{"id":43519,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/purchase-agreement-medscape-inc-and-healthcare-communications.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"purchase-agreement-medscape-inc-and-healthcare-communications","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/planning\/purchase-agreement-medscape-inc-and-healthcare-communications.html","title":{"rendered":"Purchase Agreement &#8211; Medscape Inc. and Healthcare Communications Group LLC"},"content":{"rendered":"<pre>\n                               PURCHASE AGREEMENT\n\n                                     between\n\n                                 MEDSCAPE, INC.\n\n                                       and\n\n                      the holders of all of the membership\n\n                                  interests of\n\n                     HEALTHCARE COMMUNICATIONS GROUP, L.L.C.\n\n                          Dated as of October 27, 1998\n\n\n   2\n\n                                TABLE OF CONTENTS\n\nARTICLE I   Purchase and Sale of the Interests...............................2\n      1.1   Purchase and Sale................................................2\n      1.2   Purchase Price...................................................2\n      1.3   Closing..........................................................3\n      1.4   Sellers' Representative..........................................4\n\nARTICLE II  Representations and Warranties of the Sellers....................5\n      2.1   Organization; Standing and Power; Business of the Company........5\n      2.2   No Conflicts.....................................................5\n      2.3   Capitalization...................................................6\n      2.4   Right to Transfer................................................7\n      2.5   Binding Effect...................................................7\n      2.6   Other Equity Interests...........................................8\n      2.7   Financial Statements, Books and Records and Accounts Receivable..8\n      2.8   Taxes............................................................9\n      2.9   Legal Proceedings...............................................10\n      2.10  Labor and Employee Benefit Matters..............................11\n      2.11  Compliance with Laws............................................16\n      2.12  Insurance.......................................................16\n      2.13  Contracts.......................................................17\n      2.14  Affiliate Transactions..........................................18\n      2.15  Properties......................................................19\n      2.16  Information Technology..........................................19\n      2.17  Data and Intellectual Property..................................20\n      2.18  Bank Accounts...................................................20\n      2.19  Website Traffic.................................................20\n      2.20  Absence of Certain Changes......................................21\n      2.21  Relationship with Advertisers, Suppliers and Customers..........23\n      2.22  Undisclosed Liabilities.........................................23\n      2.23  Finder's Fees...................................................24\n      2.24  No Material Omissions...........................................24\n\nARTICLE III Representations and Warranties of the Purchaser.................25\n      3.1   Organization; Standing and Power; Business of the Purchaser.....25\n      3.2   No Conflicts....................................................25\n      3.3   Capitalization..................................................26\n      3.4   Due Authorization of the Shares.................................26\n      3.5   Binding Effect..................................................27\n      3.6   Other Equity Interests..........................................27\n      3.7   Financial Statements, Books and Records and Accounts\n            Receivable......................................................27\n      3.8   Taxes...........................................................28\n      3.9   Legal Proceedings...............................................29\n\n\n   3\n\n      3.10  Labor and Employee Benefit Matters..............................30\n      3.11  Compliance with Laws............................................34\n      3.12  Insurance.......................................................34\n      3.13  Contracts.......................................................34\n      3.14  Properties......................................................34\n      3.15  Intellectual Property...........................................35\n      3.16  Website Traffic.................................................35\n      3.17  Absence of Certain Changes......................................35\n      3.18  Relationship with Advertisers, Suppliers and Customers..........36\n      3.19  Undisclosed Liabilities.........................................36\n      3.20  Finder's Fees...................................................37\n      3.21  No Material Omissions...........................................37\n\nARTICLE IV  Covenants.......................................................38\n      4.1   The Sellers' Confidentiality Obligations........................38\n      4.2   No Solicitation of Employees or Consultants, Non-Interference...39\n      4.3   Taxes...........................................................41\n      4.4   Covenant Not to Compete.........................................41\n      4.5   Tax Matters.....................................................42\n\nARTICLE V   Conditions to Obligations.......................................44\n      5.1   Conditions to Sellers' Obligations..............................44\n      5.2   Conditions to the Purchaser's Obligations.......................45\n\nARTICLE VI  Indemnification.................................................47\n      6.1   Indemnification by Sellers......................................47\n      6.2   Indemnification by the Purchaser................................48\n      6.3   Indemnity Procedure for Third Party Claims......................48\n      6.4   Tax Indemnification.............................................50\n      6.5   Waiver of Right to Contribution.................................51\n      6.6   Sole Remedy.....................................................51\n\nARTICLE VII Miscellaneous...................................................51\n      7.1   Expenses........................................................51\n      7.2   Interpretation..................................................51\n      7.3   Further Assurances..............................................52\n      7.4   Amendment and Waiver............................................52\n      7.5   Notice..........................................................52\n      7.6   Survival of Representations, Warranties and Covenants...........53\n      7.7   Binding Agreement; Assignment...................................54\n      7.8   Severability....................................................55\n      7.9   Captions........................................................55\n      7.10  Counterparts....................................................55\n      7.11  Governing Law...................................................55\n      7.12  Remedies........................................................56\n\n\n   4\n\n      7.13  Public Announcements............................................57\n      7.14  Entire Agreement; Termination of All Prior Agreements\n            Between Company and Sellers.....................................57\n\n\n   5\n\n                               INDEX TO EXHIBITS\n\n      Exhibit A               Amended and Restated Stockholders Agreement\n\n      Exhibit B               Form of Employment Agreement with Jeffrey\n                              Drezner, M.D., Ph.D.\n\n\n   6\n\n                              INDEX TO SCHEDULES\n\n      HCG Schedules:\n\n      Schedule 1.1      -     Interest in HCG to be sold by each Seller\n      Schedule 1.2(a)   -     Portion of Cash Purchase Price Payable\n                              to each Seller\n      Schedule 1.2(b)   -     Number of Medscape Shares Deliverable\n                              to each Seller\n      Schedule 2.1      -     Description of Business of HCG\n      Schedule 2.7(a)   -     HCG Balance Sheets\n      Schedule 2.7(b)   -     HCG Income Statements\n      Schedule 2.8      -     Taxes - HCG\n      Schedule 2.9      -     Legal Proceedings - HCG\n      Schedule 2.10     -     Labor and Employee Benefit Matters - HCG\n      Schedule 2.11     -     Violations of Law - HCG\n      Schedule 2.12     -     Insurance - HCG\n      Schedule 2.13     -     Contracts - HCG\n      Schedule 2.14     -     Affiliate Transactions - HCG\n      Schedule 2.15     -     Real Property - HCG\n      Schedule 2.16     -     Information Technology - HCG\n      Schedule 2.17     -     Data and Intellectual Property - HCG\n      Schedule 2.18     -     Bank Accounts - HCG\n      Schedule 2.20     -     Adverse Changes - HCG\n      Schedule 2.21     -     Major Customers of HCG; Relationship with\n                              Customers and Suppliers\n      Schedule 2.22     -     Undisclosed Liabilities - HCG\n\n      Medscape Schedules:\n\n      Schedule 3.1      -     Description of Medscape Business\n      Schedule 3.3      -     Capitalization of Medscape\n      Schedule 3.7(a)   -     Medscape Balance Sheets\n      Schedule 3.7(b)   -     Medscape Income Statements\n      Schedule 3.8      -     Taxes - Medscape\n      Schedule 3.9      -     Legal Proceedings - Medscape\n      Schedule 3.10     -     Labor and Employee Benefit Matters - Medscape\n      Schedule 3.11     -     Violations of Law - Medscape\n      Schedule 3.14     -     Real Property Leasehold Interests - Medscape\n      Schedule 3.15     -     Intellectual Property - Medscape\n      Schedule 3.17     -     Adverse Changes - Medscape\n      Schedule 3.18     -     Relations with Customers and Suppliers - Medscape\n      Schedule 3.19     -     Undisclosed Liabilities - Medscape\n\n\n   7\n\n                               PURCHASE AGREEMENT\n\n            THIS PURCHASE AGREEMENT (this \"Agreement\"), dated as of October ___,\n1998, by and between MEDSCAPE, INC., a New York corporation with offices at 134\nWest 29th Street, New York, New York 10001 (the \"Purchaser\"), and each of the\nindividuals listed on the signature page hereto (each, a \"Seller\" and,\ncollectively, the \"Sellers\"),\n\n                             W I T N E S S E T H :\n\n            WHEREAS, the Sellers own collectively all of the issued and\noutstanding membership interests of HEALTHCARE COMMUNICATIONS GROUP, L.L.C., a\nMaryland limited liability company (the \"Company\");\n\n            WHEREAS, the Purchaser desires to purchase from the Sellers, and the\nSellers desire to sell to the Purchaser, all of the issued and outstanding\nmembership interests of the Company;\n\n            NOW THEREFORE, in consideration of the mutual promises hereinafter\nset forth, and for other good and valuable consideration, the receipt and\nadequacy of which are hereby acknowledged, the parties hereto, intending to be\nlegally bound, agree as follows:\n\n\n   8\n\n                                    ARTICLE I\n\n                       Purchase and Sale of the Interests\n\n            1.1 Purchase and Sale. At the Closing (as defined in Section 1.3\nhereof) and upon the terms and subject to the conditions of this Agreement, the\nSellers shall sell to the Purchaser, and the Purchaser shall purchase from the\nSellers, all (but not less than all) of the membership interests of the Company\n(the \"Interests\"). In order to accomplish such transaction, each Seller shall\nsell to the Purchaser the Interests set forth opposite such Seller's name on\nSchedule 1.1 hereto.\n\n            1.2 Purchase Price. At the Closing, in consideration of the sale of\nthe Interests by the Sellers:\n\n            (a) Cash Purchase Price. The Purchaser shall pay to the Sellers, in\nthe manner set forth in Section 1.4 hereof, the aggregate sum of One Million\nSeventy- Five Thousand ($1,075,000) Dollars (the \"Cash Purchase Price\") in cash.\nThe portion of the Cash Purchase Price payable to each Seller shall be the\namount set forth opposite such Seller's name on Schedule 1.2(a) hereto.\n\n            (b) In Kind Purchase Price. The Purchaser shall issue and deliver to\nthe Sellers an aggregate of 730,174 shares (the \"Shares\") of the Purchaser's\nnon-voting Class B Common Stock (the \"In Kind Purchase Price\"). The Purchaser\nand the Sellers agree that the Shares have a fair market value of $0.86 per\nshare as of the date of this Agreement and agree to report for Tax purposes\nconsistent with this valuation. The portion of the Shares deliverable to each\nSeller shall be as set forth on Schedule 1.2(b) hereto.\n\n\n                                       2\n\n   9\n\n            1.3 Closing. The closing of the sale and purchase of the Interests\n(the \"Closing\") shall take place at the offices of Patterson, Belknap, Webb &amp; Tyler LLP, 1133 Avenue of the Americas, New York, New York, at 10:00 a.m. on the\ndate hereof (the \"Closing Date\"). At the Closing,\n\n            (a) the Purchaser shall:\n\n                  (i) pay to the Sellers the Cash Purchase Price in immediately\navailable funds by wire transfer to payment accounts designated by the Sellers'\nRepresentative (as defined in Section 1.4 below);\n\n                  (ii) pay the In Kind Purchase Price by delivering to each\nSeller the number of Shares set forth opposite such Seller's name on Schedule\n1.2(b) hereof;\n\n                  (iii) deliver to the Sellers' Representative the certificates\nof an executive officer of the Purchaser described in Sections 5.1(a) and (b)\nhereof;\n\n                  (iv) deliver to the Sellers' Representative an amended and\nrestated stockholders' agreement (the \"Amended and Restated Stockholders'\nAgreement\"), duly executed by all parties thereto necessary to effect the\namendments therein other than the Sellers, in the form attached hereto as\nExhibit A; and\n\n                  (v) deliver to the Sellers such other documents as the\nSellers' Representative or the Sellers' counsel may reasonably request to\ndemonstrate satisfaction of the conditions and compliance with the covenants set\nforth in this Agreement; and\n\n            (b) each of the Sellers shall deliver, or cause to be delivered, to\nthe Purchaser:\n\n\n                                       3\n\n   10\n\n                  (i) instruments of transfer, assignment and conveyance in form\nand substance satisfactory to the Purchaser and its counsel, evidencing the sale\nof the Interests to the Purchaser;\n\n                  (ii) the certificates of the Sellers' Representative described\nin Sections 5.2(a) and (b) hereof;\n\n                  (iii) the Amended and Restated Stockholders' Agreement, duly\nexecuted by each of the Sellers; and\n\n                  (iv) such other documents as the Purchaser or its counsel may\nreasonably request to demonstrate satisfaction of the conditions and compliance\nwith the covenants set forth in this Agreement.