books and \nrecords.\n\n     3.9    RESTRICTIONS ON BUSINESS ACTIVITIES.  There is no agreement \n(noncompete or otherwise), commitment, judgment, injunction, order or decree \nto which Healtheon is a party or otherwise binding upon Healtheon which has \nor reasonably could be expected to have the effect of prohibiting or \nimpairing any business practice of Healtheon, any acquisition of property \n(tangible or intangible) by Healtheon or the conduct of business \n\n\n                                      -22-\n\n\n\n\nby Healtheon.  Without limiting the foregoing, Healtheon has not entered into \nany agreement under which Healtheon is restricted from selling, licensing or \notherwise distributing any of its products to any class of customers, in any \ngeographic area, during any period of time or in any segment of the market.\n\n     3.10   TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.\n\n            (a)    Healtheon owns no real property, nor has it ever owned any \nreal property.  Schedule 3.10(a) sets forth a list of all real property \ncurrently, or at any time in the past, leased by Healtheon, the name of the \nlessor, the date of the lease and each amendment thereto and, with respect to \nany current lease, the aggregate annual rental and\/or other fees payable \nunder any such lease and any security interest in Healtheon's assets created \nby such lease.  All such current leases are in full force and effect, are \nvalid and effective in accordance with their respective terms, and there is \nnot, under any of such leases, any existing default or event of default (or \nevent which with notice or lapse of time, or both, would constitute a \ndefault).\n\n            (b)    Healtheon has good and valid title to, or, in the case of \nleased properties and assets, valid leasehold interests in, all of its \ntangible properties and assets, real, personal and mixed, used or held for \nuse in its business, free and clear of any Liens, except as reflected in the \nHealtheon Financial Statements or in Schedule 3.10(b) and except for liens \nfor taxes not yet due and payable and such imperfections of title and \nencumbrances, if any, which are not material in character, amount or extent, \nand which do not materially detract from the value, or materially interfere \nwith the present use, of the property subject thereto or affected thereby.\n\n     3.11   INTELLECTUAL PROPERTY.\n\n            (a)    Healtheon owns, or is licensed or otherwise possesses \nlegally enforceable rights to use, all patents, trademarks, trade names, \nservice marks, copyrights, and any applications therefor, maskworks, net \nlists, schematics, technology, know-how, computer software programs or \napplications (in both source code and object code form), and tangible or \nintangible proprietary information or material that are used in the business \nof Healtheon as currently conducted or as proposed to be conducted by \nHealtheon (the \"HEALTHEON INTELLECTUAL PROPERTY RIGHTS\").  Schedule 3.11(a) \nsets forth a complete list of all patents, registered and material \nunregistered trademarks, registered copyrights, trade names and service \nmarks, and any applications therefor, included in the Healtheon Intellectual \nProperty Rights, and specifies, where applicable, the jurisdictions in which \neach such Healtheon Intellectual Property Right has been issued or registered \nor in which an application for such issuance and registration has been filed, \nincluding the respective registration or application numbers and the names of \nall registered owners. \n\n            (b)     Schedule 3.11(b) sets forth a complete list of all \nlicenses, sublicenses and other agreements as to which Healtheon is a party \nand pursuant to which Healtheon or any other person is authorized to use any \nHealtheon Intellectual Property Right (excluding End-User Licenses) or trade \nsecret of Healtheon, and includes the identity of all parties thereto, a \ndescription of the nature and subject matter thereof, the applicable royalty \nor other fees and the term thereof.  The execution and delivery of this \nAgreement by Healtheon, and the consummation of the transactions contemplated \nhereby, will neither cause Healtheon to be in violation or default under any \nsuch license, sublicense or agreement, nor entitle any other party to any \nsuch license, sublicense or agreement to terminate or modify such license, \nsublicense or agreement.  Except as set forth in Schedules 3.11(a) or \n3.11(b), Healtheon is the sole and exclusive owner or licensee of, with all \nright, title and interest in and to (free and clear of any liens or \nencumbrances), the Healtheon Intellectual Property Rights, and has sole and \nexclusive rights (and is not contractually obligated to pay any compensation \nto any third party in respect thereof) to the use \n\n\n                                      -23-\n\n\n\n\nthereof or the material covered thereby in connection with the services or \nproducts in respect of which the Healtheon Intellectual Property Rights are \nbeing used.  \n\n            (c)    No claims with respect to the Healtheon Intellectual \nProperty Rights have been asserted or are, to Healtheon's knowledge, \nthreatened by any person, nor are there any valid grounds for any claims, (i) \nto the effect that the manufacture, sale, licensing or use of any of the \nproducts of Healtheon infringes on any copyright, patent, trade mark, service \nmark, trade secret or other proprietary right, (ii) against the use by \nHealtheon of any trademarks, service marks, trade names, trade secrets, \ncopyrights, maskworks, patents, technology, know-how or computer software \nprograms and applications used in Healtheon's business as currently conducted \nor as proposed to be conducted by Healtheon, or (iii) challenging the \nownership by Healtheon, validity or effectiveness of any of the Healtheon \nIntellectual Property Rights.  All registered trademarks, service marks and \ncopyrights held by Healtheon are valid and subsisting. Healtheon has not \ninfringed, and the business of Healtheon as currently conducted or as \nproposed to be conducted does not infringe, any copyright, patent, trademark, \nservice mark, trade secret or other  proprietary right of any third party.  \nThere is no material unauthorized use, infringement or misappropriation of \nany of the Healtheon Intellectual Property Rights by any third party, \nincluding any employee or former employee of Healtheon.  No Healtheon \nIntellectual Property Right or product of Healtheon or any of its \nsubsidiaries is subject to any outstanding decree, order, judgment, or \nstipulation restricting in any manner the licensing thereof by Healtheon.  \nEach employee, consultant or contractor of Healtheon has executed a \nproprietary information and confidentiality agreement substantially in the \nHealtheon's standard forms. All software included in the Healtheon \nIntellectual Property Rights is original with Healtheon and has been either \ncreated by employees of Healtheon on a work-for-hire basis or by consultants \nor contractors who have created such software themselves and have assigned \nall rights they may have had in such software to Healtheon.\n\n     3.12   AGREEMENTS, CONTRACTS AND COMMITMENTS.  Except as set forth on \nSchedule 3.12(a) or in the ordinary course of its business, Healtheon does \nnot have, is not a party to nor is it bound by:\n\n                   (i)    any collective bargaining agreements,\n\n                   (ii)   any agreements or arrangements that contain any \nseverance pay or post-employment liabilities or obligations,\n\n                   (iii)  any bonus, deferred compensation, pension, profit \nsharing or retirement plans, or any other employee benefit plans or \narrangements,\n\n                   (iv)   any employment or consulting agreement, contract or \ncommitment with an employee or individual consultant or salesperson or any \nconsulting or sales agreement, contract or commitment under which any firm or \nother organization provides services to Healtheon,\n\n                   (v)    any agreement or plan, including, without \nlimitation, any stock option plan, stock appreciation rights plan or stock \npurchase plan, any of the benefits of which will be increased, or the vesting \nof benefits of which will be accelerated, by the occurrence of any of the \ntransactions contemplated by this Agreement or the value of any of the \nbenefits of which will be calculated on the basis of any of the transactions \ncontemplated by this Agreement,\n\n                   (vi)   any fidelity or surety bond or completion bond,\n\n\n                                      -24-\n\n\n\n\n                   (vii)  any lease of personal property having a value \nindividually in excess of $25,000,\n\n                   (viii) any agreement of indemnification or guaranty,\n\n                   (ix)   any agreement, contract or commitment containing \nany covenant limiting the freedom of Healtheon to engage in any line of \nbusiness or to compete with any person,\n\n                   (x)    any agreement, contract or commitment relating to \ncapital expenditures and involving future payments in excess of $25,000,\n\n                   (xi)   any agreement, contract or commitment relating to \nthe disposition or acquisition of assets or any interest in any business \nenterprise,\n\n                   (xii)  any mortgages, indentures, loans or credit \nagreements, security agreements or other agreements or instruments relating \nto the borrowing of money or extension of credit, including guaranties \nreferred to in clause (viii) hereof,\n\n                   (xiii) any purchase order or contract for the purchase of \nraw materials involving $25,000 or more,\n\n                   (xiv)  any construction contracts,\n\n                   (xv)   any distribution, joint marketing or development \nagreement, \n\n                   (xvi)  any agreement pursuant to which Healtheon has \ngranted or may grant in the future, to any party, a source-code license or \noption or other right to use or acquire source-code, or \n\n                   (xvii) any other agreement, contract or commitment that \ninvolves $25,000 or more or is not cancelable without penalty within thirty \n(30) days.\n\nExcept for such alleged breaches, violations and defaults, and events that \nwould constitute a breach, violation or default with the lapse of time, \ngiving of notice, or both, as are all noted in Schedule 3.12(b),Healtheon has \nnot breached, violated or defaulted under, or received notice that it has \nbreached, violated or defaulted under, any of the terms or conditions of any \nagreement, contract or commitment required to be set forth on Schedule \n3.12(a) or Schedule 3.11(b) (any such agreement, contract or commitment, a \n\"HEALTHEON CONTRACT\"). Each Healtheon Contract is in full force and effect \nand, except as otherwise disclosed in Schedule 3.12(b), is not subject to any \ndefault thereunder of which Healtheon has knowledge by any party obligated to \nHealtheon pursuant thereto.\n\n     3.13   INTERESTED PARTY TRANSACTIONS.  Except as set forth on Schedule \n3.13, no officer, director or shareholder of Healtheon (nor any ancestor, \nsibling, descendant or spouse of any of such persons, or any trust, \npartnership or corporation in which any of such persons has or has had an \ninterest), has or has had, directly or indirectly, (i) an economic interest \nin any entity which furnished or sold, or furnishes or sells, services or \nproducts that Healtheon furnishes or sells, or proposes to furnish or sell, \n(ii) an economic interest in any entity that purchases from or sells or \nfurnishes to, Healtheon, any goods or services or (iii) a beneficial interest \nin any contract or agreement set forth in Schedule 3.12(a) or Schedule \n3.11(b); provided, that ownership of no more than one percent (1%) of the \noutstanding voting stock of a publicly traded corporation shall not be deemed \nan \"economic interest in any entity\" for purposes of this Section 3.13.\n\n\n                                      -25-\n\n\n\n\n     3.14   COMPLIANCE WITH LAWS. Healtheon has complied in all material \nrespects with, is not in material violation of, and has not received any \nnotices of violation with respect to, any foreign, federal, state or local \nstatute, law or regulation.