\n\n            1.4 Sellers' Representative. Each of the Sellers hereby constitutes\nand appoints Jeffrey L. Drezner, M.D., Ph.D., as the representative and\nattorney-in-fact of such Seller (the \"Sellers' Representative\") with full power\nand authority to act for all Sellers under this Agreement including to do and\nperform such acts as are specifically required by this Agreement to be performed\nby the Sellers' Representative. The Sellers' Representative shall not be liable\nto any other Seller for any actions taken by him pursuant to this power of\nattorney except in the case of his willful misconduct. The Sellers'\nRepresentative may, on behalf of all Sellers, execute amendments to this\nAgreement or waivers of any of the provisions hereof; provided that any such\namendment or waiver does not adversely affect one or more Sellers in a manner\nwhich is materially different than each other Seller. This power of attorney\nshall be deemed coupled with an interest, shall survive and not be affected by\nthe bankruptcy or disability of any Seller, and shall extend to each Seller's\nsuccessors.\n\n\n                                       4\n\n   11\n\n                                   ARTICLE II\n\n                  Representations and Warranties of the Sellers\n\n            Each of the Sellers, severally with respect to Sections 2.4 and 2.5,\nand jointly and severally with respect to all other sections of this Article II,\nhereby represents and warrants to the Purchaser as follows:\n\n            2.1 Organization; Standing and Power; Business of the Company. The\nCompany is a limited liability company duly organized, validly existing and in\ngood standing under the laws of the State of Maryland, with all requisite\nlimited liability company power and authority and all governmental licenses,\nauthorizations, consents and approvals required to own its properties and to\nconduct its business as presently conducted and as presently proposed to be\nconducted. The Sellers' Representative has delivered to the Purchaser true,\ncorrect and complete copies of the limited liability company agreement of the\nCompany, including all amendments (the \"LLC Agreement\") and the Certificate of\nFormation of the Company. The business of the Company consists solely of the\nbusiness described on Schedule 2.1 hereto and related activities (the\n\"Business\"). The Company was formed on November 17, 1995.\n\n            2.2 No Conflicts. The execution, delivery and performance by such\nSeller of this Agreement, the consummation of the transactions contemplated\nhereby and compliance by such Seller with the terms hereof will not (a) violate,\nconflict with, cause an event of default under, give rise to a right of\ntermination, cancellation or acceleration of any right or obligation of the\nCompany under, or result in the creation or imposition of any lien, mortgage,\nsecurity interest, charge, encumbrance or restriction (a \"Lien\") on any asset of\nthe Company or on any Interest under any agreement, \n\n\n                                       5\n\n   12\n\ninstrument, license, franchise, judgment, order, law, rule or regulation by\nwhich such Seller or the Company is bound or to which the Company's property is\nsubject, or (b) violate or conflict with the LLC Agreement or Certificate of\nFormation of the Company.\n\n            2.3 Capitalization.\n\n            The only equity interests in the Company are the Interests. The\nInterests are valid membership interests entitled to the rights, powers and\nprivileges set forth in the LLC Agreement. Except for the obligations set forth\nin this Agreement, no party has any right or obligation to purchase or sell, or\nany option or similar right to purchase, any membership interest in the Company.\nThe Interests are freely transferable to the Purchaser pursuant to the terms of\nthis Agreement. The Company has not issued any securities other than the\nInterests. The Interests were not issued in violation of any federal or state\nsecurities law or any other legal requirement. Other than this Agreement, there\nare no outstanding subscriptions, rights, options, warrants, conversion rights,\nagreements or other claims for the purchase or acquisition from the Company or\nany Seller of any membership interests of the Company or any other securities of\nthe Company or obligating the Company to issue, repurchase or otherwise acquire\nany membership interests of the Company or any other securities of the Company\nor any securities convertible into, exercisable or exchangeable for, or\notherwise entitling the holder to acquire any membership interests of the\nCompany or any other securities of the Company.\n\n            2.4 Right to Transfer. Such Seller now has, and will have at\nClosing, good and valid legal title to the Interest set forth opposite such\nSeller's name on\n\n\n                                       6\n\n   13\n\nSchedule 1.1 hereto and full beneficial ownership thereof and full legal right\nand power to transfer and deliver to the Purchaser such Interest in the manner\nprovided in this Agreement, and upon the purchase of such Interest pursuant to\nthe terms of this Agreement, the Purchaser will receive good and valid legal\ntitle thereto and full beneficial ownership thereof, free and clear of all\nLiens, restrictions, encumbrances and rights of others of any kind other than\nthose created or permitted by the Purchaser.\n\n            2.5 Binding Effect. Such Seller has all requisite capacity and\nauthority to execute this Agreement and to consummate the transactions\ncontemplated hereby and thereby. This Agreement has been duly executed and\ndelivered by such Seller. The execution and delivery of this Agreement by the\nSellers and the consummation of the transactions contemplated hereby by the\nSellers do not and will not require the approval of any other party. Assuming\nthe due execution and delivery of this Agreement by the Purchaser, this\nAgreement constitutes a valid and binding obligation of such Seller, enforceable\nagainst such Seller in accordance with its terms subject to applicable\nbankruptcy, insolvency, moratorium and other similar laws relating to the\nenforcement of creditor's rights generally, the availability of equitable\nremedies and to general equity principles.\n\n            2.6 Other Equity Interests. The Company does not have, and has not\nhad at any time, any direct or indirect equity interest in any other\ncorporation, partnership, joint venture, limited liability company or other\nentity or any commitment to acquire any such equity interest.\n\n            2.7 Financial Statements, Books and Records and Accounts Receivable.\n\n\n                                       7\n\n   14\n\n            (a) The unaudited balance sheet of the Company as of December 31,\n1997 and the unaudited balance sheet (the \"HCG Interim Balance Sheet\") of the\nCompany as of September 30, 1998 (the \"HCG Interim Date\"), annexed hereto as\nSchedule 2.7(a) (collectively the \"HCG Balance Sheets\") have been prepared from\nthe books and records of the Company and fairly present in all material respects\nthe financial position of the Company as of the respective dates thereof in\nconformity with generally accepted accounting principles consistently applied\n(\"GAAP\") (except as noted on Schedule 2.7(a)), and include all adjustments\nrequired for a fair presentation.\n\n            (b) The unaudited statement of income of the Company for the year\nended December 31, 1997 and the unaudited statement of income for the Company\nfor the nine months ended September 30, 1998, annexed hereto as Schedule 2.7(b)\n(collectively the \"HCG Income Statements\" and, together with the HCG Balance\nSheets, the \"HCG Financial Statements\") have been prepared from the books and\nrecords of the Company and fairly present in all material respects the results\nof operations of the Company for the periods covered thereby in conformity with\nGAAP (except as noted on Schedule 2.7(b)), and include all adjustments required\nfor a fair presentation.\n\n            (c) The books of account, membership interest record books, and\nother records of the Company, all of which have been made available to the\nPurchaser by the Sellers, are true, correct and complete.\n\n            2.8 Taxes. Except as set forth on Schedule 2.8, (a) the Company has\ntimely paid and will timely pay all Taxes (as defined below) required to be paid\non or before the Closing Date by the Company for all periods up to and including\nthe Closing Date, has accrued for all Taxes for all periods up to and including\nthe Closing Date\n\n\n                                       8\n\n   15\n\nwhich Taxes are not required to be paid on or before the Closing Date, has\ntimely withheld or collected and will timely withhold or collect all Taxes\nrequired to be withheld or collected on or before the Closing Date by the\nCompany for all periods up to and including the Closing Date, has timely\ndeposited and will timely deposit all Taxes required to be deposited on or\nbefore the Closing Date by the Company for all periods up to and including the\nClosing Date, and has timely filed and will timely file all material Tax returns\nrequired to be filed on or before the Closing Date by the Company with respect\nto such Taxes for all periods up to and including the Closing Date and each such\nreturn was or will be when filed true, correct and complete in all material\nrespects, (b) to the knowledge of such Seller, no notice of any proposed\nadjustment or notice of underpayment has been issued by any Governmental Entity\n(as hereinafter defined) with respect to any such Taxes, (c) to the knowledge of\nsuch Seller, no claim has been asserted, proposed or threatened with respect to\nany such Taxes that remain outstanding, (d) no extension of the time for\nassessment of any such Taxes has been requested or granted (other than any such\nextension that is no longer in effect), (e) no protests are pending with respect\nto any such Taxes, (f) there are no Liens for Taxes (except Liens for Taxes not\nyet due) on any assets of the Company, and no action, proceeding or\ninvestigation has been instituted or, to the knowledge of such Seller\nthreatened, against the Company which would give rise to any such Lien and (g)\nto the knowledge of such Seller, no audit, action or proceeding or investigation\nof the Company relating to any Tax is currently ongoing and no audit of the\nCompany relating to any Tax has been undertaken within the preceding five years.\nThe Sellers have provided to the Purchaser all Federal and state income tax\nreturns filed by the Company since January 1, 1995 and will make available any\ndocumentation ancillary\n\n\n                                       9\n\n   16\n\nthereto reasonably requested by the Purchaser. The Company (i) has been filing\nboth Federal and state partnership tax returns to the extent required by law\nsince its inception and (ii) has not elected to be taxed as a corporation for\nthe current or any future tax period. For purposes of this Agreement, \"Tax\"\nmeans any obligation or liability (including any tax, withholding, fee or excise\nimposed by any Governmental Entity (as hereinafter defined), including any gross\nor net income, franchise, employment-related, real or personal property,\ntransfer, intangibles, documentary, gains, sales or use tax, together with any\nand all interest, penalties and additions imposed with respect thereto.\n\n            2.9 Legal Proceedings. Schedule 2.9 sets forth a true, correct and\ncomplete list of all claims, suits, actions, arbitrations, legal, administrative\nand other proceedings, and, to the knowledge of such Seller, governmental\ninvestigations, to which the Company or such Seller is a party or which, to the\nknowledge of such Seller, are specifically applicable to such Seller or the\nCompany or any of its properties, assets, operations or Business or any of the\ntransactions contemplated by this Agreement and which are currently pending or\nwere pending at any time since the date of the Company's formation. To such\nSeller's knowledge, (i) no claim, suit, action, arbitration, proceeding or\ninvestigation of the nature or relating to the matters described in the\npreceding sentence has been threatened and (ii) there is no basis for any suit,\naction, arbitration, proceeding or investigation of such nature or relating to\nsuch matters. Except as described on Schedule 2.9 hereto, neither the Company\nnor such Seller is in default under any judgment, order, writ, injunction or\ndecree of any court, arbitrator, administrative agency or commission or\ngovernmental body, agency, official or authority, domestic or foreign (a\n\"Governmental Entity\") specifically applicable to\n\n\n                                       10\n\n   17\n\nsuch Seller or the Company or any of its properties, assets, operations or\nbusiness, and there is no such judgment, order, writ, injunction or decree of\nany kind in effect enjoining or restraining the Company or any member or officer\nof the Company from taking any action of any kind. To the knowledge of such\nSeller, no material distributed by the Company prior to the Closing Date\ncontains any material that is libelous or an invasion of privacy or infringes\nany similar right of any third party.\n\n            2.10 Labor and Employee Benefit Matters.\n\n            (a) Schedule 2.10 hereto contains a true and complete list of (i)\neach plan, program, policy, payroll practice, contract, agreement or other\narrangement providing for compensation, severance, termination pay, performance\nawards, stock or stock-related awards, fringe benefits or other employee pension\nor welfare benefits of any kind, whether formal or informal, funded or unfunded,\nwritten or oral and whether or not legally binding, which is now sponsored,\nmaintained, contributed to or required to be contributed to, by the Company or\npursuant to which the Company has, or could reasonably be expected to have, any\nliability, including, without limitation, any \"employee benefit plan\" within the\nmeaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,\nas amended (\"ERISA\") (each a \"Benefit Plan\"); and (ii) each management,\nemployment, bonus, option, equity (or equity related), severance, consulting,\nnoncompete, confidentiality or similar agreement or contract currently in effect\nbetween the Company and any current, former or retired employee, officer,\nconsultant, independent contractor, agent or partner of the Company (each an\n\"Employee Agreement\"). The Company does not currently sponsor, maintain,\ncontribute to, nor is it required to contribute to, nor has the Company ever\nsponsored, maintained, contributed to or been required to contribute to, or\nincurred any liability to,\n\n\n                                       11\n\n   18\n\n(i) any \"defined benefit plan\" (as defined in ERISA Section 3(35)), (ii) any\n\"multiemployer plan\" (as defined in ERISA Section 3(37)) or any plan that has\ntwo or more contributing sponsors at least two of whom are not under common\ncontrol (within the meaning of Section 4063 of ERISA), (iii) any plan that is,\nis intended to be, or has ever been treated as a \"qualified plan\" (within the\nmeaning of Section 401(a) of the Code) or any plan that is, is intended to be,\nor has ever been treated as a plan subject to Title IV of ERISA, or (iv) any\nBenefit Plan or Employee Agreement which provides, or has any liability to\nprovide, life insurance, medical, severance or other employee welfare benefits\nto any employee (or spouse or dependent thereof) upon or following the\nemployee's retirement or termination of employment, except as required by\nSection 4980B of the Code or Part 6 of Title I of ERISA.\n\n            (b) The Company is not and has never been (i) a member of a\n\"controlled group of companies,\" under \"common control\" or an \"affiliated\nservice group\" within the meaning of Sections 414(b), (c) or (m) of the Code,\n(ii) required to be aggregated under Section 414(o) of the Code, or (iii) under\n\"common control,\" within the meaning of Section 4001(a)(14) of ERISA, or any\nregulations promulgated or proposed under any of the foregoing sections, in each\ncase with any other entity.\n\n            (c) The Company has provided to the Purchaser accurate and complete\ncopies of all documents embodying or relating to each Benefit Plan and each\nEmployee Agreement, including all amendments thereto, trust or funding\nagreements relating thereto, the two most recent annual reports required under\nERISA, the most recent determination letter received from the Internal Revenue\nService, if any, and the most recent summary plan description (with all material\nmodifications).\n\n\n                                       12\n\n   19\n\n            (d) All contributions required to be made to or with respect to any\nBenefit Plan or Employee Agreement by applicable law or regulation or by any\nplan document or other contractual undertaking, and all premiums due or payable\nwith respect to insurance policies funding any Benefit Plan or Employee\nAgreement, for any period through the Closing Date have been or, as applicable,\nshall be, timely made or paid in full or, to the extent not required to be made\nor paid on or before the Closing Date, shall be fully disclosed on Schedule\n2.10.\n\n            (e) Each Benefit Plan is currently, and has been at all times prior\nto the Closing Date, maintained substantially in accordance with its terms and\nin compliance in all material respects with all applicable laws, statutes,\norders, rules and regulations, including, without limitation, ERISA and the\nCode. There is not now, nor to such Seller's knowledge do any circumstances\nexist that could reasonably be expected to give rise to, any requirement for the\nposting of security with respect to a Benefit Plan or Employee Agreement or the\nimposition of any Lien on the assets of the Company under applicable law,\nincluding, without limitation, ERISA and the Code.\n\n            (f) Except as set forth on Schedule 2.10, the execution of, and\nperformance of the transactions contemplated by, this Agreement will not (either\nalone or upon the occurrence of any additional or subsequent events directly\nrelated to the transactions contemplated by this Agreement) constitute an event\nunder any Benefit Plan or Employee Agreement that will or may result in any\npayment, acceleration, forgiveness of indebtedness, vesting, distribution,\nincrease in benefits or obligations to fund benefits with respect to any\nemployee or former employee or any spouse or dependent thereof.\n\n\n                                       13\n\n   20\n\n            (g) Schedule 2.10 hereto lists all current employees of the Company.\nExcept as set forth on Schedule 2.10, (i) the Company is not delinquent in\npayments to any of its employees for any wages, salaries, commissions, bonuses\nor other direct compensation for any services performed by the date hereof or\namounts required to be reimbursed by them to the date hereof, (ii) the Company\nis in material compliance with all applicable federal, state and local laws,\nrules and regulations respecting employment, employment practices, labor, terms\nand conditions of employment and wages and hours, (iii) the Company is not bound\nby or subject to (and none of its assets or properties is bound by or subject\nto) any written or oral, express or implied, commitment or arrangement with any\nlabor union, and no labor union has requested or has sought to represent any of\nthe employees, representatives or agents of the Company, (iv) there is no labor\nstrike, dispute, slowdown or stoppage actually pending, or, to the knowledge of\nsuch Seller, threatened, against or involving the Company, and (v) to the\nknowledge of such Seller, no salaried key employee has any plans to terminate\nhis or her employment with the Company.\n\n            (h) For purposes of this Section 2.10, the term \"employee\" shall be\nconsidered to include individuals rendering personal services to the Company as\nindependent contractors.\n\n            (i) Schedule 2.10 contains a true, correct and complete list of the\nname of each individual who is employed by the Company on the date hereof along\nwith his or her current job title, base compensation, eligibility for bonus\ncompensation or any other compensation, date of hire, last date and amount of\nincrease in compensation, any employee benefit which is not generally available\nto employees of the Company and employment address. Schedule 2.10 contains a\ntrue, correct and \n\n\n                                       14\n\n   21\n\ncomplete list of persons currently rendering services to the Company, or who\nhave rendered services to the Company since the formation of the Company for\nwhich the Company is obligated to issue a Form 1099, as consultants or\nindependent contractors, along with information regarding compensation and\nreimbursement levels for each such person during all such periods, and each such\nperson who was classified as a consultant or an independent contractor was\nproperly so classified under applicable laws and regulations and no federal,\nstate or local taxes should have been withheld from any payment made to any such\nperson which were not withheld.\n\n            (j) Except as set forth on Schedule 2.10, with respect to each\nBenefit Plan or Employee Agreement, there have been no \"prohibited transactions\"\n(within the meaning of Section 406 of ERISA and Section 4975 of the Code) and no\nfiduciary with respect to any Benefit Plan or Employee Agreement has incurred,\nor to such Seller's knowledge can reasonably be expected to incur, liability for\na breach of fiduciary duty or other failure to act or comply in connection with\nthe administration or investment of the assets of any Benefit Plan. Further, no\naction, suit, proceeding, or hearing, or to such Seller's knowledge,\ninvestigation with respect to any Benefit Plan or Employee Agreement is pending\nor, to the knowledge of such Seller, threatened. None of the members, officers\nor employees of the Company has, nor does such Seller have, any knowledge of any\nexisting circumstances that could reasonably be expected to give rise to any\naction, suit, proceeding, hearing, or investigation involving a Benefit Plan or\nEmployee Agreement.\n\n            2.11 Compliance with Laws. The conduct of the Business complies in\nall material respects with (a) all statutes, laws, regulations, ordinances,\nrules, licenses, judgments, orders or decrees applicable thereto (including\nregulations promulgated by\n\n\n                                       15\n\n   22\n\nthe Food and Drug Administration), including compliance with any government\ncontractor affirmative action plan, if applicable, and (b) the LLC Agreement and\nCertificate of Formation of the Company. Except as set forth on Schedule 2.11,\nthe Company has not received notice of any alleged violation of any statute,\nlaw, regulation, ordinance, rule, judgment, order, decree or license applicable\nthereto or to its properties from any Governmental Entity or other person and\nsuch Seller has no knowledge of any such violation.\n\n            2.12 Insurance. The Company maintains insurance policies with\ninsurers, in such amounts and against such risks of the Company as are customary\nand reasonable for the Business and its assets. Schedule 2.12 lists and\ndescribes briefly all policies of liability, theft, fire, title, workers'\ncompensation and other forms of insurance and surety bonds insuring the Company\nor the employees, properties, assets and Business of the Company. All policies\nlisted in Schedule 2.12 are in full force and effect; no such policy or the\nfuture proceeds thereof has been assigned to any other person; and all premiums\nand other payments due under or on account of any such policy have been paid\nexcept where the failure to make such payment would not result in the\ntermination of any such policy.\n\n            2.13 Contracts. Except as set forth on Schedule 2.13, the Company is\nnot a party to or bound by any written or oral (a) employment or consulting\nagreement; (b) joint venture or partnership contract or agreement; (c) contract\nor agreement restricting the right of the Company to compete with any other\nperson or entity, which would apply after the Closing; (d) any loan agreement,\nindenture, promissory note or conditional sales agreement or any pledge,\nsecurity agreement, deed of trust, financing statement or any other document\ngranting or evidencing a Lien on any assets of the\n\n\n                                       16\n\n   23\n\nCompany; (e) any guarantee, assumption of an obligation for borrowed money or\npurchase money indebtedness or other obligation of reimbursement of any maker of\na letter of credit; (f) contract, agreement or commitment providing for the\npurchase or sale of assets outside the ordinary course of business; (g)\nagreement, contract or commitment relating to capital expenditures in excess of\n$5,000 in any single case or $10,000 in the aggregate; (h) licenses, whether as\nlicensor or licensee, of any material invention (whether patented or not), trade\nsecret, know-how, copyright, trademark or trade name or other intellectual\nproperty, except for pre-packaged software; (i) lease or sublease of, or option\nrelating to, real estate; (j) lease as lessee or lessor of personal property;\n(k) capitalized lease or sale-leaseback; (l) data licensing, distribution,\nsupply or development agreement or Internet or web-site agreement; (m) royalty\nagreement; (n) any revocable or irrevocable power of attorney; (o) software\nagreement, except for pre-packaged software; (p) promotional agreement; (q)\nother contract or agreement entered into other than in the ordinary course of\nbusiness; or (r) other contract or agreement providing for payments to or from\nthe Company in excess of $25,000 in the aggregate or requiring one year or\nlonger to perform. All of the foregoing types of contracts and agreements are\nhereinafter referred to as \"Contracts.\" Except as set forth thereon, each\nContract set forth on Schedule 2.13 is in full force and effect and, to the\nknowledge of such Seller is legal, valid and binding and enforceable against\neach other person or party thereto. Except as set forth on Schedule 2.13, the\nCompany is not nor, to the knowledge of such Seller, is any other party to any\nsuch Contract, in material breach thereof or default thereunder and there does\nnot exist under any provision thereof any event that, with the giving of notice\nor the lapse of time or both, would constitute such a material breach or default\nby the Company or, to the\n\n\n                                       17\n\n   24\n\nknowledge of such Seller, by any other party to any such Contract. Except as set\nforth on Schedule 2.13, the Sellers' Representative has delivered or made\navailable to the Purchaser true, correct and complete copies of each of such\nwritten Contracts or provided summaries of any such oral Contracts.\n\n            2.14 Affiliate Transactions. Except as disclosed in Schedule 2.14,\n(a) neither any Seller nor any of their respective Affiliates has provided or\ncaused to be provided, and does not currently provide or cause to be provided,\nto the Company any assets, services (other than as an employee or partner) or\nfacilities or has made any payments to or on behalf of the Company and (b) the\nCompany has not provided or caused to be provided, and does not currently\nprovide or cause to be provided, to any Seller or any Seller's Affiliates any\nassets, services or facilities or has made any payment (other than member\ndistributions, salary, bonus or business expense reimbursement payments made to\na Seller in the ordinary course of business) to or on behalf of any Seller or\nany Seller's Affiliates. An \"Affiliate\" of any party means any person or entity\ndirectly or indirectly controlling, controlled by or under common control with\nsuch party and shall include any officer, director, member, partner or other\nequity holder of any such entity and the spouse or any issue of a natural person\nor any trust for their benefit. As used in this Agreement, the term \"person\"\nshall mean any individual, corporation, partnership, limited liability company,\njoint venture, trust, business association or other entity, including a\nGovernmental Entity.