\n\n     3.15   LITIGATION.  Except as set forth in Schedule 3.15, there is no \naction, suit or proceeding of any nature pending or to Healtheon's knowledge \nthreatened against Healtheon, its properties or any of its officers or \ndirectors, in their respective capacities as such.  Except as set forth in \nSchedule 3.15, to the Healtheon's knowledge, there is no investigation \npending or threatened against Healtheon, its properties or any of its \nofficers or directors (in their respective capacities as such) by or before \nany governmental entity.  Schedule 3.15 sets forth, with respect to any \npending or threatened action, suit, proceeding or investigation, the forum, \nthe parties thereto, the subject matter thereof and the amount of damages \nclaimed or other remedy requested.  No Governmental Entity has at any time \nchallenged or questioned the legal right of Healtheon to manufacture, offer \nor sell any of its products in the present manner or style thereof.\n\n     3.16   INSURANCE.  Set forth on Schedule 3.16 is a list of all of \nHealtheon's insurance policies and fidelity bonds.  With respect to the \ninsurance policies and fidelity bonds covering the assets, business, \nequipment, properties, operations, employees, officers and directors of \nHealtheon, there is no claim by Healtheon pending under any of such policies \nor bonds as to which coverage has been questioned, denied or disputed by the \nunderwriters of such policies or bonds.  All premiums due and payable under \nall such policies and bonds have been paid and Healtheon is otherwise in \nmaterial compliance with the terms of such policies and bonds (or other \npolicies and bonds providing substantially similar insurance coverage). \nHealtheon has no knowledge of any threatened termination of, or material \npremium increase with respect to, any of such policies.\n\n     3.17   MINUTE BOOKS.  The minute books of Healtheon made available to \ncounsel for the Company are the only minute books of Healtheon and contain a \nreasonably accurate summary of all meetings of directors (or committees \nthereof) and stockholders or actions by written consent since the time of \nincorporation of Healtheon.\n\n     3.18   ENVIRONMENTAL MATTERS.\n\n            (a)    HAZARDOUS MATERIAL.  Healtheon has not operated any \nunderground storage tanks, and has no knowledge of the existence, at any \ntime, of any underground storage tank (or related piping or pumps), at any \nproperty that Healtheon has at any time owned, operated, occupied or leased.  \nHealtheon has not released any amount of any substance that has been \ndesignated by any Governmental Entity or by applicable federal, state or \nlocal law to be a Hazardous Material.  No Hazardous Materials are present as \na result of the actions or omissions of Healtheon, or, to Healtheon's \nknowledge, as a result of any actions of any third party or otherwise, in, on \nor under any property, including the land and the improvements, ground water \nand surface water thereof, that Healtheon has at any time owned, operated, \noccupied or leased.\n\n            (b)    HAZARDOUS MATERIALS ACTIVITIES. Healtheon has not engaged \nin any Hazardous Materials Activities in violation of any rule, regulation, \ntreaty or statute promulgated by any Governmental Entity in effect prior to \nor as of the date hereof to prohibit, regulate or control Hazardous Materials \nor any Hazardous Material Activity.\n\n            (c)    PERMITS.  The Company currently holds all Environmental \nPermits necessary for the conduct of Healtheon's Hazardous Material \nActivities and other businesses of Healtheon as such activities and \nbusinesses are currently being conducted.\n\n\n                                      -26-\n\n\n\n\n            (d)    ENVIRONMENTAL LIABILITIES.  No action, proceeding, \nrevocation proceeding, amendment, procedure, writ, injunction or claim is \npending, or to Healtheon's knowledge, threatened concerning any Environmental \nPermit, Hazardous Material or any Hazardous Materials Activity of Healtheon. \nHealtheon is not aware of any fact or circumstance which could involve \nHealtheon in any environmental litigation or impose upon Healtheon any \nenvironmental liability.\n\n     3.19   BROKERS' AND FINDERS' FEES; THIRD PARTY EXPENSES.  Except as set \nforth on Schedule 3.19, Healtheon has not incurred, nor will it incur, \ndirectly or indirectly, any liability for brokerage or finders' fees, \ninvestment banking fees, consulting fees or agents' commissions or any \nsimilar charges in connection with this Agreement or any transaction \ncontemplated hereby. Schedule 3.19 sets forth the principal terms and \nconditions of any agreement, written or oral, with respect to such fees.  \nSchedule 3.19 also sets forth Healtheon's current reasonable estimate of all \nThird Party Expenses (as defined in Section 5.4) expected to be incurred by \nHealtheon in connection with the negotiation and effectuation of the terms \nand conditions of this Agreement and the transactions contemplated hereby.\n\n     3.20   EMPLOYEE MATTERS AND BENEFIT PLANS.\n\n            (a)    DEFINITIONS.  With the exception of the definition of \n\"Affiliate\" set forth in Section 3.20(a)(i) below (which definition shall \napply only to this Section 3.20), for purposes of this Agreement, the \nfollowing terms shall have the meanings set forth below:\n\n                   (i)    \"HEALTHEON AFFILIATE\" shall mean any other person \nor entity under common control with Healtheon within the meaning of Section \n414(b), (c), (m) or (o) of the Code and the regulations thereunder;\n\n                   (ii)   \"HEALTHEON EMPLOYEE PLAN\" shall refer to any plan, \nprogram, policy, practice, contract, agreement or other arrangement providing \nfor compensation, severance, termination pay, performance awards, stock or \nstock-related awards, fringe benefits or other employee benefits or \nremuneration of any kind, whether formal or informal, funded or unfunded and \nwhether or not legally binding, including without limitation, each \"employee \nbenefit plan\", within the meaning of Section 3(3) of ERISA which is or has \nbeen maintained, contributed to, or required to be contributed to, by the \nCompany or any Healtheon Affiliate for the benefit of any \"Healtheon \nEmployee\" (as defined below), and pursuant to which Healtheon or any \nHealtheon Affiliate has or may have any material liability contingent or \notherwise;\n\n                   (iii)  \"HEALTHEON EMPLOYEE\" shall mean any current, \nformer, or retired employee, officer, or director of Healtheon or any \nHealtheon Affiliate;\n\n                   (iv)   \"HEALTHEON EMPLOYEE AGREEMENT\" shall refer to each \nmanagement, employment, severance, consulting, relocation, repatriation, \nexpatriation, visas, work permit or similar agreement or contract between \nHealtheon or any Healtheon Affiliate and any Healtheon Employee or consultant;\n     \n                   (v)    \"HEALTHEON PENSION PLAN\" shall refer to each \nHealtheon Employee Plan which is an \"employee pension benefit plan\", within \nthe meaning of Section 3(2) of ERISA.\n\n            (b)    SCHEDULE.  Schedule 3.20(b) contains an accurate and \ncomplete list of each Healtheon Employee Plan and each Healtheon Employee \nAgreement, together with a schedule of all liabilities, whether or not \naccrued, under each such Healtheon Employee Plan or Healtheon Employee \nAgreement. Healtheon does not \n\n\n                                      -27-\n\n\n\n\nhave any plan or commitment, whether legally binding or not, to establish any \nnew Healtheon Employee Plan or Healtheon Employee Agreement, to modify any \nHealtheon Employee Plan or Healtheon Employee Agreement (except to the extent \nrequired by law or to conform any such Healtheon Employee Plan or Healtheon \nEmployee Agreement to the requirements of any applicable law, in each case as \npreviously disclosed to Healtheon in writing, or as required by this \nAgreement), or to enter into any Healtheon Employee Plan or Healtheon \nEmployee Agreement, nor does it have any intention or commitment to do any of \nthe foregoing. \n\n            (c)    DOCUMENTS. Healtheon has provided to Company (i) correct \nand complete copies of all documents embodying or relating to each Healtheon \nEmployee Plan and each Healtheon Employee Agreement including all amendments \nthereto and written interpretations thereof; (ii) the most recent annual \nactuarial valuations, if any, prepared for each Healtheon Employee Plan; \n(iii) the three most recent annual reports (Series 5500 and all schedules \nthereto), if any, required under ERISA or the Code in connection with each \nHealtheon Employee Plan or related trust; (iv) if the Healtheon Employee Plan \nis funded, the most recent annual and periodic accounting of Healtheon \nEmployee Plan assets; (v) the most recent summary plan description together \nwith the most recent summary of material modifications, if any, required \nunder ERISA with respect to each Healtheon Employee Plan; (vi) all IRS \ndetermination letters and rulings relating to Healtheon Employee Plans and \ncopies of all applications and correspondence to or from the IRS or the \nDepartment of Labor (\"DOL\") with respect to any Healtheon Employee Plan; \n(vii) all communications material to any Healtheon Employee or Healtheon \nEmployees relating to any Healtheon Employee Plan and any proposed Healtheon \nEmployee Plans, in each case, relating to any amendments, terminations, \nestablishments, increases or decreases in benefits, acceleration of payments \nor vesting schedules or other events which would result in any material \nliability to Healtheon; and (viii) all registration statements and \nprospectuses prepared in connection with each Healtheon Employee Plan.\n\n            (d)    EMPLOYEE PLAN COMPLIANCE.  Except as set forth on Schedule \n3.20(d), (i)  Healtheon has performed in all material respects all \nobligations required to be performed by it under each Healtheon Employee \nPlan, and each Healtheon Employee Plan has been established and maintained in \nall material respects in accordance with its terms and in compliance with all \napplicable laws, statutes, orders, rules and regulations, including but not \nlimited to ERISA or the Code; (ii) no \"prohibited transaction\", within the \nmeaning of Section 4975 of the Code or Section 406 of ERISA, has occurred \nwith respect to any Healtheon Employee Plan; (iii) there are no actions, \nsuits or claims pending, or, to the knowledge of Healtheon, threatened or \nanticipated (other than routine claims for benefits) against any Healtheon \nEmployee Plan or against the assets of any Healtheon Employee Plan; and (iv) \neach Healtheon Employee Plan can be amended, terminated or otherwise \ndiscontinued after the Closing in accordance with its terms, without \nliability to the Company, Healtheon or any Healtheon Affiliates (other than \nordinary administration expenses typically incurred in a termination event); \n(v) there are no inquiries or proceedings pending or, to the knowledge of \nHealtheon or any affiliates, threatened by the IRS or DOL with respect to any \nHealtheon Employee Plan; and (vi) neither Healtheon nor any Healtheon \nAffiliate is subject to any penalty or tax with respect to any Healtheon \nEmployee Plan under Section 402(i) of ERISA or Section 4975 through 4980 of \nthe Code.\n\n            (e)    PENSION PLANS. Healtheon does not now, nor has it ever, \nmaintained, established, sponsored, participated in, or contributed to, any \nPension Plan which is subject to Part 3 of Subtitle B of Title I of ERISA, \nTitle IV of ERISA or Section 412 of the Code.\n\n            (f)    MULTIEMPLOYER PLANS.  At no time has Healtheon contributed \nto or been requested to contribute to any Multiemployer Plan.\n\n\n                                      -28-\n\n\n\n\n            (g)    NO POST-EMPLOYMENT OBLIGATIONS.  Except as set forth in \nSchedule 3.20(g), no Healtheon Employee Plan provides, or has any liability \nto provide, life insurance, medical or other employee benefits to any \nHealtheon Employee upon his or her retirement or termination of employment \nfor any reason, except as may be required by statute, and Healtheon has never \nrepresented, promised or contracted (whether in oral or written form) to any \nHealtheon Employee (either individually or to Employees as a group) that such \nHealtheon Employee(s) would be provided with life insurance, medical or other \nemployee welfare benefits upon their retirement or termination of employment, \nexcept to the extent required by statute.