\n\n            2.15 Properties. Schedule 2.15 contains a true, correct and complete\nlist of all real property leasehold interests of the Company (the \"Leasehold\nInterests\"). The Company has the legal right to possess and quietly enjoy the\nreal property in which it has Leasehold Interests and has received no notice\nfrom any person asserting any\n\n\n                                       18\n\n   25\n\nclaim or right inconsistent therewith. The Company has never owned in fee any\ninterest in real property.\n\n            2.16 Information Technology. Schedule 2.16 set forth a list and\nbrief description of all computer hardware, software and networks used by the\nCompany and identifies which are owned by the Company directly and which are\nlicensed to the Company for use. Except as set forth on Schedule 2.16, the\nCompany has the unrestricted right to use all software associated with its\ndatabases.\n\n            2.17 Data and Intellectual Property.\n\n            (a) Except as set forth in Schedule 2.17, the Company has the\nunrestricted right to use and holds the copyright to all of the data which\ncomprise all of its databases including data taken directly from any and all\nexternal sources as well as derived data.\n\n            (b) Except as set forth on Schedule 2.17, (i) the Company has not\nbeen sued or charged or been a defendant in any claim, suit, action or\nproceeding which involves a claim of infringement of any intellectual property\nrights, (ii) to the knowledge of such Seller, there are no other claims that the\nCompany is infringing any existing patent, trademark or copyright or any basis\nfor any such claim, without regard to whether any such patent, trademark or\ncopyright is ultimately found to be valid, and (iii) to the knowledge of such\nSeller, the use of intellectual property rights in connection with the Business,\nas currently being conducted, does not infringe the patent, trademark, copyright\nor any other right of any third party.\n\n            2.18 Bank Accounts. Schedule 2.18 sets forth a true, correct and\ncomplete list of each bank at which the Company has an account or safe deposit\nbox\n\n\n                                       19\n\n   26\n\nand the address of each such bank, the number of such account or box and the\nname of each individual authorized to draw on or have access thereto.\n\n            2.19 Website Traffic. The website traffic statistics set forth on\nthe report dated October 3, 1998, previously delivered to the Purchaser by the\nCompany are true, correct and complete in all material respects.\n\n            2.20 Absence of Certain Changes. Since the HCG Interim Date, except\nas set forth on Schedule 2.20, the Company has conducted the Business in the\nordinary course and maintained its records and books of account in reasonable\ndetail which accurately and fairly reflect the transactions of the Company in\nall material respects. Since the HCG Interim Date there has not been, except as\ndisclosed on Schedule 2.20:\n\n            (a) Any materially adverse change in the nature of the Business, the\nresults of the Company's operations, the Company's assets, the Company's\nfinancial condition, or the manner of conducting the Business;\n\n            (b) Any damage, destruction or casualty loss (whether or not covered\nby insurance) adversely affecting the Business, the results of operations, the\nassets or the financial condition of the Company or its ability to carry on its\noperations substantially as presently conducted and as proposed to be conducted;\n\n            (c) Any declaration, setting aside or payment of distributions in\nrespect of the Interests;\n\n            (d) Any entering into of any employment agreement, or any increase\nin the compensation payable, or to become payable, by the Company to any of its\nofficers or partners, employees or agents over the rates payable at the Interim\nDate;\n\n\n                                       20\n\n   27\n\n            (e) Any issuance of securities of the Company, including options,\nwarrants or other agreements evidencing or requiring such issuance;\n\n            (f) Any amendment or termination of, default by the Company or, to\nthe knowledge of any Seller, default by any other party under, any contract,\nagreement or license to which the Company is a party and which materially\nadversely affects the Company;\n\n            (g) Any labor dispute or collective labor negotiation involving the\nCompany;\n\n            (h) Any discharge or satisfaction of any lien, encumbrance,\nobligation or liability (accrued, absolute, fixed or contingent) of the Company\nexcept in the ordinary course of business;\n\n            (i) Incurrence by the Company of any obligation or liability\n(accrued, absolute, fixed or contingent) except current liabilities incurred,\nand obligations entered into, in the ordinary course of business and consistent\nwith prior practice (for purposes of this Agreement, the Purchaser and the\nSellers agree that the incurrence of any debt other than normal trade credit\nshall not be in the ordinary course of business);\n\n            (j) Institution of any severance, retirement, bonus, equity option,\nprofit sharing pension plan or similar agreement or changes made in any such\nexisting plans of the Company, other than severance or bonus arrangements with\nemployees of the Company entered into in the ordinary course of business\nconsistent with past practices or as otherwise specifically contemplated hereby;\n\n            (k) Any capital expenditure involving an amount of more than Five\nThousand ($5,000) Dollars in any one instance or an aggregate of more than Ten\nThousand ($10,000) Dollars;\n\n\n                                       21\n\n   28\n\n            (l) Announcement or initiation of any general increase in\ncompensation, bonus, insurance or employee benefits involving employees of the\nCompany;\n\n            (m) Sale or disposition (other than inventory in the ordinary course\nof business), or lease of any property of the Company or mortgage, pledge, or\ngrant or imposition of any Lien on any asset or property of the Company;\n\n            (n) Cancellation or waiver of any claims or rights with a value in\nexcess of Five Thousand ($5,000) Dollars; or\n\n            (o) Any amendment to the LLC Agreement of the Company. \n\n            2.21 Relationship with Advertisers, Suppliers and Customers.\nSchedule 2.21 sets forth a true, correct and complete list of each customer of\nthe Company which represented in excess of five (5%) percent of the Company's\nrevenues in any of the fiscal years ended December 31, 1997 or December 31, 1996\nor which in the good faith judgment of the Sellers is expected to account for in\nexcess of five (5%) percent of the Company's revenues in the fiscal year ended\nDecember 31, 1998, and identifies any such customer which has terminated its\nrelationship with the Company or significantly reduced the volume of business\nconducted by it with the Company since January 1, 1995. Except as described in\nSchedule 2.21, such Seller has no actual knowledge that any significant supplier\nof goods, products or services to the Company, or any significant customer of\nthe Company, (i) has made any material complaint or objection with respect to\nthe service or any business practices of the Company or the transactions\ncontemplated hereby or (ii) will cease to do business, or significantly reduce\nthe business conducted, with the Purchaser with respect to the Business after or\nas a result of the consummation of any transactions contemplated hereby.\n\n\n                                       22\n\n   29\n\n            2.22 Undisclosed Liabilities. Except (a) as disclosed in Schedule\n2.22 or the other Schedules hereto, (b) as and to the extent disclosed or\nreserved against on the HCG Interim Balance Sheet, (c) as incurred after the HCG\nInterim Date in the ordinary course of business consistent with prior practice\nand not prohibited by this Agreement, or (d) as incurred in connection with this\nAgreement or any of the transactions contemplated hereby, the Company does not\nhave any material liabilities or obligations of any nature, absolute, accrued,\ncontingent or otherwise and whether due or to become due required by GAAP to be\nset forth on the HCG Interim Balance Sheet.\n\n            2.23 Finder's Fees. There is no investment banker, broker, finder or\nother intermediary which has been retained by or is authorized to act on behalf\nof the Company or such Seller who would have a claim to any fee or commission\nfrom the Company or such Seller or the Purchaser or any of their respective\nAffiliates in connection with the transactions contemplated by this Agreement.\n\n            2.24 No Material Omissions. Neither this Agreement (including the\nSchedules) nor any certificate delivered pursuant hereto contains any untrue\nstatement of a material fact relating to the Sellers or the Company or omits to\nstate a material fact relating to the Sellers or the Company necessary to make\nthe statements made, in light of the circumstances in which they are made, not\nmisleading. In each case where a representation and warranty is made \"to the\nknowledge\" of any Seller, such Seller has made inquiry of the responsible\nofficer, employee or agent of the Company whose responsibilities with the\nCompany would include those matters which are the subject of the representation\nand warranty.\n\n\n                                       23\n\n   30\n\n                                   ARTICLE III\n\n                 Representations and Warranties of the Purchaser\n\n            The Purchaser represents and warrants to the Sellers as follows:\n\n            3.1 Organization; Standing and Power; Business of the Purchaser. The\nPurchaser is a corporation duly organized, validly existing and in good standing\nunder the laws of the State of New York, with all requisite corporate power and\nauthority and all governmental licenses, authorizations, consents and approvals\nrequired to own its properties and to conduct its business as presently\nconducted and as presently proposed to be conducted. The Purchaser has delivered\nto the Sellers' Representative true, correct and complete copies of the\ncertificate of incorporation of (the \"Charter\") and the Bylaws of the Purchaser.\nThe business of the Purchaser consists solely of the business described on\nSchedule 3.1 hereto and related activities (the \"Medscape Business\").\n\n            3.2 No Conflicts. The execution, delivery and performance by the\nPurchaser of this Agreement, the consummation of the transactions contemplated\nhereby and compliance by the Purchaser with the terms hereof will not (a)\nviolate, conflict with, cause an event of default under, give rise to a right of\ntermination, cancellation or acceleration of any right or obligation of the\nPurchaser under, or result in the creation or imposition of any Lien on any\nasset of the Purchaser or on any Shares under any agreement, instrument,\nLicense, franchise, judgment, order, law, rule or regulation by which the\nPurchaser is bound or to which the Purchaser's property is subject, nor (b)\nviolate or conflict with the Charter or Bylaws of the Purchaser.\n\n\n                                       24\n\n   31\n\n            3.3 Capitalization.\n\n            The capitalization of the Purchaser is as set forth on Schedule 3.3\nhereto. Except for the obligations set forth in this Agreement or as set forth\non Schedule 3.3, no party has any right or obligation to purchase or sell, or\nany option or similar right to purchase, any security of the Purchaser. Other\nthan this Agreement or as set forth on Schedule 3.3, there are no outstanding\nsubscriptions, rights, options, warrants, conversion rights, agreements or other\nclaims for the purchase or acquisition from the Purchaser or any securities of\nthe Purchaser or obligating the Purchaser to issue, repurchase or otherwise\nacquire any securities of the Purchaser or any securities convertible into,\nexercisable or exchangeable for, or otherwise entitling the holder to acquire\nany securities of the Purchaser. The Shares which constitute the In Kind\nPurchase Price represent, on a fully diluted basis as of the date hereof, ten\n(10%) percent of the shares of capital stock of the Purchaser. For these\npurposes \"fully diluted\" is calculated assuming that all shares of the\nPurchaser's preferred stock are converted into shares of the Purchaser's common\nstock at the applicable conversion ratio, all outstanding stock options are\nexercised and options to purchase all additional shares of the Purchaser's\ncommon stock currently reserved under the Medscape Stock Award Plan are made and\nsuch options are exercised but excluding the restricted shares described in\nSection 5.1(f) below. The issuance of the Shares will not trigger any\n\"antidilution\" provision of any existing security of the Purchaser.\n\n            3.4 Due Authorization of the Shares. The issuance, sale and delivery\nof the Shares pursuant to this Agreement have been duly authorized by all\nrequisite corporate action on the part of the Purchaser and when issued, sold\nand delivered in accordance with this Agreement, the Shares will be validly\nissued and outstanding, fully\n\n\n                                       25\n\n   32\n\npaid and non-assessable, free and clear of all Liens, restrictions, encumbrances\nand rights of others of any kind other than those created or permitted by the\nSellers.\n\n            3.5 Binding Effect. The Purchaser has all requisite power and\nauthority to execute this Agreement and to consummate the transactions\ncontemplated hereby and thereby. This Agreement has been duly executed and\ndelivered by the Purchaser. The execution and delivery of this Agreement by the\nPurchaser and the consummation of the transactions contemplated hereby by the\nPurchaser do not and will not require the approval of any other party. Assuming\nthe due execution and delivery of this Agreement by the Sellers, this Agreement\nconstitutes a valid and binding obligation of the Purchaser, enforceable against\nthe Purchaser in accordance with its terms subject to applicable bankruptcy,\ninsolvency, moratorium and other similar laws relating to the enforcement of\ncreditor's rights generally, the availability of equitable remedies and to\ngeneral equity principles.