\n\n            (h)    EFFECT OF TRANSACTION.\n\n                   (i)    Except as set forth on Schedule 3.20(h)(i), the \nexecution of this Agreement and the consummation of the transactions \ncontemplated hereby will not (either alone or upon the occurrence of any \nadditional or subsequent events) constitute an event under any Healtheon \nEmployee Plan, Healtheon Employee Agreement, trust or loan that will or may \nresult in any payment (whether of severance pay or otherwise), acceleration, \nforgiveness of indebtedness, vesting, distribution, increase in benefits or \nobligation to fund benefits with respect to any Healtheon Employee.\n\n                   (ii)   Except as set forth on Schedule 3.20(h)(ii), no \npayment or benefit which will or may be made by Healtheon or Company or any \nof their respective affiliates with respect to any Employee will be \ncharacterized as an \"excess parachute payment\" within the meaning of Section \n280G(b)(1) of the Code.\n\n            (i)    EMPLOYMENT MATTERS.  Healtheon (i) is in compliance in all \nmaterial respects with all applicable foreign, federal, state and local laws, \nrules and regulations respecting employment, employment practices, terms and \nconditions of employment and wages and hours, in each case, with respect to \nHealtheon Employees; (ii) has withheld all amounts required by law or by \nagreement to be withheld from the wages, salaries and other payments to \nHealtheon Employees; (iii) is not liable for any arrears of wages or any \ntaxes or any penalty for failure to comply with any of the foregoing; and \n(iv) is not liable for any payment to any trust or other fund or to any \ngovernmental or administrative authority, with respect to unemployment \ncompensation benefits, social security or other benefits or obligations for \nHealtheon Employees (other than routine payments to be made in the normal \ncourse of business and consistent with past practice).\n\n            (j)    LABOR.  No work stoppage or labor strike against Healtheon \nis pending or, to the best knowledge of Healtheon, threatened.  Except as set \nforth in Schedule 3.20(j),Healtheon is not involved in or, to the knowledge \nof Healtheon, threatened with, any labor dispute, grievance, or litigation \nrelating to labor, safety or discrimination matters involving any Healtheon \nEmployee, including, without limitation, charges of unfair labor practices or \ndiscrimination complaints, which, if adversely determined, would, \nindividually or in the aggregate, result in liability to Healtheon.  Neither \nHealtheon nor any of its subsidiaries has engaged in any unfair labor \npractices within the meaning of the National Labor Relations Act which would, \nindividually or in the aggregate, directly or indirectly result in a \nliability to Healtheon.  Except as set forth in Schedule 3.20(j),Healtheon is \nnot presently, nor has it been in the past, a party to, or bound by, any \ncollective bargaining agreement or union contract with respect to Healtheon \nEmployees and no collective bargaining agreement is being negotiated by \nHealtheon.\n\n     3.21   REPRESENTATIONS COMPLETE.  None of the representations or \nwarranties made by Healtheon or Acquisition Sub (as modified by the Healtheon \nand Acquisition Sub Schedules), nor any statement made in any schedule or \ncertificate furnished by Healtheon or Acquisition Sub pursuant to this \nAgreement, or furnished in or in connection with documents mailed or \ndelivered to the stockholders of Healtheon or Acquisition Sub in \n\n\n                                      -29-\n\n\n\n\nconnection with soliciting their consent to this Agreement and the Asset \nPurchase, contains or will contain at the Closing, any untrue statement of a \nmaterial fact, or omits or will omit at the Closing to state any material \nfact necessary in order to make the statements contained herein or therein, \nin the light of the circumstances under which made, not misleading.\n\n                                      ARTICLE IV\n\n                             CONDUCT PRIOR TO THE CLOSING\n\n     4.1    CONDUCT OF BUSINESS OF THE COMPANY.\n\n            During the period from the date of this Agreement and continuing \nuntil the earlier of the termination of this Agreement and the Closing, the \nCompany agrees (except to the extent that Healtheon shall otherwise consent \nin writing) to carry on its business in the usual, regular and ordinary \ncourse in substantially the same manner as heretofore conducted, to pay its \ndebts and Taxes when due, to pay or perform other obligations when due, and, \nto the extent consistent with such business, to use all reasonable efforts \nconsistent with past practice and policies to preserve intact its present \nbusiness organization, keep available the services of its present officers \nand key employees and preserve their relationships with customers, suppliers, \ndistributors, licensors, licensees, and others having business dealings with \nit, all with the goal of preserving unimpaired its goodwill and ongoing \nbusinesses at the Closing.  The Company shall promptly notify Healtheon of \nany event or occurrence or emergency not in the ordinary course of its \nbusiness, and any material event involving or adversely affecting the Company \nor its business.  Except as expressly contemplated by this Agreement, the \nCompany shall not, without the prior written consent of Healtheon:\n\n                   (i)    Enter into any commitment, activity or transaction \nnot in the ordinary course of business.\n\n                   (ii)   Transfer to any person or entity any rights to any \nCompany Intellectual Property Rights (other than pursuant to End-User \nLicenses in the ordinary course of business);\n\n                   (iii)  Enter into or amend any agreements pursuant to \nwhich any other party is granted manufacturing, marketing, distribution or \nsimilar rights of any type or scope with respect to any products of the \nCompany;\n\n                   (iv)   Amend or otherwise modify (or agree to do so), \nexcept in the ordinary course of business, or violate the terms of, any of \nthe agreements set forth or described in the Company Schedules;\n\n                   (v)    Commence any litigation;\n\n                   (vi)   Declare, set aside or pay any dividends on or make \nany other distributions (whether in cash, equity interests or property) in \nrespect of any of its units or other evidences of ownership, or split, \ncombine or reclassify any of its units or issue or authorize the issuance of \nany other securities in respect of, in lieu of or in substitution for units \nor other evidences of ownership of the Company, or repurchase, redeem or \notherwise acquire, directly or indirectly, any Company Capital Stock (or \nCompany Capital Stock Equivalents);\n\n\n                                      -30-\n\n\n\n\n                   (vii)  Issue, grant, deliver or sell or authorize or \npropose the issuance, grant, delivery or sale of, or purchase or propose the \npurchase of, any units or securities convertible into, or subscriptions, \nrights, warrants or options to acquire, or other agreements or commitments of \nany character obligating it to issue any such units or other convertible \nsecurities;\n\n                   (viii) Cause or permit any amendments to its \nOrganizational Documents;\n\n                   (ix)   Acquire or agree to acquire by merging or \nconsolidating with, or by purchasing any assets or equity securities of, or \nby any other manner, any business or any corporation, partnership, \nassociation or other business organization or division thereof, or otherwise \nacquire or agree to acquire any assets which are material, individually or in \nthe aggregate, to the business of the Company;\n\n                   (x)    Sell, lease, license or otherwise dispose of any of \nits properties or assets, except in the ordinary course of business and \nconsistent with past practice;\n\n                   (xi)   Incur any indebtedness for borrowed money or \nguarantee any such indebtedness or issue or sell any debt securities of the \nCompany or guarantee any debt securities of others;\n\n                   (xii)  Grant any severance or termination pay to any \ndirector, officer, employee or consultant, except payments made pursuant to \nstandard written agreements outstanding on the date hereof (which such \nagreements are disclosed on Schedule 4.1(a)(xii));\n\n                   (xiii) Adopt or amend any employee benefit plan, program, \npolicy or arrangement, or enter into any employment contract, extend any \nemployment offer, pay or agree to pay any special bonus or special \nremuneration to any director, employee or consultant, or increase the \nsalaries or wage rates of its employees (other than the two employees of the \nCompany currently under review);\n\n                   (xiv)  Revalue any of its assets, including without \nlimitation writing down the value of inventory or writing off notes or \naccounts receivable in excess of $10,000 in the aggregate;\n\n                   (xv)   Pay, discharge or satisfy, in an amount in excess \nof $10,000, in any one case, or $25,000, in the aggregate, any claim, \nliability or obligation (absolute, accrued, asserted or unasserted, \ncontingent or otherwise), other than the payment, discharge or satisfaction \nin the ordinary course of business of liabilities reflected or reserved \nagainst in the Company Financial Statements;\n\n                   (xvi)  Make or change any material election in respect of \nTaxes, adopt or change any accounting method in respect of Taxes, enter into \nany closing agreement, settle any claim or assessment in respect of Taxes, or \nconsent to any extension or waiver of the limitation period applicable to any \nclaim or assessment in respect of Taxes;\n\n                   (xvii) Enter into any strategic alliance, joint \ndevelopment or joint marketing arrangement or agreement; \n\n                   (xviii)       Fail to pay or otherwise satisfy its \nmonetary obligations as they become due, except such as are being contested \nin good faith;\n\n\n                                      -31-\n\n\n\n\n                   (xix)   Waive or commit to waive any rights with a value \nin excess of $10,000, in any one case, or $25,000, in the aggregate;\n\n                   (xx)    Cancel, materially amend or renew any insurance \npolicy other than in the ordinary course of business;\n\n                   (xxi)  Alter, or enter into any commitment to alter, its \ninterest in any corporation, association, joint venture, partnership or \nbusiness entity in which the Company directly or indirectly holds any \ninterest on the date hereof; or\n\n                   (xxii) Take, or agree in writing or otherwise to take, any \nof the actions described in Sections 4.1(i) through (xxii) above, or any \nother action that would prevent the Company from performing or cause the \nCompany not to perform its covenants hereunder.\n\n     4.2    NO COMPANY SOLICITATION.  Until the earlier of the Closing and \nthe date of termination of this Agreement pursuant to the provisions of \nSection 8.1 hereof, the Company will not (nor will the Company permit any of \nthe Company's officers, directors, Members, agents, representatives or \naffiliates to) directly or indirectly, take any of the following actions with \nany party other than Healtheon and its designees:  (a) solicit, initiate, \nentertain, or encourage any proposals or offers from, or conduct discussions \nwith or engage in negotiations with, any person relating to any possible \nacquisition of the Company or any of its subsidiaries (whether by way of \nMerger, purchase of capital stock, purchase of assets or otherwise), any \nmaterial portion of its or their capital stock or assets or any equity \ninterest in the Company or any of its subsidiaries, (b) provide information \nwith respect to it to any person, other than Healtheon, relating to, or \notherwise cooperate with, facilitate or encourage any effort or attempt by \nany such person with regard to, any possible acquisition of the Company \n(whether by way of Merger, purchase of capital stock, purchase of assets or \notherwise), any material portion of its or their capital stock or assets or \nany equity interest in the Company or any of its subsidiaries, (c) enter into \nan agreement with any person, other than Healtheon, providing for the \nacquisition of the Company (whether by way of Merger, purchase of capital \nstock, purchase of assets or otherwise), any material portion of its or their \ncapital stock or assets or any equity interest in the Company or any of its \nsubsidiaries, or (d) make or authorize any statement, recommendation or \nsolicitation in support of any possible acquisition of the Company or any of \nits subsidiaries (whether by way of Merger, purchase of capital stock, \npurchase of assets or otherwise), any material portion of its or their \ncapital stock or assets or any equity interest in the Company or any of its \nsubsidiaries by any person, other than by Healtheon.  The Company shall \nimmediately cease and cause to be terminated any such contacts or \nnegotiations with third parties relating to any such transaction or proposed \ntransaction.  In addition to the foregoing, if the Company receives prior to \nthe Closing or the termination of this Agreement any offer or proposal \nrelating to any of the above, the Company shall immediately notify Healtheon \nthereof, including information as to the identity of the offeror or the party \nmaking any such offer or proposal and the specific terms of such offer or \nproposal, as the case may be, and such other information related thereto as \nHealtheon may reasonably request.  Except as contemplated by this Agreement, \ndisclosure by the Company of the terms hereof (other than the prohibition of \nthis section) shall be deemed to be a violation of this Section 4.2.\n\n\n                                      -32-\n\n\n\n\n                                      ARTICLE V\n\n                                ADDITIONAL AGREEMENTS\n\n     5.1    COMPANY MEMBER APPROVALS.  As promptly as practicable:  \n\n            (a)    Prior to the execution of this Agreement, Healtheon and \nthe Company have prepared the necessary documentation for, and as soon as \nreasonably practicable following the execution of this Agreement they shall \napply to obtain, a permit (a \"CALIFORNIA PERMIT\") from the Commissioner of \nCorporations of the State of California (after a hearing before the \nCalifornia Department of Corporations) pursuant to Section 25121 of the \nCalifornia Corporate Securities Law of 1968, so that the issuance of \nHealtheon Common Stock in the Asset Purchase shall be exempt from \nregistration under Section 3(a)(10) of the Securities Act of 1933, as amended \n(the \"SECURITIES ACT\") and California blue sky laws.  The Company and \nHealtheon will respond to any comments from the California Department of \nCorporations and use their commercially reasonable effort to have the \nCalifornia Permit granted as soon as practical after such filing.  As \npromptly as practical after the date of this Agreement, Healtheon shall \nprepare and make such filings as are required under applicable Blue Sky laws \nrelating to the transactions contemplated by this Agreement.\n\n            (b)    As promptly as practicable after the receipt of a \nCalifornia Permit, the Company shall submit this Agreement and the \ntransactions contemplated hereby, including without limitation the sale, to \nthe Company's Members for approval and adoption as provided by California \nCorporate Code and the Company's Organizational Documents.  The materials \nsubmitted to the Company's Members shall be subject to review and approval by \nHealtheon and include information regarding Healtheon and the Company, the \nterms of the Asset Purchase and this Agreement and the unanimous \nrecommendation of the Board of Directors of the Company in favor of the Asset \nPurchase, this Agreement and the transactions contemplated hereby.\n\n     5.2    ACCESS TO INFORMATION.  Each party shall afford the other and its \naccountants, counsel and other representatives, reasonable access during \nnormal business hours during the period prior to the Closing to (a) all of \nits properties, books, contracts, commitments and records, and (b) all other \ninformation concerning the business, properties and personnel (subject to \nrestrictions imposed by applicable law) of it as the others may reasonably \nrequest, subject, in the case of Healtheon, to reasonable limits on access to \nits technical and other nonpublic information.  No information or knowledge \nobtained in any investigation pursuant to this Section 5.2 shall affect or be \ndeemed to modify any representation or warranty contained herein.\n\n     5.3    CONFIDENTIALITY.  Each of the parties hereto hereby agrees to \nkeep the terms of this Agreement (except to the extent contemplated hereby) \nand such information or knowledge obtained in any investigation pursuant to \nSection 5.2, or pursuant to the negotiation and execution of this Agreement \nor the effectuation of the transactions contemplated hereby, confidential; \nPROVIDED, HOWEVER, that the foregoing shall not apply to information or \nknowledge which (a) a party can demonstrate was already lawfully in its \npossession prior to the disclosure thereof by the other party, (b) is \ngenerally known to the public and did not become so known through any \nviolation of law, (c) became known to the public through no fault of such \nparty, (d) is later lawfully acquired by such party without confidentiality \nrestrictions from other sources, (e) is required to be disclosed by order of \ncourt or government agency with subpoena powers (provided that such party \nshall have provided the other party with prior notice of such order or \nsubpoena and an opportunity to object or take other available action) or (f) \nwhich is disclosed in the course of any litigation between any of the parties \nhereto.\n\n\n                                      -33-\n\n\n\n\n     5.4    EXPENSES.  Whether or not the Asset Purchase is consummated, all \nfees and expenses incurred in connection with the Asset Purchase including, \nwithout limitation, all legal, accounting, financial advisory, consulting and \nall other fees and expenses of third parties (\"THIRD PARTY EXPENSES\") \nincurred by a party in connection with the negotiation and effectuation of \nthe terms and conditions of this Agreement and the transactions contemplated \nhereby, shall be the obligation of the respective party incurring such fees \nand expenses.\n\n     5.5    PUBLIC DISCLOSURE.  Unless otherwise required by law (including, \nwithout limitation, federal and state securities laws) prior to the Closing, \nno disclosure (whether or not in response to an inquiry) of the subject \nmatter of this Agreement shall be made by any party hereto unless approved by \nHealtheon and the Company prior to release.\n\n     5.6    CONSENTS.  Healtheon and the Company shall use commercially \nreasonable efforts to obtain the consents, waivers, assignments and approvals \nunder any of the Healtheon Contracts and Company Contracts as may be required \nin connection with the Asset Purchase (all of such consents, waivers and \napprovals are set forth in the Company Schedules and Healtheon and \nAcquisition Sub Schedules) so as to preserve and transfer all rights of and \nbenefits to Acquisition Sub thereunder.\n\n     5.7    REASONABLE EFFORTS.  Subject to the terms and conditions provided \nin this Agreement, each of the parties hereto shall use its reasonable \nefforts to ensure that its representations and warranties remain true and \ncorrect in all material respects, and to take promptly, or cause to be taken, \nall actions, and to do promptly, or cause to be done, all things necessary, \nproper or advisable under applicable laws and regulations to consummate and \nmake effective the transactions contemplated hereby, to obtain all necessary \nwaivers, consents, assignments and approvals, to effect all necessary \nregistrations and filings, and to remove any injunctions or other impediments \nor delays, legal or otherwise, to consummate and make effective the \ntransactions contemplated by this Agreement for the purpose of securing to \nthe parties hereto the benefits contemplated by this Agreement; PROVIDED, \nthat Healtheon shall not be required to agree to any divestiture by Healtheon \nor the Company or any of Healtheon's subsidiaries or affiliates of equity \ninterests or of any business, assets or property of Healtheon or its \nsubsidiaries or affiliates or the Company or its affiliates, or the \nimposition of any material limitation on the ability of any of them to \nconduct their businesses or to own or exercise control of such assets, \nproperties and stock.\n\n     5.8    NOTIFICATION OF CERTAIN MATTERS.  The Company shall give prompt \nnotice to Healtheon, and Healtheon shall give prompt notice to the Company, \nof (i) the occurrence or non-occurrence of any event, the occurrence or \nnon-occurrence of which is likely to cause any representation or warranty of \nthe Company, Healtheon or Acquisition Sub, respectively, contained in this \nAgreement to be untrue or inaccurate at or prior to the Closing and (ii) any \nfailure of the Company or Healtheon, as the case may be, to comply with or \nsatisfy any covenant, condition or agreement to be complied with or satisfied \nby it hereunder; provided, however, that the delivery of any notice pursuant \nto this Section 5.9 shall not limit or otherwise affect any remedies \navailable to the party receiving such notice.\n\n     5.9    CERTAIN BENEFIT PLANS.  Healtheon shall take such reasonable \nactions as are necessary to allow eligible employees of the Company to \nparticipate in the benefit programs of Healtheon, or alternative benefits \nprograms substantially comparable to those applicable to employees of \nHealtheon on similar terms, as soon as practicable after the Closing.\n\n     5.10   ADDITIONAL DOCUMENTS AND FURTHER ASSURANCES.  Each party hereto, \nat the request of the other party hereto, shall execute and deliver such \nother instruments and do and perform such other acts and things as \n\n\n                                      -34-\n\n\n\n\nmay be necessary or desirable for effecting completely the consummation of \nthis Agreement and the transactions contemplated hereby.\n\n     5.11   COMPANY'S AUDITORS.  The Company will use its commercially \nreasonable efforts to cause its management and its independent auditors to \nfacilitate on a timely basis (i) the review of any Company audit or review \nwork papers for up to the past three years, including the examination of \nselected interim financial statements and data and (ii) the delivery of such \nrepresentations from the Company's independent accountants as may be \nreasonably requested by Healtheon or its accountants to enable Healtheon's \naccountants to render the opinion called for by Section 6.3(j) hereof. \n\n     5.12   MUTUAL RELEASE.  The Company shall use its commercially \nreasonable best efforts with and Netsource Communications, Inc. (\"Netsource\") \nto enter into a mutual settlement and release with Netsource  relating to any \nand all disputes arising from or related to the transactions contemplated by \nthe Asset Purchase Agreement among Netsource, the Company and Edward Fotsch, \nM.D. dated March 20, 1997.  \n\n                                      ARTICLE VI\n\n                           CONDITIONS TO THE ASSET PURCHASE\n\n     6.1    CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE ASSET \nPURCHASE.  The respective obligations of each party to this Agreement to \neffect the Asset Purchase shall be subject to the satisfaction at or prior to \nthe Closing of the following conditions:\n\n            (a)    COMPANY MEMBER APPROVAL.  This Agreement and the Asset \nPurchase shall have been approved and adopted by the Members of the Company \nby the requisite vote under applicable law and the Company's Organizational \nDocuments.  \n\n            (b)    CALIFORNIA PERMIT.  The Commissioner of Corporations for \nthe State of California shall have approved the terms and conditions of the \ntransactions contemplated by this Agreement, and the fairness of such terms \nand conditions pursuant to Section 25142 of the California Corporations Code \n(\"CALIFORNIA CODE\") following a hearing for such purpose, and shall have \nissued a Permit under Section 25121 of the California Code.