\n\n            3.6 Other Equity Interests. The Purchaser does not have, and has not\nhad at any time, any direct or indirect equity interest in any other\ncorporation, partnership, joint venture, limited liability company or other\nentity or any commitment to acquire any such equity interest.\n\n            3.7 Financial Statements, Books and Records and Accounts Receivable.\n\n            (a) The audited balance sheet of the Purchaser as of December 31,\n1997 and the unaudited balance sheet of the Purchaser (the \"Medscape Interim\nBalance Sheet\") as of September 30, 1998 (the \"Medscape Interim Date\"), annexed\nhereto as Schedule 3.7(a) (collectively the \"Medscape Balance Sheets\") have been\nprepared from the books and records of the Purchaser and fairly present the\nfinancial\n\n\n                                       26\n\n   33\n\nposition of the Purchaser as of the respective dates thereof in conformity with\ngenerally accepted accounting principles consistently applied (\"GAAP\") (except\nas noted on Schedule 3.7(a)), and include all adjustments required for a fair\npresentation.\n\n            (b) The audited statement of income of the Purchaser for the year\nended December 31, 1997 and the unaudited statement of income for the Purchaser\nfor the nine months ended September 30, 1998, annexed hereto as Schedule 3.7(b)\n(collectively the \"Medscape Income Statements\" and, together with the Medscape\nBalance Sheets, the \"Medscape Financial Statements\") have been prepared from the\nbooks and records of the Purchaser and fairly present the results of operations\nof the Purchaser for the periods covered thereby in conformity with GAAP (except\nas noted on Schedule 3.7(b)), and include all adjustments required for a fair\npresentation.\n\n            (c) The books of account, stock record books, and other records of\nthe Purchaser, all of which have been made available to the Sellers'\nRepresentative by the Purchaser, are true, correct and complete.\n\n            3.8 Taxes. Except as set forth on Schedule 3.8, (a) the Purchaser\nhas timely paid and will timely pay all Taxes required to be paid on or before\nthe Closing Date by the Purchaser for all periods up to and including the\nClosing Date, has accrued for all Taxes for all periods up to and including the\nClosing Date which Taxes are not required to be paid on or before the Closing\nDate, has timely withheld or collected and will timely withhold or collect all\nTaxes required to be withheld or collected on or before the Closing Date by the\nPurchaser for all periods up to and including the Closing Date, has timely\ndeposited and will timely deposit all Taxes required to be deposited on or\nbefore the Closing Date by the Purchaser for all periods up to and including the\nClosing Date, and has timely filed and will timely file all material Tax returns\nrequired to be filed\n\n\n                                       27\n\n   34\n\non or before the Closing Date by the Purchaser with respect to such Taxes for\nall periods up to and including the Closing Date and each such return was or\nwill be when filed true, correct and complete in all material respects, (b) to\nthe knowledge of Purchaser, no notice of any proposed adjustment or notice of\nunderpayment has been issued by any Governmental Entity with respect to any such\nTaxes, (c) to the knowledge of Purchaser, no claim has been asserted, proposed\nor threatened with respect to any such Taxes that remain outstanding, (d) no\nextension of the time for assessment of any such Taxes has been requested or\ngranted (other than any such extension that is no longer in effect), (e) no\nprotests are pending with respect to any such Taxes, (f) there are no Liens for\nTaxes (except Liens for Taxes not yet due) on any assets of the Purchaser, and\nno action, proceeding or investigation has been instituted or, to the knowledge\nof the Purchaser threatened, against the Purchaser which would give rise to any\nsuch Lien and (g) to the knowledge of the Purchaser, no audit, action or\nproceeding or investigation of the Purchaser relating to any Tax is currently\nongoing and no audit of the Purchaser relating to any Tax has been undertaken\nwithin the preceding five years.\n\n            3.9 Legal Proceedings. Schedule 3.9 sets forth a true, correct and\ncomplete list of all claims, suits, actions, arbitrations, legal, administrative\nand other proceedings, and, to the knowledge of the Purchaser, governmental\ninvestigations, to which the Purchaser is a party or which, to the knowledge of\nthe Purchaser, are specifically applicable to the Purchaser or any of its\nproperties, assets, operations or the Medscape Business or any of the\ntransactions contemplated by this Agreement and which are currently pending or\nwere pending at any time since January 1, 1995. To the Purchaser's knowledge,\n(i) no claim, suit, action, arbitration, proceeding or investigation\n\n\n                                       28\n\n   35\n\nof the nature or relating to the matters described in the preceding sentence has\nbeen threatened and (ii) there is no basis for any suit, action, arbitration,\nproceeding or investigation of such nature or relating to such matters. Except\nas described on Schedule 3.9 hereto, the Purchaser is not in default under any\njudgment, order, writ, injunction or decree of any Governmental Entity\nspecifically applicable to the Purchaser or any of its properties, assets,\noperations or business, and there is no such judgment, order, writ, injunction\nor decree of any kind in effect enjoining or restraining the Purchaser or any\ndirector or officer of the Purchaser from taking any action of any kind. To the\nknowledge of the Purchaser, no material distributed by the Purchaser prior to\nthe Closing Date contains any material that is libelous or an invasion of\nprivacy or infringes any similar right of any third party.\n\n            3.10 Labor and Employee Benefit Matters.\n\n            (a) Schedule 3.10 hereto contains a true and complete list of (i)\neach plan, program, policy, payroll practice, contract, agreement or other\narrangement providing for compensation, severance, termination pay, performance\nawards, stock or stock-related awards, fringe benefits or other employee pension\nor welfare benefits of any kind, whether formal or informal, funded or unfunded,\nwritten or oral and whether or not legally binding, which is now sponsored,\nmaintained, contributed to or required to be contributed to, by the Purchaser or\npursuant to which the Purchaser has, or could reasonably be expected to have,\nany liability, including, without limitation, any \"employee benefit plan\" within\nthe meaning of Section 3(3) of the Employee Retirement Income Security Act of\n1974, as amended (\"ERISA\") (each a \"Medscape Benefit Plan\"); and (ii) each\nmanagement, employment, bonus, option, equity (or equity related), severance,\nconsulting, noncompete, confidentiality or similar agreement or contract\n\n\n                                       29\n\n   36\n\ncurrently in effect between the Purchaser and any current, former or retired\nemployee, officer, consultant, independent contractor, agent or partner of the\nCompany (each a \"Medscape Employee Agreement\"). The Purchaser does not currently\nsponsor, maintain, contribute to, nor is it required to contribute to, nor has\nthe Purchaser ever sponsored, maintained, contributed to or been required to\ncontribute to, or incurred any liability to, (i) any \"defined benefit plan\" (as\ndefined in ERISA Section 3(35)), (ii) except as described on Schedule 3.10, any\n\"multiemployer plan\" (as defined in ERISA Section 3(37)) or any plan that has\ntwo or more contributing sponsors at least two of whom are not under common\ncontrol (within the meaning of Section 4063 of ERISA), (iii) any plan that is,\nis intended to be, or has ever been treated as a \"qualified plan\" (within the\nmeaning of Section 401(a) of the Code) or any plan that is, is intended to be,\nor has ever been treated as a plan subject to Title IV of ERISA, or (iv) any\nMedscape Benefit Plan or Medscape Employee Agreement which provides, or has any\nliability to provide, life insurance, medical, severance or other employee\nwelfare benefits to any employee (or spouse or dependent thereof) upon or\nfollowing the employee's retirement or termination of employment, except as\nrequired by Section 4980B of the Code or Part 6 of Title I of ERISA.\n\n            (b) Except as set forth in Schedule 3.10, the Purchaser is not and\nhas never been (i) a member of a \"controlled group of companies,\" under \"common\ncontrol\" or an \"affiliated service group\" within the meaning of Sections 414(b),\n(c) or (m) of the Code, (ii) required to be aggregated under Section 414(o) of\nthe Code, or (iii) under \"common control,\" within the meaning of Section\n4001(a)(14) of ERISA, or any regulations promulgated or proposed under any of\nthe foregoing sections, in each case with any other entity.\n\n\n                                       30\n\n   37\n\n            (c) The Purchaser has provided to the Sellers accurate and complete\ncopies of all documents embodying or relating to each Medscape Benefit Plan and\neach Medscape Employee Agreement, including all amendments thereto, trust or\nfunding agreements relating thereto, the two most recent annual reports required\nunder ERISA, the most recent determination letter received from the Internal\nRevenue Service, if any, and the most recent summary plan description (with all\nmaterial modifications).\n\n            (d) All contributions required to be made to or with respect to any\nMedscape Benefit Plan or Medscape Employee Agreement by applicable law or\nregulation or by any plan document or other contractual undertaking, and all\npremiums due or payable with respect to insurance policies funding any Medscape\nBenefit Plan or Medscape Employee Agreement, for any period through the Closing\nDate have been or, as applicable, shall be, timely made or paid in full or, to\nthe extent not required to be made or paid on or before the Closing Date, shall\nbe fully disclosed on Schedule 3.10.\n\n            (e) Each Medscape Benefit Plan is currently, and has been at all\ntimes prior to the Closing Date, maintained substantially in accordance with its\nterms and in compliance in all material respects with all applicable laws,\nstatutes, orders, rules and regulations, including, without limitation, ERISA\nand the Code. There is not now, nor to the Purchaser's knowledge do any\ncircumstances exist that could reasonably be expected to give rise to, any\nrequirement for the posting of security with respect to a Medscape Benefit Plan\nor Medscape Employee Agreement or the imposition of any Lien on the assets of\nthe Purchaser under applicable law, including, without limitation, ERISA and the\nCode.\n\n\n                                       31\n\n   38\n\n            (f) Except as set forth on Schedule 3.10, the execution of, and\nperformance of the transactions contemplated by, this Agreement will not (either\nalone or upon the occurrence of any additional or subsequent events directly\nrelated to the transactions contemplated by this Agreement) constitute an event\nunder any Medscape Benefit Plan or Medscape Employee Agreement that will or may\nresult in any payment, acceleration, forgiveness of indebtedness, vesting,\ndistribution, increase in benefits or obligations to fund benefits with respect\nto any employee or former employee or any spouse or dependent thereof.\n\n            (g) Except as set forth on Schedule 3.10, with respect to each\nMedscape Benefit Plan or Medscape Employee Agreement, there have been no\n\"prohibited transactions\" (within the meaning of Section 406 of ERISA and\nSection 4975 of the Code) and no fiduciary with respect to any Medscape Benefit\nPlan or Medscape Employee Agreement has incurred, or to the Purchaser's\nknowledge can reasonably be expected to incur, liability for a breach of\nfiduciary duty or other failure to act or comply in connection with the\nadministration or investment of the assets of any Medscape Benefit Plan.\nFurther, no action, suit, proceeding, or hearing, or to the Purchaser's\nknowledge, investigation with respect to any Medscape Benefit Plan or Medscape\nEmployee Agreement is pending or, to the knowledge of any Purchaser, threatened.\n\n            3.11 Compliance with Laws. The conduct of the Medscape Business\ncomplies in all material respects with (a) all statutes, laws, regulations,\nordinances, rules, licenses, judgments, orders or decrees applicable thereto\n(including regulations promulgated by the Food and Drug Administration),\nincluding compliance with any government contractor affirmative action plan, if\napplicable, and (b) the Charter and Bylaws of the Purchaser. Except as set forth\non Schedule 3.11, the Purchaser has not\n\n\n                                       32\n\n   39\n\nreceived notice of any alleged violation of any statute, law, regulation,\nordinance, rule, judgment, order, decree or license applicable thereto or to its\nproperties from any Governmental Entity or other person and the Purchaser has no\nknowledge of any such violation.\n\n            3.12 Insurance. The Purchaser maintains insurance policies with\ninsurers, in such amounts and against such risks of the Purchaser as are\ncustomary and reasonable for the Medscape Business and its assets.\n\n            3.13 Contracts. The Purchaser is not in material breach of any\nmaterial Contract to which it is a party.\n\n            3.14 Properties.\n\n            (a) Schedule 3.14 contains a true, correct and complete list of all\nreal property leasehold interests the Purchaser (the \"Medscape Leasehold\nInterests\"). The Purchaser has the legal right to possess and quietly enjoy the\nreal property in which it has Medscape Leasehold Interests and has received no\nnotice from any person asserting any claim or right inconsistent therewith. The\nPurchaser has never owned in fee any interest in real property.\n\n            3.15 Intellectual Property.\n\n            (a) Except as set forth in Schedule 3.15, the Purchaser has the\nunrestricted right to use and holds the copyright to all of the data which\ncomprises all of its data bases including data taken directly from any and all\nexternal sources as well as derived data.