\n\n            (c)    NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY.  No temporary \nrestraining order, preliminary or permanent injunction or other order issued \nby any court of competent jurisdiction or other legal or regulatory restraint \nor prohibition preventing the consummation of the Asset Purchase shall be in \neffect.\n\n            (d)    TAX OPINIONS.  Healtheon and the Company shall each have \nreceived substantially identical written opinions from their counsel in form \nand substance reasonably satisfactory to them, to the effect that the Asset \nPurchase will constitute a reorganization within the meaning of Section \n368(a) of the Code.  The parties to this Agreement agree to make reasonable \nrepresentations as requested by such counsel for the purpose of rendering \nsuch opinions.\n\n            (e)    PERMITS.  All approvals from government authorities, \nincluding any requisite Blue Sky approvals, which are appropriate or \nnecessary for the consummation of the Asset Purchase, shall have been \nobtained.\n\n\n                                      -35-\n\n\n\n\n            (f)    LITIGATION.  There shall be no BONA FIDE action, suit, \nclaim or proceeding of any nature pending, or overtly threatened, against \nHealtheon or the Company, their respective properties or any of their \nofficers or directors, arising out of, or in any way connected with, the \nAsset Purchase or other transactions contemplated by the terms of this \nAgreement.\n\n     6.2    ADDITIONAL CONDITIONS TO OBLIGATIONS OF THE COMPANY.  The \nobligations of the Company to consummate the Asset Purchase and the \ntransactions contemplated by this Agreement shall be subject to the \nsatisfaction at or prior to the Closing of each of the following conditions, \nany of which may be waived, in writing, exclusively by the Company:\n\n            (a)    REPRESENTATIONS AND WARRANTIES.  The representations and \nwarranties of Healtheon and Acquisition Sub contained in this Agreement shall \nbe true and correct in all material respects on and as of the Closing Date, \nexcept for changes contemplated by this Agreement and except for those \nrepresentations and warranties which address matters only as of a particular \ndate (which shall remain true and correct as of such date), with the same \nforce and effect as if made on and as of the Closing Date, except, in all \nsuch cases, for such breaches, inaccuracies or omissions of such \nrepresentations and warranties which have neither had nor reasonably would be \nexpected to have a Material Adverse Effect on Healtheon; and the Company \nshall have received a certificate to such effect signed on behalf of \nHealtheon by a duly authorized officer of Healtheon.\n\n            (b)    AGREEMENTS AND COVENANTS.  Healtheon and Acquisition Sub \nshall have performed or complied in all material respects with all agreements \nand covenants required by this Agreement to be performed or complied with by \nthem on or prior to the Closing, and the Company shall have received a \ncertificate to such effect signed by a duly authorized officer of Healtheon.\n\n            (c)    THIRD PARTY CONSENTS.  The Company shall have been \nfurnished with evidence satisfactory to it that Healtheon has obtained the \nconsents, approvals, assignments and waivers set forth in Schedule 6.2(c).\n\n            (d)    LEGAL OPINION.  The Company shall have received a legal \nopinion from Wilson Sonsini Goodrich &amp; Rosati, Professional Corporation, \ncounsel to Healtheon, in substantially the form attached hereto as EXHIBIT C.\n\n            (e)    MATERIAL ADVERSE CHANGE.  There shall not have occurred \nany material adverse change in the business, assets (including intangible \nassets), liabilities, financial condition or results of operations of \nHealtheon since the date of the Balance Sheet.\n\n            (f)    HEALTHEON CAPITALIZATION. At the Closing, Healtheon shall \nhave only a single class of Common Stock outstanding and shall have no other \nclass or series of capital stock issued or outstanding.\n\n     6.3    ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF HEALTHEON AND \nACQUISITION SUB.  The obligations of Healtheon and Acquisition Sub to \nconsummate the Asset Purchase and the transactions contemplated by this \nAgreement shall be subject to the satisfaction at or prior to the Closing of \neach of the following conditions, any of which may be waived, in writing, \nexclusively by Healtheon:\n\n            (a)    REPRESENTATIONS AND WARRANTIES.  The representations and \nwarranties of the Company contained in this Agreement shall be true and \ncorrect in all material respects on and as of the Closing Date, except for \nchanges contemplated by this Agreement and except for those representations \nand warranties which address \n\n\n                                      -36-\n\n\n\n\nmatters only as of a particular date (which shall remain true and correct as \nof such date), with the same force and effect as if made on and as of the \nClosing Date, except, in all such cases, for such breaches, inaccuracies or \nomissions of such representations and warranties which have neither had nor \nreasonably would be expected to have a Material Adverse Effect on the Company \nor Healtheon; and Healtheon and Acquisition Sub shall have received a \ncertificate to such effect signed on behalf of the Company by the chief \nexecutive officer and chief financial officer of the Company;\n\n            (b)    AGREEMENTS AND COVENANTS.  The Company shall have \nperformed or complied in all material respects with all agreements and \ncovenants required by this Agreement to be performed or complied with by it \non or prior to the Closing, and Healtheon and Acquisition Sub shall have \nreceived a certificate to such effect signed by a duly authorized officer of \nthe Company;\n\n            (c)    THIRD PARTY CONSENTS.  Healtheon shall have been furnished \nwith evidence satisfactory to it that the Company has obtained the consents, \napprovals and waivers set forth in Schedule 6.3(c).\n\n            (d)    LEGAL OPINION.  Healtheon shall have received a legal \nopinion from Cooley Godward LLP, legal counsel to the Company, in \nsubstantially the form attached hereto as EXHIBIT D.\n\n            (e)    MATERIAL ADVERSE CHANGE.  There shall not have occurred \nany material adverse change in the business, assets (including intangible \nassets) financial condition or results of operations of the Company since the \ndate of the Company Balance Sheet.\n\n            (f)    NONCOMPETITION AGREEMENTS.  Each of the persons listed on \nSchedule 6.3(g) shall have executed and delivered to Healtheon a \nNoncompetition Agreement in substantially the form of EXHIBIT E, and all of \nthe Noncompetition Agreements shall be in full force and effect.\n\n            (g)    NO DISSENTERS.  Holders of more than 10% of the \noutstanding units of Company Capital Stock shall not have exercised, nor \nshall they have any continued right to exercise, appraisal, dissenters' or \nsimilar rights under applicable law with respect to their shares by virtue of \nthe Asset Purchase.\n\n            (h)    EMPLOYMENT AGREEMENTS.  Edward J. Fotsch, M.D., Deb Del \nGuidice, Fel Bautista, Jeff Nelson and Terry McMann shall have entered into \nan Employment Agreement in form and substance reasonably satisfactory to \nHealtheon.\n\n            (i)    MEMBER LOANS.  At the Closing, all loans from Members of \nthe Company (\"Member Loans\") shall have been repaid or canceled.  \n\n            (j)    STOCK TRANSFER AGREEMENTS.  The Company and each Member of \nthe Company shall have entered into an agreement providing for the \nrestriction on sales of Healtheon Common Stock received in connection with \nthis transaction until 180 days after completion of a public offering of \nHealtheon Common Stock pursuant to a registration statement filed with and \ndeclared effective by the Securities and Exchange Commission; provided, \nhowever, that no Member shall be required to sign such agreement unless \nHealtheon's executive officers and directors sign similar agreements.\n\n            (k)    BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT.  The \nCompany shall have delivered the Bill of Sale and the parties hereto shall \nhave entered into the Assignment and Assumption Agreement. \n\n\n                                      -37-\n\n\n\n\n                                     ARTICLE VII\n\n                  SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ESCROW\n\n     7.1    SURVIVAL OF REPRESENTATIONS AND WARRANTIES.  All of the\nrepresentations and warranties of the Company, Healtheon and Acquisition Sub\ncontained in this Agreement or in any instrument delivered pursuant to this\nAgreement (each as modified by the corresponding Schedules thereto) shall\nsurvive the Asset Purchase and continue until 5:00 p.m., California time, on the\ndate which is one year following the date of this Agreement (the \"EXPIRATION\nDATE\").\n\n     7.2    ESCROW ARRANGEMENTS AND INDEMNIFICATION.\n\n            (a)    ESCROW FUND AND INDEMNIFICATION.  At the Closing, the Company\nwill be deemed to have received and deposited with the Escrow Agent (as defined\nbelow) the Escrow Amount (plus any additional shares as may be issued upon any\nstock split, stock dividend or recapitalization effected by Healtheon after the\nClosing).  As soon as practicable after the Closing, the Escrow Amount will be\ndeposited with U.S. Bank Trust National Association, (or other institution\nacceptable to Healtheon and the Securityholder Agent (as defined in\nSection 7.2(g) below)) as Escrow Agent (the \"ESCROW AGENT\"), such deposit to\nconstitute an escrow fund (the \"ESCROW FUND\") to be governed by the terms set\nforth herein and at Healtheon's cost and expense.  The Escrow Fund shall be\navailable to compensate Healtheon, Acquisition Sub and their affiliates for any\nclaims, losses, liabilities, damages, deficiencies, costs and expenses,\nincluding reasonable attorneys' fees and expenses, and expenses of investigation\nand defense (hereinafter individually a \"LOSS\" and collectively \"LOSSES\")\nincurred by Healtheon, Acquisition Sub, their officers, directors, or affiliates\ndirectly or indirectly as a result of (a) any inaccuracy or breach of a\nrepresentation or warranty of the Company contained in Article II herein (as\nmodified by the Company Schedules), or any failure by the Company to perform or\ncomply with any covenant contained herein and (b) any Loss arising out of a\nclaim by Netsource or any trustee in bankruptcy or creditor relating the Asset\nPurchase Agreement dated March 20, 1997 (the \"Netsource Agreement\").  Healtheon\nand the Company each acknowledge that such Losses, if any, would relate to\nunresolved contingencies existing at the Closing, which if resolved at the\nClosing would have led to a reduction in the aggregate consideration.  Nothing\nherein shall limit the liability of the Company for any breach of any\nrepresentation, warranty or covenant if the Asset Purchase does not close. \nHealtheon may not receive any shares from the Escrow Fund unless and until\nOfficer's Certificates (as defined in paragraph (d) below) identifying Losses,\nthe aggregate amount of which exceed $50,000, which, for purposes of aggregating\nsuch amount, shall not include the value of any Healtheon shares transferred to\nNetsource, have been delivered to the Escrow Agent as provided in paragraph (e);\nin such case, Healtheon may recover from the Escrow Fund the total of its\nLosses, including the first $50,000; provided, however, in the event that such\nLosses arise from, or relate to, Retained Liabilities of the Company, Healtheon\nshall be entitled to immediate indemnification from the Company without regard\nto such $50,000 threshold.  The indemnification provisions in this Section 7.2\nshall be the sole remedy and recourse of Healtheon against the Company or any of\nits respective directors, officers, representatives, agents or Members for any\nLosses incurred by Healtheon; PROVIDED, HOWEVER, that nothing herein shall limit\nany remedy for fraud.\n\n            (b)    ESCROW PERIOD; DISTRIBUTION UPON TERMINATION OF ESCROW\nPERIODS.  Subject to the following requirements, the Escrow Fund shall be in\nexistence immediately following the Closing and shall terminate at 5:00 p.m.,\nCalifornia time, on the later to occur of (i) the first anniversary of the\nClosing and (ii) [the final resolution of all claim, made by or on behalf of\nNetsource and relating to the Netsource Agreement] (the \"ESCROW PERIOD\");\nPROVIDED, that the Escrow Period shall not terminate with respect to such amount\n(or some portion thereof), that together with the aggregate amount remaining in\nthe Escrow Fund is necessary  in the\n\n                                -38-\n\n\nreasonable judgment of Healtheon, subject to the objection of the \nSecurityholder Agent and the subsequent arbitration of the matter in the \nmanner provided in Section 7.2(f) hereof, to satisfy any unsatisfied claims \nconcerning facts and circumstances existing prior to the termination of such \nEscrow Period specified in any Officer's Certificate delivered to the Escrow \nAgent prior to termination of such Escrow Period.  As soon as all such claims \nhave been resolved, the Escrow Agent shall deliver to the Company, or its \ntransferees, the remaining portion of the Escrow Fund not required to satisfy \nsuch claims.  Deliveries of Escrow Amounts to the Members of the Company \npursuant to this Section 7.2(b) shall be made in proportion to their \nrespective original contributions to the Escrow Fund.\n\n            (c)    PROTECTION OF ESCROW FUND.  \n\n                   (i)    The Escrow Agent shall hold and safeguard the Escrow\nFund during the Escrow Period, shall treat such fund as a trust fund in\naccordance with the terms of this Agreement and not as the property of Healtheon\nand shall hold and dispose of the Escrow Fund only in accordance with the terms\nhereof.\n\n                   (ii)   Any shares of Healtheon Common Stock or other equity\nsecurities issued or distributed by Healtheon (including shares issued upon a\nstock split) (\"NEW SHARES\") in respect of Healtheon Common Stock in the Escrow\nFund which have not been released from the Escrow Fund shall be added to the\nEscrow Fund and become a part thereof.  New Shares issued in respect of shares\nof Healtheon Common Stock which have been released from the Escrow Fund shall\nnot be added to the Escrow Fund but shall be distributed to the recordholders\nthereof.  Cash dividends on Healtheon Common Stock shall not be added to the\nEscrow Fund but shall be distributed to the recordholders thereof.\n\n                   (iii)  The Company shall have voting rights with respect to\nthe shares of Healtheon Common Stock contributed to the Escrow Fund (and on any\nvoting securities added to the Escrow Fund in respect of such shares of\nHealtheon Common Stock).\n\n            (d)    CLAIMS UPON ESCROW FUND. \n\n                   (i)    Upon receipt by the Escrow Agent at any time on or\nbefore the last day of the Escrow Period of a certificate signed by any officer\nof Healtheon (an \"OFFICER'S CERTIFICATE\"): (A) stating that Healtheon has paid\nor properly accrued or reasonably anticipates that it will have to pay or accrue\nLosses, and (B) specifying in reasonable detail the individual items of Losses\nincluded in the amount so stated, the date each such item was paid or properly\naccrued, or the basis for such anticipated liability, and the nature of the\nmisrepresentation, breach of warranty or covenant to which such item is related,\nthe Escrow Agent shall, subject to the provisions of Section 7.2(e) hereof,\ndeliver to Healtheon out of the Escrow Fund, as promptly as practicable, shares\nof Healtheon Common Stock held in the Escrow Fund in an amount equal to such\nLosses.\n\n                   (ii)   For the purposes of determining the number of shares\nof Healtheon Common Stock to be delivered to Healtheon out of the Escrow Fund\npursuant to Section 7.2(d)(i) hereof, the value of the shares of Healtheon\nCommon Stock shall be deemed to be equal to $5.20 per share of Healtheon Common\nStock.\n\n            (e)    OBJECTIONS TO CLAIMS.  At the time of delivery of any\nOfficer's Certificate to the Escrow Agent, a duplicate copy of such certificate\nshall be delivered to the Securityholder Agent and for a period of thirty (30)\ndays after such delivery, the Escrow Agent shall make no delivery to Healtheon\nof any Escrow Amounts pursuant to Section 7.2(d) hereof unless the Escrow Agent\nshall have received written authorization from the Securityholder Agent to make\nsuch delivery.  After the expiration of such thirty (30) day period, the Escrow\n\n                                     -39-\n\n\nAgent shall make delivery of shares of Healtheon Common Stock from the Escrow\nFund in accordance with Section 7.2(d) hereof; PROVIDED, that no such payment or\ndelivery may be made if the Securityholder Agent shall object in a written\nstatement to the claim made in the Officer's Certificate, and such statement\nshall have been delivered to the Escrow Agent prior to the expiration of such\nthirty (30) day period.\n\n            (f)    RESOLUTION OF CONFLICTS; ARBITRATION.\n\n                   (i)    In case the Securityholder Agent shall so object in\nwriting to any claim or claims made in any Officer's Certificate, the\nSecurityholder Agent and Healtheon shall attempt in good faith to agree upon the\nrights of the respective parties with respect to each of such claims.  If the\nSecurityholder Agent and Healtheon should so agree, a memorandum setting forth\nsuch agreement shall be prepared and signed by both parties and shall be\nfurnished to the Escrow Agent.  The Escrow Agent shall be entitled to rely on\nany such memorandum and distribute shares of Healtheon Common Stock from the\nEscrow Fund in accordance with the terms thereof.\n\n                   (ii)   If no such agreement can be reached after good faith\nnegotiation, either Healtheon or the Securityholder Agent may demand arbitration\nof the matter unless the amount of the damage or loss is at issue in pending\nlitigation with a third party, in which event arbitration shall not be commenced\nuntil such amount is ascertained or both parties agree to arbitration; and in\neither such event the matter shall be settled by arbitration conducted by three\narbitrators.  Healtheon and the Securityholder Agent shall each select one\narbitrator, and the two arbitrators so selected shall select a third arbitrator.\nThe arbitrators shall set a limited time period and establish procedures\ndesigned to reduce the cost and time for discovery while allowing the parties an\nopportunity, adequate in the sole judgment of the arbitrators, to discover\nrelevant information from the opposing parties about the subject matter of the\ndispute.  The arbitrators shall rule upon motions to compel or limit discovery\nand shall have the authority to impose sanctions, including attorneys' fees and\ncosts, to the extent as a court of competent law or equity, should the\narbitrators determine that discovery was sought without substantial\njustification or that discovery was refused or objected to without substantial\njustification.  The decision of a majority of the three arbitrators as to the\nvalidity and amount of any claim in such Officer's Certificate shall be binding\nand conclusive upon the parties to this Agreement, and notwithstanding anything\nin Section 7.2(e) hereof, the Escrow Agent shall be entitled to act in\naccordance with such decision and make or withhold payments out of the Escrow\nFund in accordance therewith.  Such decision shall be written and shall be\nsupported by written findings of fact and conclusions which shall set forth the\naward, judgment, decree or order awarded by the arbitrators.\n\n                   (iii)   Judgment upon any award rendered by the arbitrators\nmay be entered in any court having jurisdiction.  Any such arbitration shall be\nheld in Santa Clara County, California under the rules then in effect of the\nAmerican Arbitration Association.  For purposes of this Section 7.2(f), in any\narbitration hereunder in which any claim or the amount thereof stated in the\nOfficer's Certificate is at issue, Healtheon shall be deemed to be the\nNon-Prevailing Party in the event that the arbitrators award Healtheon less than\nthe sum of one-half (1\/2) of the disputed amount plus any amounts not in\ndispute; otherwise, the Members of the Company as represented by the\nSecurityholder Agent shall be deemed to be the Non-Prevailing Party.  The\nNon-Prevailing Party to an arbitration shall pay its own expenses, the fees of\neach arbitrator, the administrative costs of the arbitration and the expenses,\nincluding without limitation, reasonable attorneys' fees and costs, incurred by\nthe other party to the arbitration.\n\n            (g)    SECURITYHOLDER AGENT OF THE MEMBERS; POWER OF ATTORNEY.\n\n                                     -40-\n\n\n                   (i)    In the event that the Asset Purchase is approved,\neffective upon such vote, and without further act of any Member, Edward Fotsch,\nM.D. shall be appointed as agent and attorney-in-fact (the \"SECURITYHOLDER\nAGENT\") for the Company to give and receive notices and communications, to\nauthorize delivery to Healtheon of shares of Healtheon Common Stock from the\nEscrow Fund in satisfaction of claims by Healtheon, to object to such\ndeliveries, to agree to, negotiate, enter into settlements and compromises of,\nand demand arbitration and comply with orders of courts and awards of\narbitrators with respect to such claims, and to take all actions necessary or\nappropriate in the judgment of Securityholder Agent for the accomplishment of\nthe foregoing.  Such agency may be changed by the Company from time to time upon\nnot less than thirty (30) days prior written notice to Healtheon; PROVIDED that\nthe Securityholder Agent may not be removed unless holders of a two-thirds\ninterest of the Escrow Fund agree to such removal and to the identity of the\nsubstituted agent.  Any vacancy in the position of Securityholder Agent may be\nfilled by approval of the holders of a majority in interest of the Escrow Fund. \nNo bond shall be required of the Securityholder Agent, and the Securityholder\nAgent shall not receive compensation for his or her services.  Notices or\ncommunications to or from the Securityholder Agent shall constitute notice to or\nfrom the Company.\n\n                   (ii)   The Securityholder Agent shall not be liable for any\nact done or omitted hereunder as Securityholder Agent while acting in good faith\nand in the exercise of reasonable judgment.  The Members of the Company and the\nCompany shall severally indemnify the Securityholder Agent and hold the\nSecurityholder Agent harmless against any loss, liability or expense incurred\nwithout negligence or bad faith on the part of the Securityholder Agent and\narising out of or in connection with the acceptance or administration of the\nSecurityholder Agent's duties hereunder, including the reasonable fees and\nexpenses of any legal counsel retained by the Securityholder Agent.\n\n            (h)    ACTIONS OF THE SECURITYHOLDER AGENT.  A decision, act,\nconsent or instruction of the Securityholder Agent shall constitute a decision\nof the holders in interest in the Escrow Fund and shall be final, binding and\nconclusive upon each of each such holder, and the Escrow Agent and Healtheon may\nrely upon any such decision, act, consent or instruction of the Securityholder\nAgent as being the decision, act, consent or instruction of each and every such\nholder.  The Escrow Agent and Healtheon are hereby relieved from any liability\nto any person for any acts done by them in accordance with such decision, act,\nconsent or instruction of the Securityholder Agent.\n\n            (i)    THIRD-PARTY CLAIMS.  In the event Healtheon becomes aware of\na third-party claim which Healtheon believes may result in a demand against the\nEscrow Fund, Healtheon shall notify the Securityholder Agent of such claim, and\nthe Securityholder Agent, as representative for the Company, shall be entitled,\nat their expense, to participate in any defense of such claim.  Healtheon shall\nhave the right in its sole discretion to settle any such claim; PROVIDED,\nHOWEVER, that except with the consent of the Securityholder Agent, no settlement\nof any such claim with third-party claimants shall alone be determinative of the\namount of any claim against the Escrow Fund.  