\n\n\n                                       33\n\n   40\n\n            (b) Except as set forth on Schedule 3.15, (i) the Purchaser has not\nbeen sued or charged or been a defendant in any claim, suit, action or\nproceeding which involves a claim of infringement of any intellectual property\nrights, (ii) to the knowledge of the Purchaser, there are no other claims that\nthe Purchaser is infringing any existing patent, trademark or copyright or any\nbasis for any such claim, without regard to whether any such patent, trademark\nor copyright is ultimately found to be valid, (iii) to the knowledge of the\nPurchaser, the use of the intellectual property rights in connection with the\nMedscape Business, as currently being conducted, does not infringe the patent,\ntrademark, copyright or any other right of any third party.\n\n            3.16 Website Traffic. The website traffic statistics set forth in\nthe report dated August 30, 1998, previously delivered to the Company by the\nPurchaser are true, correct and complete in all material respects.\n\n            3.17 Absence of Certain Changes. Since the Medscape Interim Date,\nexcept as set forth on Schedule 3.17, the Purchaser has conducted the Medscape\nBusiness in the ordinary course and maintained its records and books of account\nin reasonable detail which accurately and fairly reflect the transactions of the\nPurchaser in all material respects. Since the Medscape Interim Date there has\nnot been, except as disclosed on Schedule 3.17:\n\n            (a) Any materially adverse change in the nature of the Medscape\nBusiness, the results of the Purchaser's operations, the Purchaser's assets, the\nPurchaser's financial condition, or the manner of conducting the Medscape\nBusiness;\n\n            (b) Any damage, destruction or casualty loss (whether or not covered\nby insurance) adversely affecting the Medscape Business, the results of\noperations, the\n\n\n                                       34\n\n   41\n\nassets or the financial condition of the Purchaser or its ability to carry on\nits operations substantially as presently conducted and as proposed to be\nconducted; or\n\n            (c) Any declaration, setting aside or payment of distributions in\nrespect of any capital stock.\n\n            3.18 Relationship with Advertisers, Suppliers and Customers. Except\nas described in Schedule 3.18, the Purchaser has no actual knowledge that any\nsignificant supplier of goods, products or services to the Purchaser, or any\nsignificant customer of the Purchaser, (i) has made any material complaint or\nobjection with respect to the service or any business practices of the Purchaser\nor the transactions contemplated hereby or (ii) will cease to do business, or\nsignificantly reduce the business conducted, with the Purchaser with respect to\nthe Business after or as a result of the consummation of any transactions\ncontemplated hereby.\n\n            3.19 Undisclosed Liabilities. Except (a) as disclosed in Schedule\n3.19 or the other Schedules hereto, (b) as and to the extent disclosed or\nreserved against on the Medscape Interim Balance Sheet, (c) as incurred after\nthe Medscape Interim Date in the ordinary course of business consistent with\nprior practice and not prohibited by this Agreement, or (d) as incurred in\nconnection with this Agreement or any of the transactions contemplated hereby,\nthe Purchaser does not have any material liabilities or obligations of any\nnature, absolute, accrued, contingent or otherwise and whether due or to become\ndue required by GAAP to be set forth on the Medscape Interim Balance Sheet.\n\n            3.20 Finder's Fees. There is no investment banker, broker, finder or\nother intermediary which has been retained by or is authorized to act on behalf\nof the Purchaser who would have a claim to any fee or commission from the\nPurchaser or the\n\n\n                                       35\n\n   42\n\nSeller or any of their respective Affiliates in connection with the transactions\ncontemplated by this Agreement.\n\n            3.21 No Material Omissions. Neither this Agreement (including the\nSchedules) nor any certificate delivered pursuant hereto by the Purchaser\ncontains any untrue statement of a material fact relating to the Purchaser or\nomits to state a material fact relating to the Purchaser necessary to make the\nstatements made, in light of the circumstances in which they are made, not\nmisleading. In each case where a representation and warranty is made \"to the\nknowledge\" of the Purchaser, the Purchaser has made diligent inquiry of the\nresponsible officer, employee or agent of the Purchaser whose responsibilities\nwith the Purchaser would include those matters which are the subject of the\nrepresentation and warranty.\n\n                                   ARTICLE IV\n\n                                    Covenants\n\n            4.1 The Sellers' Confidentiality Obligations. The Sellers\nacknowledge that from and after the Closing, the Purchaser will have a\nlegitimate and continuing proprietary interest in the protection of trade\nsecrets and confidential information, knowledge and data of the Company and any\nsimilar information with respect to the Purchaser (collectively, the\n\"Confidential Information\") which is provided to any Seller. Except as\ndisclosure may be ordered by a Governmental Entity of competent jurisdiction or\nas otherwise required by law, each Seller severally agrees that such Seller and\nsuch Seller's Affiliates will maintain and cause to be maintained the\nconfidentiality of all Confidential Information related to the Business or the\nMedscape Business, the Company or the Purchaser or any of its Affiliates, which\nis held by or\n\n\n                                       36\n\n   43\n\nknown to any of them and shall not disclose the Confidential Information to any\nperson. In the event that any Seller or any of such Seller's Affiliates is\nnotified that he, she or it is or may become legally compelled to disclose any\nof the Confidential Information, such Seller will provide the Purchaser with\nprompt written notice of the existence, terms and circumstances surrounding such\nnotice so that the Purchaser may, at its cost and expense, seek a protective\norder or other appropriate remedy. In the event that such protective order or\nother remedy is not obtained prior to the time disclosure is required, the\nSellers will furnish only that portion of the Confidential Information that they\nare advised in writing by counsel is legally required to be furnished, and will\nfurnish to the Purchaser a copy of such written advice of counsel. The Sellers\nand their Affiliates shall not use any Confidential Information for any of their\nbenefit or the benefit of any other person. Information, knowledge or data shall\nnot be deemed to be Confidential Information to the extent that it is or becomes\ngenerally available to the public other than as a result of disclosure by a\nSeller or any of Seller's Affiliates, or becomes available to the Sellers on a\nnonconfidential basis from a source other than the Company or the Purchaser or\nany of its Affiliates or is known to a Seller prior to its disclosure to such\nSeller by the Company or the Purchaser or any of its Affiliates.\n\n            4.2 No Solicitation of Employees or Consultants, Non-Interference.\nJeffrey Drezner, M.D., Ph.D., agrees that for the period during which he shall\nbe in the Purchaser's employ and for a period of one year after the termination\nof such employment for any reason whatsoever, he will not, within the United\nStates and its territories and possessions, or in any other geographical area in\nwhich the Purchaser has an office or a client (the \"Medscape Territory\"),\ndirectly or indirectly, on his own behalf or on behalf of anyone else engaged in\na business which is directly competitive\n\n\n                                       37\n\n   44\n\nwith the Purchaser, without the prior written consent of the Purchaser (i)\npersuade or attempt to persuade any customer of the Purchaser or its affiliates\nas of the date of the termination of his employment, to cease doing business\nwith, or to reduce the amount of business it does with, the Purchaser or its\naffiliates or solicit the business of any of the Purchaser's or its affiliates'\ncustomers as of the date of the termination of his employment with the\nPurchaser, (ii) render to or for any customer of the Purchaser or its affiliates\nas of the date of the termination of his employment with the Purchaser any\nservices of the type rendered by the Purchaser to its customers unless such\nservices are rendered as an employee or consultant of the Purchaser or (iii)\nsolicit or encourage to leave the employ of the Purchaser or its affiliates, or\nto become employed by any person other than the Purchaser, any employee of the\nPurchaser or its affiliates, or any individual who was an employee of the\nPurchaser or its or affiliates during the one year prior to the termination of\nhis employment with the Purchaser. Jeffrey Drezner, M.D., Ph.D., agrees that for\nthe period during which he shall be in the Purchaser's employ and for a period\nof six months after the termination of such employment for any reason\nwhatsoever, he will not, within the Medscape Territory, directly or indirectly,\non his own behalf or on behalf of anyone else engaged in a business which is\ndirectly competitive with the Purchaser, without the prior written consent of\nthe Purchaser's, employ any employee of the Purchaser or its affiliates, or any\nindividual who was an employee of the Purchaser or its affiliates during the\nthree month period prior to the termination of his employment. Jeffrey Drezner,\nM.D., Ph.D., acknowledges and agrees that the restrictions and obligations\nimposed on him or her by virtue of this Section 4.2 are, in light of the\ncircumstances, fair and reasonable as to type, scope and period of time, and are\nreasonably required for the protection of the Purchaser and the goodwill\nassociated\n\n\n                                       38\n\n   45\n\nwith the business of the Purchaser. It is the intent Jeffrey Drezner, M.D.,\nPh.D., and the Purchaser that this Agreement be enforceable and restrict the\nPurchaser's activities only to the extent permitted by applicable law.\nTherefore, if any provision of this Section 4.2 as presently written shall be\nconstrued to be illegal, invalid or unenforceable by a court of competent\njurisdiction, said illegal, invalid or unenforceable provision shall be deemed\nto be amended and shall be construed by the court to have the broadest type,\nscope and duration permissible under applicable law, and if no validating\nconstruction is possible, shall be severable from the rest of this Agreement,\nand the validity, legality or enforceability of the remaining provisions of this\nAgreement shall not in any way be affected or impaired thereby.\n\n            4.3 Taxes. The Sellers shall be liable for any obligation or\nliability of the Company or the Sellers for transfer or sales taxes or other\ntaxes attributable to, arising from or associated with the sale or transfer from\nthe Sellers to the Purchaser of the Interests and the Sellers shall prepare and\nfile all required returns relating to such taxes.\n\n            4.4 Covenant Not to Compete. Jeffrey Drezner, M.D., Ph.D., agrees\nthat for the period during which he shall be in the Purchaser's employ and for a\nperiod of one year after the termination of such employment for any reason\nwhatsoever, he shall not, whether as an owner, shareholder (other than in his\ncapacity as holder of less than 2% of the shares of any corporation whose shares\nare traded on a national securities exchange or over the counter which shall be\nexcepted from this restriction), partner, employee, consultant, advisor,\nindependent contractor or otherwise, directly or indirectly compete with the\nbusiness of the Purchaser in any manner. Jeffrey Drezner, M.D., Ph.D.,\nacknowledges and agrees that the restrictions and obligations imposed on\n\n\n                                       39\n\n   46\n\nhim by virtue of this Section 4.4 are, in light of the circumstances, fair and\nreasonable as to type, scope and period of time, and are reasonably required for\nthe protection of the Purchaser and the goodwill associated with the business of\nthe Purchaser. It is the intent of Jeffrey Drezner, M.D., Ph.D., and the\nPurchaser that this Agreement be enforceable and restrict Jeffrey Drezner, M.D.,\nPh.D.'s, activities only to the extent permitted by applicable law. Therefore,\nif any provision of this Section 4.4 as presently written shall be construed to\nbe illegal, invalid or unenforceable by a court of competent jurisdiction, said\nillegal, invalid or unenforceable provision shall be deemed to be amended and\nshall be construed by the court to have the broadest type, scope and duration\npermissible under applicable law, and if no validating construction is possible,\nshall be severable from the rest of this Agreement, and the validity, legality\nor enforceability of the remaining provisions of this Agreement shall not in any\nway be affected or impaired thereby.\n\n            4.5 Tax Matters. The following provisions shall govern the\nallocation of responsibility as between the Purchaser and the Sellers for\ncertain Tax matters following the Closing Date:\n\n            (a) Tax Periods Ending on or Before the Closing Date. The Sellers\nshall prepare, at the Company's expense, all Tax returns for the Company for all\nperiods ending on or prior to the Closing Date which are due after the Closing\nDate, such returns to be prepared in a manner consistent with prior years. The\nPurchaser (or, if required by law, the Sellers) shall timely file or shall cause\nthe Company to timely file such Tax returns (if timely prepared by the Sellers),\nprovided that the Sellers shall be liable for any and all Taxes actually due and\npayable with respect to any period prior to\n\n\n                                       40\n\n   47\n\nJanuary 1, 1998 to the extent such liability was not accrued and reflected on\nthe HCG Interim Balance Sheet or otherwise set forth in the Schedules attached\nhereto.\n\n            (b) Tax Periods Beginning Before and Ending After the Closing Date.