In the event that the\nSecurityholder Agent has consented to any such settlement, the Securityholder\nAgent shall have no power or authority to object under any provision of this\nArticle VII to the amount of any claim by Healtheon against the Escrow Fund with\nrespect to such settlement.\n\n            (j)    ESCROW AGENT'S DUTIES.\n\n                   (i)    The Escrow Agent shall be obligated only for the\nperformance of such duties as are specifically set forth herein, and as set\nforth in any additional written escrow instructions which the Escrow Agent may\nreceive after the date of this Agreement which are signed by an officer of\nHealtheon and the Securityholder Agent, and may rely and shall be protected in\nrelying or refraining from acting on any instrument\n\n                                 -41-\n\n\n\nreasonably believed to be genuine and to have been signed or presented by the \nproper party or parties. The Escrow Agent shall not be liable for any act \ndone or omitted hereunder as Escrow Agent while acting in good faith and in \nthe exercise of reasonable judgment, and any act done or omitted pursuant to \nthe advice of counsel shall be conclusive evidence of such good faith.\n\n                   (ii)   The Escrow Agent is hereby expressly authorized to\ncomply with and obey orders, judgments or decrees of any court of law,\nnotwithstanding any notices, warnings or other communications from any party or\nany other person to the contrary.  In case the Escrow Agent obeys or complies\nwith any such order, judgment or decree of any court, the Escrow Agent shall not\nbe liable to any of the parties hereto or to any other person by reason of such\ncompliance, notwithstanding any such order, judgment or decree being\nsubsequently reversed, modified, annulled, set aside, vacated or found to have\nbeen entered without jurisdiction.\n\n                   (iii)  The Escrow Agent shall not be liable in any respect on\naccount of the identity, authority or rights of the parties executing or\ndelivering or purporting to execute or deliver this Agreement or any documents\nor papers deposited or called for hereunder.\n\n                   (iv)   The Escrow Agent shall not be liable for the\nexpiration of any rights under any statute of limitations with respect to this\nAgreement or any documents deposited with the Escrow Agent.\n\n                   (v)    In performing any duties under the Agreement, the\nEscrow Agent shall not be liable to any party for damages, losses, or expenses,\nexcept for gross negligence or willful misconduct on the part of the Escrow\nAgent.  The Escrow Agent shall not incur any such liability for (A) any act or\nfailure to act made or omitted in good faith, or (B) any action taken or omitted\nin reliance upon any instrument, including any written statement or affidavit\nprovided for in this Agreement that the Escrow Agent shall in good faith believe\nto be genuine, nor will the Escrow Agent be liable or responsible for forgeries,\nfraud, impersonations, or determining the scope of any representative authority.\nIn addition, the Escrow Agent may consult with the legal counsel in connection\nwith Escrow Agent's duties under this Agreement and shall be fully protected in\nany act taken, suffered, or permitted by him\/her in good faith in accordance\nwith the advice of counsel.  The Escrow Agent is not responsible for determining\nand verifying the authority of any person acting or purporting to act on behalf\nof any party to this Agreement.\n\n                   (vi)   If any controversy arises between the parties to this\nAgreement, or with any other party, concerning the subject matter of this\nAgreement, its terms or conditions, the Escrow Agent will not be required to\ndetermine the controversy or to take any action regarding it.  The Escrow Agent\nmay hold all documents and shares of Healtheon Common Stock and may wait for\nsettlement of any such controversy by final appropriate legal proceedings or\nother means as, in the Escrow Agent's discretion, the Escrow Agent may be\nrequired, despite what may be set forth elsewhere in this Agreement.  In such\nevent, the Escrow Agent will not be liable for damage.  Furthermore, the Escrow\nAgent may at its option, file an action of interpleader requiring the parties to\nanswer and litigate any claims and rights among themselves.  The Escrow Agent is\nauthorized to deposit with the clerk of the court all documents and shares of\nHealtheon Common Stock held in escrow, except all cost, expenses, charges and\nreasonable attorney fees incurred by the Escrow Agent due to the interpleader\naction and which the parties jointly and severally agree to pay.  Upon\ninitiating such action, the Escrow Agent shall be fully released and discharged\nof and from all obligations and liability imposed by the terms of this\nAgreement.\n\n                   (vii)  The parties and their respective successors and\nassigns agree jointly and severally to indemnify and hold Escrow Agent harmless\nagainst any and all losses, claims, damages, liabilities, and\n\n                               -42-\n\n\n\nexpenses, including reasonable costs of investigation, counsel fees, and \ndisbursements that may be imposed on Escrow Agent or incurred by Escrow Agent \nin connection with the performance of his\/her duties under this Agreement, \nincluding but not limited to any litigation arising from this Agreement or \ninvolving its subject matter.\n\n                   (viii) The Escrow Agent may resign at any time upon giving at\nleast thirty (30) days written notice to the parties; PROVIDED, HOWEVER, that no\nsuch resignation shall become effective until the appointment of a successor\nescrow agent which shall be accomplished as follows:  the parties shall use\ntheir best efforts to mutually agree on a successor escrow agent within thirty\n(30) days after receiving such notice.  If the parties fail to agree upon a\nsuccessor escrow agent within such time, the Escrow Agent shall have the right\nto appoint a successor escrow agent authorized to do business in the State of\nCalifornia.  The successor escrow agent shall execute and deliver an instrument\naccepting such appointment and it shall, without further acts, be vested with\nall the estates, properties, rights, powers, and duties of the predecessor\nescrow agent as if originally named as escrow agent.  The Escrow Agent shall be\ndischarged from any further duties and liability under this Agreement.\n\n            (k)    FEES.  All fees of the Escrow Agent for performance of its\nduties hereunder shall be paid by Healtheon.  It is understood that the fees and\nusual charges agreed upon for services of the Escrow Agent shall be considered\ncompensation for ordinary services as contemplated by this Agreement.  In the\nevent that the conditions of this Agreement are not promptly fulfilled, or if\nthe Escrow Agent renders any service not provided for in this Agreement, or if\nthe parties request a substantial modification of its terms, or if any\ncontroversy arises, or if the Escrow Agent is made a party to, or intervenes in,\nany litigation pertaining to this escrow or its subject matter, the Escrow Agent\nshall be reasonably compensated for such extraordinary services and reimbursed\nfor all costs, attorney's fees, and expenses occasioned by such default, delay,\ncontroversy or litigation.  Healtheon promises to pay these sums upon demand.\n\n     7.3    INDEMNIFICATION BY HEALTHEON AND ACQUISITION SUB.\n\n            (a)    SCOPE OF INDEMNIFICATION.  Subject to the limitations set\nforth in this Section 7.3, Healtheon will indemnify and hold harmless for any\nLosses (as defined in Section 7.2(a) above) incurred by the Company directly or\nindirectly as a result of any inaccuracy or breach of a representation or\nwarranty of Healtheon or Acquisition Sub contained in Article III herein (as\nmodified by the Healtheon and Acquisition Sub Schedules), or any failure by\nHealtheon or Acquisition Sub to perform or comply with any covenant contained\nherein.  Healtheon and the Company each acknowledge that such Losses, if any,\nwould relate to unresolved contingencies existing at the Closing, which if\nresolved at the Closing would have led to an increase in the aggregate Asset\nPurchase consideration.  Nothing herein shall limit the liability of the\nHealtheon for any breach of any representation, warranty or covenant if the\nAsset Purchase does not close.   The indemnification provisions in this\nSection 7.3 shall be the sole remedy and recourse of the Company against\nHealtheon or any of its respective directors, officers, representatives, agents,\nshareholders or subsidiaries for any Losses incurred by such Indemnified\nMembers; PROVIDED, HOWEVER, that nothing herein shall limit any remedy for\nfraud.\n\n            (b)    LIMITATION OF LIABILITY.  The maximum aggregate liability of\nHealtheon with respect to the indemnification provided in this Section 7.3 shall\nbe limited solely to the number of newly issued shares of Healtheon Common Stock\nequal to the Escrow Amount.  Healtheon shall not be obligated to issue any\nshares of Healtheon Common Stock to the Company unless and until the\nSecurityholder Agent, on behalf of the Company, delivers a certificate\n(\"SECURITYHOLDER CERTIFICATE\") that identifies Losses, the aggregate amount of\nwhich exceed $50,000; in such case, the Company shall be entitled to shares of\nHealtheon Common Stock for the total of its Losses, including the first $50,000.\n\n                                 -43-\n\n\n            (c)    PROCEDURE FOR INDEMNIFICATION.  The Company shall give\nwritten notice to Healtheon of its claim for indemnification as promptly as\npracticable whenever the Securityholder Agent shall have determined that there\nare facts or circumstances which render or would reasonably and forseeably\nrender Healtheon liable for indemnification under this Section 7.3; PROVIDED,\nHOWEVER, that the failure to give a timely notice of a claim for indemnification\nshall not limit the indemnification obligations of Healtheon. The notice shall\nset forth in reasonable detail the basis for the claim, the nature of the Losses\nand the monetary amount thereof. \n\n            (d)    VALUE OF HEALTHEON COMMON STOCK.  For the purposes of\ndetermining the number of shares of Healtheon Common Stock to be delivered to\nthe Company in satisfaction of Healtheon's indemnity obligations under this\nSection 7.3, the value of the shares of Healtheon Common Stock shall be deemed\nto be $5.20 per share of Healtheon Common Stock.\n\n            (e)    THIRD-PARTY BENEFICIARY.  Each of the parties to this\nAgreement specifically intends that the benefits of the indemnification\nprovisions of this Section 7.3 shall accrue to the Company and that the Company\nand its authorized representatives shall be entitled to take any necessary\naction to enforce the remedy set forth in this Section 7.3.     \n\n\n                                     ARTICLE VIII\n\n                          TERMINATION, AMENDMENT AND WAIVER\n\n     8.1    TERMINATION.  Except as provided in Section 8.2 below, this\nAgreement may be terminated and the Asset Purchase abandoned at any time prior\nto the Closing:\n\n            (a)    by mutual consent of the Company and Healtheon;\n\n            (b)    by Healtheon or the Company if:  (i) the Closing has not\noccurred before 5:00 p.m. (Pacific time) on August 15, 1998 (provided that the\nright to terminate this Agreement under this clause 8.1(b)(i) shall not be\navailable to any party whose willful failure to fulfill any obligation hereunder\nhas been the cause of, or resulted in, the failure of the Closing to occur on or\nbefore such date); (ii) there shall be a final nonappealable order of a federal\nor state court in effect preventing consummation of the Asset Purchase; or\n(iii) there shall be any statute, rule, regulation or order enacted, promulgated\nor issued or deemed applicable to the Asset Purchase by any governmental entity\nthat would make consummation of the Asset Purchase illegal; \n\n            (c)    by Healtheon if there shall be any action taken, or any\nstatute, rule, regulation or order enacted, promulgated or issued or deemed\napplicable to the Asset Purchase, by any Governmental Entity, which would:  (i)\nprohibit Healtheon's or the Company's ownership or operation of all or any\nportion of the business of the Company or (ii) compel Healtheon or the Company\nto dispose of or hold separate all or a portion of the business or assets of the\nCompany or Healtheon as a result of the Asset Purchase;\n\n            (d)    by Healtheon if it is not in material breach of its\nobligations under this Agreement and there has been a breach of any\nrepresentation, warranty, covenant or agreement contained in this Agreement on\nthe part of the Company and (i) such breach has not been cured within five (5)\nbusiness days after written notice to the Company (provided that, no cure period\nshall be required for a breach which by its nature cannot be cured), and (ii) as\na result of such breach the conditions set forth in Section 6.3(a) or 6.3(b), as\nthe case may be, would not then be satisfied; or\n\n                               -44-\n\n\n            (e)    by the Company if it is not in material breach of its\nobligations under this Agreement and there has been a breach of any\nrepresentation, warranty, covenant or agreement contained in this Agreement on\nthe part of Healtheon or Acquisition Sub and (i) such breach has not been cured\nwithin five (5) business days after written notice to Healtheon (provided that,\nno cure period shall be required for a breach which by its nature cannot be\ncured), and (ii) as a result of such breach the conditions set forth in Section\n6.2(a) or 6.2(b), as the case may be, would not then be satisfied.\n\nWhere action is taken to terminate this Agreement pursuant to this Section 8.1,\nit shall be sufficient for such action to be authorized by the Board of\nDirectors (as applicable) of the party taking such action.\n\n     8.2    EFFECT OF TERMINATION.  In the event of termination of this\nAgreement as provided in Section 8.1, this Agreement shall forthwith become void\nand there shall be no liability or obligation on the part of Healtheon,\nAcquisition Sub or the Company, or their respective officers, directors,\nshareholders or Members; PROVIDED, that each party shall remain liable for any\nbreaches of this Agreement prior to its termination; and PROVIDED FURTHER, that,\nthe provisions of Sections 5.3 and 5.4 and Article VIII of this Agreement shall\nremain in full force and effect and survive any termination of this Agreement.\n\n     8.3    AMENDMENT.  Except as is otherwise required by applicable law after\nthe Members of the Company approve this Agreement, this Agreement may be amended\nby the parties hereto at any time by execution of an instrument in writing\nsigned on behalf of each of the parties hereto.\n\n     8.4    EXTENSION; WAIVER.  At any time prior to the Closing, Healtheon and\nAcquisition Sub, on the one hand, and the Company, on the other, may, to the\nextent legally allowed, (i) extend the time for the performance of any of the\nobligations of the other party hereto, (ii) waive any inaccuracies in the\nrepresentations and warranties made to such party contained herein or in any\ndocument delivered pursuant hereto, and (iii) waive compliance with any of the\nagreements or conditions for the benefit of such party contained herein.  Any\nagreement on the part of a party hereto to any such extension or waiver shall be\nvalid only if set forth in an instrument in writing signed on behalf of such\nparty.\n\n\n                                      ARTICLE IX\n\n                                  GENERAL PROVISIONS\n\n     9.1    NOTICES.  All notices and other communications hereunder shall be in\nwriting and shall be deemed given if delivered personally or by commercial\ndelivery service, or mailed by registered or certified mail (return receipt\nrequested) or sent via facsimile (with acknowledgment of complete transmission)\nto the parties at the following addresses (or at such other address for a party\nas shall be specified by like notice):\n\n            (i)    if to Healtheon or Acquisition Sub, to:\n\n                   Healtheon Corporation\n                   4600 Patrick Henry Drive\n                   Santa Clara, CA  95054\n                   Attention:  W. Michael Long\n                   Telephone No.:  (408) 876-5000\n                   Facsimile No.: (408) 876-5010\n\n                              -45-\n\n\n                   with a copy to:\n\n                   Wilson Sonsini Goodrich &amp; Rosati, P.C.\n                   650 Page Mill Road\n                   Palo Alto, California 94304\n                   Attention:  Steven E. Bochner, Esq.\n                   Telephone No.:  (650) 493-9300\n                   Facsimile No.:  (650) 493-6811\n\n            (ii)   if to the Company, to:\n\n                   Metis, LLC\n                   444 Spear Street, Suite 205\n                   San Francisco, CA  94105\n                   Attention: Edward Fotsch, M.D.\n                   Telephone No.:  (415) 537-7400\n                   Facsimile No.: (415) 357-5919\n\n                   with a copy to:\n                   \n                   Cooley Godward LLP\n                   One Maritime Plaza, 20th Floor\n                   San Francisco, CA  94111\n                   Attention: Peter M. Wong\n                   Telephone No.:  (415) 693-2198\n                   Facsimile No.:  (415) 951-3699\n\n            (c)    if to the Securityholder Agent:\n\n                   ------------------------------\n                   ------------------------------\n                   ------------------------------\n\n            (d)    if to the Escrow Agent:\n\n                   U.S. Bank Trust National Association\n\n                   San Francisco, CA\n                   Attention:  Cora Murphy\n                   Telephone No.:  (415) 273-4534\n                   Facsimile No.:  (415) 273-4593\n\n     9.2    INTERPRETATION.  The words \"include,\" \"includes\" and \"including\"\nwhen used herein shall be deemed in each case to be followed by the words\n\"without limitation.\"  The table of contents and headings contained in this\nAgreement are for reference purposes only and shall not affect in any way the\nmeaning or interpretation of this Agreement.\n\n                                -46-\n\n\n\n     9.3    COUNTERPARTS.  This Agreement may be executed in one or more\ncounterparts, all of which shall be considered one and the same agreement and\nshall become effective when one or more counterparts have been signed by each of\nthe parties and delivered to the other party, it being understood that all\nparties need not sign the same counterpart.\n\n\n     9.4    TRANSFER TAXES.  The Company shall pay all real property transfer\nTaxes, sales Taxes, stock transfer Taxes, documentary stamp Taxes, recording\ncharges and other similar Taxes resulting from, arising under or in connection\nwith the transfer of the Purchased Assets or any other related transaction under\nthe Agreement.\n\n     9.5    ENTIRE AGREEMENT; ASSIGNMENT.  This Agreement, the Schedules and\nExhibits hereto, and the documents and instruments and other agreements among\nthe parties hereto referenced herein:  (a) constitute the entire agreement among\nthe parties with respect to the subject matter hereof and supersede all prior\nagreements and understandings, both written and oral, among the parties with\nrespect to the subject matter hereof; (b) are not intended to confer upon any\nother person any rights or remedies hereunder; and (c) shall not be assigned by\noperation of law or otherwise except as otherwise specifically provided, except\nthat Healtheon and Acquisition Sub may assign their respective rights and\ndelegate their respective obligations hereunder to their respective affiliates;\nPROVIDED, that such affiliates agree to be bound by the terms hereof, including\nwithout limitation, the provisions of 6.3(k) hereof.\n\n     9.6    SEVERABILITY.  In the event that any provision of this Agreement or\nthe application thereof, becomes or is declared by a court of competent\njurisdiction to be illegal, void or unenforceable, the remainder of this\nAgreement will continue in full force and effect and the application of such\nprovision to other persons or circumstances will be interpreted so as reasonably\nto effect the intent of the parties hereto.  The parties further agree to\nreplace such void or unenforceable provision of this Agreement with a valid and\nenforceable provision that will achieve, to the extent possible, the economic,\nbusiness and other purposes of such void or unenforceable provision.\n\n     9.7    OTHER REMEDIES.  Except as otherwise provided herein, any and all\nremedies herein expressly conferred upon a party will be deemed cumulative with\nand not exclusive of any other remedy conferred hereby, or by law or equity upon\nsuch party, and the exercise by a party of any one remedy will not preclude the\nexercise of any other remedy.\n\n     9.8    GOVERNING LAW.  This Agreement shall be governed by and construed in\naccordance with the laws of the State of California, regardless of the laws that\nmight otherwise govern under applicable principles of conflicts of laws thereof.\nEach of the parties hereto agrees that process may be served upon them in any\nmanner authorized by the laws of the State of California for such persons and\nwaives and covenants not to assert or plead any objection which they might\notherwise have to such jurisdiction and such process.\n\n     9.9    RULES OF CONSTRUCTION.  The parties hereto agree that they have been\nrepresented by counsel during the negotiation and execution of this Agreement\nand, therefore, waive the application of any law, regulation, holding or rule of\nconstruction providing that ambiguities in an agreement or other document will\nbe construed against the party drafting such agreement or document.\n\n     9.10   SPECIFIC PERFORMANCE.  The parties hereto agree that irreparable\ndamage would occur in the event that any of the provisions of this Agreement\nwere not performed in accordance with their specific terms or were otherwise\nbreached.  It is accordingly agreed that the parties shall be entitled to an\ninjunction or injunctions to\n\n                               -47-\n\n\n\nprevent breaches of this Agreement and to enforce specifically the terms and \nprovisions hereof in any court of the United States or any state having \njurisdiction, this being in addition to any other remedy to which they are \nentitled at law or in equity.\n\n\n                                 -48-\n\n\n\n\n     IN WITNESS WHEREOF, Healtheon, Acquisition Sub and the Company and, with\nrespect to Article VII, the Securityholder Agent and Escrow Agent, have caused\nthis Agreement to be signed by their duly authorized respective officers and\nrepresentatives, all as of the date first written above.\n\nMETIS, LLC                                     HEALTHEON CORPORATION\n\n\nBy:  \/s\/ Edward Fotsch                         By:    \/s\/ W. Michael Long  \n     -----------------------------                    -------------------------\n     Name:                                            Name:\n     Title:                                           Title:\n\n\n\nSECURITYHOLDER AGENT:                          METIS ACQUISITION CORP.\n\n\n\nBy:  \/s\/ Edward Fotsch                         By:    \/s\/ W. Michael Long  \n     ----------------------------                     -------------------------\n     Name:                                            Name:\n                                                      Title:\n\n\n\nESCROW AGENT\n\n\nBy:  \/s\/ Ann Gadsby                                          \n     ----------------------------\n     Name: Ann Gadsby\n     Title: Vice President\n\n\n\n\n                           ***ASSET PURCHASE AGREEMENT***\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7750],"corporate_contracts_industries":[9510],"corporate_contracts_types":[9623,9622],"class_list":["post-43295","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-healtheon-corp","corporate_contracts_industries-technology__programming","corporate_contracts_types-planning__asset","corporate_contracts_types-planning"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43295","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43295"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43295"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43295"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43295"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}