\nThe Purchaser shall prepare or cause to be prepared and file or cause to be\nfiled any Tax returns of the Company for Tax periods which begin before the\nClosing Date and end after the Closing Date. The Sellers shall pay to the\nPurchaser not later than fifteen (15) days prior to the date such Taxes are due\nwith respect to such periods an amount equal to the portion of such Taxes\nactually due and payable with respect to the portion of such Taxable period\nending on December 31, 1997 to the extent such Taxes were not accrued and\nreflected on the HCG Interim Balance Sheet. For purposes of this Section, in the\ncase of any Taxes that are imposed on a periodic basis and are payable for a\nTaxable period that includes (but does not end on) December 31, 1997, the\nportion of such Tax which relates to the portion of such Taxable period ending\non December 31, 1997 shall (x) in the case of any Taxes other than Taxes based\nupon or related to income or receipts, be deemed to be the amount of such Tax\nfor the entire Taxable period multiplied by a fraction the numerator of which is\nthe number of days in the Taxable period ending on the Closing Date and the\ndenominator of which is the number of days in the entire Taxable period, and (y)\nin the case of any Tax based upon or related to income or receipts be deemed\nequal to the amount which would be payable if the relevant Taxable period ended\non December 31, 1997. Any credits relating to a Taxable period that begins\nbefore and ends after December 31, 1997 shall be taken into account as though\nthe relevant Taxable period ended on December 31, 1997.\n\n\n                                       41\n\n   48\n\n            (c) Cooperation on Tax Matters.\n\n                  (i) The Purchaser, the Company and the Sellers shall cooperate\n            fully, as and to the extent reasonably requested by the other party,\n            in connection with the filing of Tax returns pursuant to this\n            Section and any audit, litigation or other proceeding with respect\n            to Taxes. Such cooperation shall include the retention and (upon the\n            other party's request) the provision of records and information\n            which are reasonably relevant to any such audit, litigation or other\n            proceeding and making employees available on a mutually convenient\n            basis to provide additional information and explanation of any\n            material provided.\n\n                  (ii) The Purchaser and the Sellers further agree, upon\n            request, to use their commercially reasonable efforts to obtain any\n            certificate or other document from any governmental authority or any\n            other Person as may be necessary to mitigate, reduce or eliminate\n            any Tax that could be imposed (including, but not limited to, with\n            respect to the transactions contemplated hereby). \n\n            (d) Notification of Inquiry. If the Purchaser or the Company becomes\naware of any assessment, official inquiry, examination or proceeding that could\nresult in an official determination with respect to Taxes due or payable for any\nTaxable year or Tax period ending on or before the Closing Date, the Purchaser\nshall promptly notify the Sellers in writing and shall permit the Sellers to\nparticipate at their own expense in any such official inquiry, examination or\nproceeding. If the Sellers become aware of any official inquiry, examination or\nproceeding that could result in an official determination with respect to Taxes\ndue or payable by the Company, the Sellers shall\n\n\n                                       42\n\n   49\n\npromptly so notify the Purchaser in writing and shall permit the Purchaser and\nthe Company to participate at their own expense in any such official inquiry,\nexamination or proceeding.\n\n                                    ARTICLE V\n\n                            Conditions to Obligations\n\n            5.1 Conditions to Sellers' Obligations. The obligation of the\nSellers to sell the Interests and to cause the sale of the Interests pursuant to\nthe provisions of this Agreement shall be subject to the satisfaction at or\nbefore the Closing of the following conditions, which may be waived by the\nSellers' Representative:\n\n            (a) the Purchaser shall have performed and complied in all material\nrespects with its covenants and agreements contained herein and the Sellers'\nRepresentative shall have received a certificate to this effect from an\nexecutive officer of the Purchaser;\n\n            (b) the representations and warranties of the Purchaser contained in\nArticle III of this Agreement shall be true, correct and complete in all\nmaterial respects at and as of the Closing Date, and the Sellers' Representative\nshall have received a certificate to this effect from an executive officer of\nthe Purchaser;\n\n            (c) the Company shall have entered an employment and restricted\nstock purchase agreement with Jeffrey Drezner, M.D., Ph.D., in the form of\nExhibit B hereto (the \"Drezner Employment Agreement\");\n\n            (d) the Amended and Restated Stockholders' Agreement shall have been\nexecuted and delivered by all parties thereto necessary to effect the amendments\ntherein other than the Sellers; and\n\n\n                                       43\n\n   50\n\n            (e) Jeffrey Drezner, M.D., Ph.D., shall have been elected a director\nof the Purchaser effective as of the Closing; and\n\n            (f) the restricted shares issuable to Jeffrey Drezner, M.D., Ph.D.\npursuant to the Drezner Employment Agreement shall have been issued\nsimultaneously with the Closing.\n\n            5.2 Conditions to the Purchaser's Obligations. The obligation of the\nPurchaser to purchase the Interests from the Sellers pursuant to the provisions\nof this Agreement shall be subject to the satisfaction at or before the Closing\nof the following conditions, which may be waived by the Purchaser:\n\n            (a) The Sellers shall have performed and complied in all material\nrespects with their covenants and agreements contained herein and the Purchaser\nshall have received a certificate to this effect from the Sellers'\nRepresentative;\n\n            (b) the representations and warranties of each Seller contained in\nArticle ll of this Agreement shall be true, correct and complete in all material\nrespects at and as of the Closing Date, and the Purchaser shall have received a\ncertificate to this effect from the Sellers' Representative;\n\n            (c) the Sellers shall have obtained consents from all third parties\nwhich are required for the transfer of the Interests or the operation of the\nBusiness after the Closing Date, including any consents to assignment of any\nContract to which the Company is a party where the transfer of the Interests to\nthe Purchaser may be deemed an assignment of such Contract;\n\n            (d) the Company shall have entered into the Drezner Employment\nAgreement, in the form of Exhibit B hereto; and\n\n\n                                       44\n\n   51\n\n            (e) the Amended and Restated Stockholders' Agreement shall have been\nexecuted and delivered by all parties thereto necessary to effect the amendments\ntherein.\n\n                                   ARTICLE VI\n\n                                 Indemnification\n\n            6.1 Indemnification by Sellers.\n\n            (a) Subject to the limitations set forth in this Agreement, each of\nthe Sellers jointly and severally, agrees promptly to indemnify, defend and hold\nharmless the Purchaser from and against any and all assessments, judgments,\ndebts, obligations, liabilities, losses, costs, damages or expenses (including\ninterest, penalties and reasonable out-of-pocket fees, expenses and\ndisbursements in connection with any action, suit or proceeding) net of\ninsurance proceeds actually received (collectively, \"Damages\"), suffered, paid\nor incurred by the Purchaser or the Company resulting from or caused by or\narising out of any breach of the representations and warranties made by any\nSeller to the Purchaser in this Agreement or in any Schedule hereto or any\ncertificate delivered hereunder (provided; that liability for the\nrepresentations and warranties in Section 2.4 and 2.5, which are made severally,\nrather than jointly and severally, shall be several). In addition, each of the\nSellers severally agrees promptly to indemnify, defend and hold harmless the\nPurchaser from and against any and all Damages suffered, paid or incurred by the\nPurchaser or the Company resulting from or caused by or arising out of any\nfailure by such Seller to perform any of his or her covenants or agreements\ncontained in this Agreement.\n\n\n                                       45\n\n   52\n\n            (b) Notwithstanding anything contained in this Agreement to the\ncontrary, indemnification under Section 6.1(a) is subject to the limitations\nthat (i) the aggregate amount of all payments required to be made by any Seller\nin satisfaction of claims for indemnification pursuant to Section 6.1(a) shall\nnot exceed the portion of the Cash Purchase Price paid and the then fair market\nvalue of the Shares delivered to him and (ii) no claim for indemnification may\nbe made until and thereafter only to the extent that the aggregate of Damages\nfor which the Sellers would otherwise be liable exceeds $75,000.\n\n            6.2 Indemnification by the Purchaser.\n\n            (a) The Purchaser agrees to indemnify and hold harmless the Sellers\nfrom and against any and all Damages suffered, paid or incurred by any Seller\nresulting from or caused by or arising out of: (i) any breach of the\nrepresentations and warranties made by the Purchaser in this Agreement or any\ncertificate delivered hereunder and (ii) any failure by the Purchaser to perform\nany covenant or agreement of the Purchaser contained in this Agreement.\n\n            (b) Notwithstanding anything contained in this Agreement to the\ncontrary, that (i) the aggregate of all payments to be made by the Purchaser in\nsatisfaction for claims for indemnification pursuant to this Section 6.2 shall\nnot exceed the aggregate value of the Cash Purchase Price and the then fair\nmarket value of the Shares and (ii) no claim for indemnification may be made\nuntil and thereafter only to the extent that the aggregate amount of Damages for\nwhich the Purchaser would otherwise be liable exceeds $75,000.\n\n            6.3 Indemnity Procedure for Third Party Claims.\n\n\n                                       46\n\n   53\n\n            Promptly after receipt by a party seeking indemnification hereunder\n(an \"Indemnified Party\") of notice of any claim or the commencement by any third\nparty of any action, suit or proceeding which might result in the other party\nhereto (the \"Indemnifying Party\") becoming obligated to indemnify or make any\nother payment to the Indemnified Party under this Agreement, the Indemnified\nParty shall notify the Indemnifying Party forthwith in writing of the\ncommencement thereof or of the claim, and shall furnish the Indemnifying Party\nwith all information and documents relating thereto promptly after its receipt\nthereof. The failure of the Indemnified Party to so notify the Indemnifying\nParty shall not relieve the Indemnifying Party from any liability which it may\nhave on account of this indemnification or otherwise, except and only to the\nextent that the Indemnifying Party is materially prejudiced thereby. The\nIndemnifying Party shall have the right, within thirty (30) days after being so\nnotified, to assume and control the defense of such claim, litigation or\nproceeding with counsel reasonably satisfactory to the Indemnified Party in good\nfaith and at the Indemnifying Party's own expense; provided that unless and\nuntil the Indemnifying Party shall assume such defense pursuant to this\nsentence, the Indemnified Party shall have the right to conduct and control the\ndefense of such claim, litigation or proceeding (including the settlement\nthereof) without the Indemnifying Party's consent and shall be entitled to\npayment from the Indemnifying Party of all reasonable costs of such defense\n(including attorney's fees and expenses). In any such claim, litigation or\nproceeding the defense of which the Indemnifying Party shall have so assumed,\nthe Indemnified Party shall have the right to participate therein and retain its\nown counsel at its own expense, unless (i) the Indemnifying Party and the\nIndemnified Party shall have mutually agreed to the retention of the same\ncounsel or (ii) the named parties to any such litigation or\n\n                                       47\n\n   54\n\nproceeding (including impleaded parties) include both the Indemnifying Party and\nthe Indemnified Party, and representation of such parties by the same counsel\nwould be inappropriate due to actual or potential differing interests between\nthem; in the case of clause (ii) above, such separate counsel may be retained by\nthe Indemnified Party at the expense of the Indemnifying Party. The Indemnifying\nParty may elect to settle any claim, action or proceeding defended by it without\nthe written consent of the Indemnified Party provided that such settlement is\nlimited to payment of monetary damages which are payable in full by the\nIndemnifying Party and the Indemnified Party is fully discharged at the time of\nthe settlement from any liability with respect to the claim, action or\nproceeding, and the Indemnified Party shall not admit any liability with respect\nthereto or settle, compromise, pay or discharge the same without the prior\nwritten consent of the Indemnifying Party so long as the Indemnifying Party is\ncontrolling or defending such claim in good faith. The Indemnifying Party may\nnot enter into any settlement that is not limited to payment of monetary damages\nwithout the Indemnified Party's prior written consent which will not be\nunreasonably withheld. Each of the Sellers and the Purchaser covenant to use all\nreasonable efforts to cooperate fully with respect to the defense of any claim,\naction or proceeding covered by this Section 6.3.\n\n            6.4 Tax Indemnification.\n\n            (a) Notwithstanding any limitation on indemnification set forth in\nSection 6.1 or 6.3 of the Agreement and without regard to any other limitation\non liability set forth in the Agreement, after the Closing Date, the Sellers,\njointly and severally, will fully indemnify, defend and hold harmless the\nPurchaser from and against any and all Damages resulting from, arising out of or\nrelating to Taxes for periods ending on or\n\n\n                                       48\n\n   55\n\nbefore December 31, 1997, or for any Taxes not disclosed in Schedule 2.8,\nimposed on the Company for, or resulting from the denial of any deduction or\ncredit claimed for, any taxable period ending on or before the Closing Date.\n\n            (b) This Section 6.4 shall remain in force for the period described\nin Section 7.6 of the Agreement.\n\n            6.5 Waiver of Right to Contribution. Each Seller hereby waives,\neffective as of the Closing Date, any rights which such Seller may have against\nthe Company in connection with any contribution or indemnification for payments\nmade after the Closing Date pursuant to this Agreement or otherwise.\n\n            6.6 Sole Remedy. In the event of a breach of a representation or\nwarranty or covenant hereunder, the remedy of the beneficiary of such\nrepresentation or warranty or covenant shall be limited solely to the indemnity\nset forth in this Article VI.\n\n                                   ARTICLE VII\n\n                                  Miscellaneous\n\n            7.1 Expenses. Except as provided below, each party will pay all of\nhis, her or its own expenses in connection with the negotiation of this\nAgreement, the performance of his, her or its obligations hereunder and the\nconsummation of the transactions contemplated hereby. The Sellers shall not\ncharge any such expenses to the Company. Purchaser shall reimburse one-half of\nthe Sellers' legal expenses payable to Goodwin, Procter &amp; Hoar LLP in connection\nwith the negotiation and documentation of the transaction contemplated hereby\nand by the Drezner Employment Agreement up to a maximum total reimbursement of\n$25,000.\n\n\n                                       49\n\n   56\n\n            7.2 Interpretation. When a reference is made in this Agreement to a\nSection, Schedule or Exhibit, such reference shall be to a Section, Schedule or\nExhibit of this Agreement unless otherwise indicated. The table of contents\ncontained in this Agreement is for reference purposes only and shall not affect\nin any way the meaning or interpretation of this Agreement. Whenever the words\n\"included,\" \"includes\" or \"including\" are used in this Agreement, they shall be\ndeemed to be followed by the words \"without limitation.\" All accounting terms\nnot defined in this Agreement shall have the meanings determined by GAAP.\n\n            7.3 Further Assurances. Each of the parties hereto covenants and\nagrees to take any and all such further action and to execute, acknowledge and\ndeliver such instruments, documents and agreements as any other party may\nreasonably request to effectuate, consummate or confirm the transactions\ncontemplated hereby.\n\n            7.4 Amendment and Waiver. This Agreement may be amended only in a\nwriting signed by the Sellers' Representative and the Purchaser. Any provision\nof this Agreement may be waived by the party entitled to the benefit thereof\nonly in a writing executed by the party against whom such waiver is sought to be\nenforced. No waiver shall be deemed a waiver of any other provision of this\nAgreement, and no waiver of a breach hereunder shall be deemed a waiver of any\nother or subsequent breach of this Agreement.\n\n            7.5 Notice. All notices, demands and other communications to be\ngiven or delivered hereunder shall be in writing and will be deemed to have been\ngiven if personally delivered or sent by overnight courier (in each such case\ndelivery will be\n\n\n                                       50\n\n   57\n\neffective upon receipt) or by confirmed facsimile to the addresses indicated\nbelow or to such other addresses as the parties may specify on notice as herein\nprovided:\n\n            If to the Purchaser, to:\n\n            Medscape, Inc.\n            134 West 29th Street\n            New York, New York 10001\n            Telecopy No. (212) 760-3140\n            Attention: Mr. Paul T. Sheils\n                       President and Chief Executive Officer\n\n                  with a copy to:\n\n            Patterson, Belknap, Webb &amp; Tyler LLP\n            1133 Avenue of the Americas\n            New York, New York 10036-6710\n            Telecopy No. (212) 336-2222\n            Attention: John P. Schmitt, Esq.\n\n            If to the Sellers, to:\n\n            Jeffrey L. Drezner, MD, Ph.D.\n            Sellers' Representative\n            Healthcare Communications Group, L.L.C.\n            10819 Pleasant Hill Drive\n            Potomac, MD 20854\n            Telecopy No. (301) 299-1124\n\n                  with a copy to:\n\n            Goodwin, Procter &amp; Hoar LLP\n            Exchange Place\n            Boston, Massachusetts 02109-2881\n            Telecopy No. (617) 305-6550\n            Attention: H. David Henken, Esq.\n                       John J. Egan, Esq.\n\n            7.6 Survival of Representations, Warranties and Covenants.\nNotwithstanding any investigation by any party hereto, each of the\nrepresentations and warranties of the parties and the related indemnification\nobligations that are set forth in this Agreement or in any certificate delivered\nhereunder shall survive the Closing Date\n\n\n                                       51\n\n   58\n\nuntil the first anniversary of the Closing Date (the \"Expiration Date\") except\nthose representations and warranties contained in Section 2.4 and Section 3.4\n(Capitalization) which shall survive indefinitely and Section 2.8 and Section\n3.8 (Taxes), and 2.10 and 3.10 (Labor and Employee Benefit Matters) which shall\nremain in force until the expiration of the applicable statute of limitations;\nprovided, however, that delivery by one party to the other of notice of a breach\nof any representation or warranty, specifying the breach in reasonable detail,\non or prior to the Expiration Date, or the expiration of the applicable statute\nof limitations, as the case may be, shall be deemed to preserve such party's\nclaim solely with respect to that particular breach of representation and\nwarranty. Those covenants contained in this Agreement that contemplate or may\ninvolve actions to be taken or obligations in effect after the Closing Date\nshall survive the Closing Date until the expiration of the applicable statute of\nlimitations.\n\n            7.7 Binding Agreement; Assignment. This Agreement and all of the\nprovisions hereof will be binding upon and inure to the benefit of the parties\nhereto and their respective successors. The Sellers may not assign their rights\nor delegate their duties hereunder without the prior written consent of the\nPurchaser, which consent may be granted, withheld or conditioned in the sole and\nabsolute discretion of the Purchaser. The Purchaser may not assign its rights or\ndelegate its duties hereunder, whether by operation of law or otherwise, to any\nnon-affiliated third party, without the prior written consent of the Sellers'\nRepresentative, which consent may be granted, withheld or conditioned in the\nsole and absolute direction of the Sellers' Representative.\n\n            7.8 Severability. Whenever possible, each provision of this\nAgreement will be interpreted in such a manner as to be effective and valid\nunder applicable law,\n\n\n                                       52\n\n   59\n\nbut if any provision of this Agreement is held to be prohibited by or invalid\nunder applicable law, such provision will be ineffective only to the extent of\nsuch prohibition or invalidity, without invalidating the remainder of such\nprovision or the remaining provisions of this Agreement.\n\n            7.9 Captions. The captions used in this Agreement are for\nconvenience of reference only and do not constitute a part of this Agreement and\nwill not be deemed to limit, characterize or in any way affect any provision of\nthis Agreement and all provisions of this Agreement will be enforced and\nconstrued as if no captions had been used in this Agreement.\n\n            7.10 Counterparts. This Agreement may be executed in two or more\ncounterparts, each of which need not contain signatures of more than one party,\nbut all such counterparts taken together will constitute one and the same\ninstrument. Signatures may be exchanged by telecopy, with original signatures to\nfollow. Each party to this Agreement agrees that it will be bound by his, her or\nits own telecopied signature and that he, she or it accepts the telecopied\nsignatures of the other parties to this Agreement.\n\n            7.11 Governing Law. This Agreement shall be governed by, construed\nand enforced in accordance with the laws of the State of New York, without\nreference to the choice of law provisions thereof. Any legal action or\nproceeding with respect to this Agreement or any transaction related hereto\nshall be brought in the courts of the State of New York or of the United States\nDistrict Court for the Southern District of New York, and, by the execution and\ndelivery of this Agreement, each of the parties hereto hereby consents for\nhimself, herself and itself and in respect of his, her or its property to the\nexclusive jurisdiction of the aforesaid courts and agrees that service of\nprocess in any\n\n\n                                       53\n\n   60\n\nlegal action or proceeding with respect to this Agreement or any transaction\nrelated hereto may be made on such party by delivery of such process by\ncertified mail, return receipt requested, to such party at its address for\nnotice pursuant to Section 7.5 of this Agreement with the same effect as if such\nprocess was personally served on such party within the State of New York. Each\nof the parties hereto hereby irrevocably waives, to the extent permitted by\napplicable law, any objection, including, but not limited to, any objection to\nthe laying of venue or based on the ground of forum non conveniens, which he,\nshe or it may now or hereafter have to the bringing of any action or proceeding\nin such jurisdictions in respect of this Agreement or any transaction related\nhereto. Nothing contained herein shall affect the right of any party hereto to\nserve process in any other manner permitted by law.\n\n            7.12 Remedies. All rights, remedies or powers hereby conferred\nshall, to the extent not prohibited by law, be deemed cumulative and not\nexclusive of any other thereof, or of any other rights, remedies or powers\navailable. No single or partial exercise of any right, remedy or power by a\nparty shall preclude further exercise thereof. No delay or omission to exercise\nany right, power or remedy accruing to a party upon the occurrence of any breach\nof any warranty, covenant or agreement contained in this Agreement shall impair\nany such right, power or remedy or be construed to be a waiver of any such\nbreach or any acquiescence therein or to any similar breach thereafter\noccurring. In addition to such other rights and remedies as the Purchaser may\nhave at equity or in law with respect to any breach of this Agreement, if\nJeffrey L. Drezner, M.D., Ph.D. commits a material breach of any of the\nprovisions of Sections 4.2 and 4.4, the Purchaser shall have the right and\nremedy to have such provisions specifically enforced by any court having equity\njurisdiction, it being\n\n\n                                       54\n\n   61\n\nacknowledged and agreed that any such breach or threatened breach will cause\nirreparable injury to the Purchaser and that money damages will not provide an\nadequate remedy to the Purchaser.\n\n            7.13 Public Announcements. No public announcement concerning the\ntransactions contemplated hereby may be made by either party without the consent\nof the other except as may be required by law or the rules of any applicable\nsecurities exchange.\n\n            7.14 Entire Agreement; Termination of Certain Prior Agreements\nBetween Company and Sellers. This Agreement (including the Exhibits, Schedules,\ndocuments and instruments referred to herein) constitutes the entire agreement\nand understanding of the parties hereto and thereto with respect to the subject\nmatter hereof and thereof and supersedes all other prior agreements and\nunderstandings, both written or oral, between such parties with respect to the\nsubject matter hereof and thereof. Without limitation to the foregoing, each\nparty hereto understands and agrees that all prior employment agreements between\nthe Company and any of the Sellers shall terminate effective as of the Closing.\n\n\n                                       55\n\n   62\n\n            IN WITNESS WHEREOF, the parties hereto have caused this Agreement to\nbe executed and delivered on their behalf as of the day and year first above\nwritten.\n\n                                    MEDSCAPE, INC.\n\n\n                             By: \/s\/ Paul T. Sheils\n                                 -----------------------------\n                                 Name: Paul T. Sheils\n                                 Title:President and Chief\n                                       Executive Officer\n\n\n                                 \/s\/ Jeffrey L. Drezner\n                                 -----------------------------\n                                 Jeffrey L. Drezner\n\n\n                                 \/s\/ Melanie Moore\n                                 -----------------------------\n                                 Melanie Moore\n\n\n                                 \/s\/ Sandra Sims\n                                 -----------------------------\n                                 Sandra Sims\n\n\n                                 \/s\/ Jason Rosenbaum\n                                 -----------------------------\n                                 Jason Rosenbaum\n\n\n                                       56\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8179],"corporate_contracts_industries":[],"corporate_contracts_types":[9622,9627],"class_list":["post-43519","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-medscape-inc","corporate_contracts_types-planning","corporate_contracts_types-planning__purchase"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43519","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=43519"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43519"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43519"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43519"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}