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The H/W Health and Fitness LLC Agreement 01-26-2000

AMENDED AND RESTATED

 

OPERATING AGREEMENT

 

OF

 

THE H/W HEALTH & FITNESS LLC

 

JANUARY 26, 2000

 

 

 

THE OWNERSHIP INTERESTS IN THIS LIMITED LIABILITY COMPANY HAVE NOT BEEN

REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR STATE SECURITIES

AUTHORITIES AND MAY NOT BE SOLD OR REGISTERED IN THE ABSENCE OF AN EFFECTIVE

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY

APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL ACCEPTABLE TO THE

COMPANY THAT REGISTRATION IS NOT REQUIRED. THE SALE OR OTHER TRANSFER OF THE

OWNERSHIP INTERESTS IS ALSO RESTRICTED BY PROVISIONS OF THIS AGREEMENT AND

RELATED AGREEMENTS.

 

 

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TABLE OF CONTENTS

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PAGE

 

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ARTICLE I DEFINITIONS................................................1

 

ARTICLE II FORMATION .................................................7

2.1 Formation .................................................7

2.2 Name ......................................................7

2.3 Office and Agent ..........................................8

2.4 Purposes ..................................................8

2.5 Powers ....................................................8

2.6 Ownership of Property......................................8

2.7 Qualification in Other Jurisdictions ......................8

 

ARTICLE III CAPITAL ...................................................8

3.1 Initial Capital Contributions by Members;

Initial Capital Accounts; Initial Tax Basis in Assets .....8

3.2 Percentage Interests ......................................9

3.3 Additional Capital ........................................9

3.4 Capital Accounts .........................................10

3.5 Allocation of Items of Company Income, Gain,

Loss, Deduction and Credit ...............................11

3.6 Distributions ............................................14

3.7 Withholding ..............................................14

3.8 Distribution Limitation ..................................15

3.9 Company Funds ............................................15

3.10 Capital Contribution .....................................15

 

ARTICLE IV MANAGEMENT ...............................................15

4.1 Management of the Company's Business .....................15

4.2 Board ....................................................16

4.3 Extraordinary Actions ....................................16

4.4 Indemnification ..........................................17

 

ARTICLE V LIABILITY OF A MEMBER.....................................19

5.1 Limited Liability ........................................19

5.2 Capital Contribution .....................................19

5.3 Reliance .................................................19

 

ARTICLE VI REPRESENTATIONS AND WARRANTIES ...........................19

6.1 Due Incorporation; Authorization .........................20

6.2 No Conflict ..............................................20

6.3 No Conflict; No Default ..................................20

6.4 Unregistered Interests ...................................20

</TABLE>

 

 

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<TABLE>

 

<S> <C> <C> <C>

ARTICLE VII BOOKS AND RECORDS; REPORTS TO MEMBERS.............................21

7.1 Books and Records........................................21

7.2 Financial Reports; Subscriber Reports....................21

7.3 Tax Returns and Information..............................22

 

ARTICLE VIII COMPANY INTERESTS; RESTRICTIONS ON TRANSFER.......................23

8.1 Transfer.................................................23

8.2 Admission as a Member....................................23

8.3 No Right to Withdraw.....................................23

8.4 Corporate Conversion.....................................23

8.5 Put/Call.................................................24

 

ARTICLE IX DISSOLUTION AND LIQUIDATION.......................................24

9.1 Dissolution..............................................24

9.2 Exclusive Means of Dissolution...........................25

9.3 Liquidation..............................................25

9.4 Priority of Payment......................................25

9.5 Liquidating Distributions................................26

9.6 No Restoration Obligation................................26

9.7 Timing...................................................26

9.8 Liquidating Reports......................................26

9.9 Certificate of Cancellation..............................26

 

ARTICLE X ADDITIONAL AGREEMENTS.............................................26

10.1 Indemnification..........................................26

10.2 Galaxy Asset License.....................................27

 

ARTICLE XI MISCELLANEOUS.....................................................27

11.1 Waiver of Partition......................................27

11.2 Modification; Waivers....................................27

11.3 Entire Agreement.........................................28

11.4 Severability.............................................28

11.5 Notices..................................................28

11.6 Successors and Assigns...................................29

11.7 Counterparts.............................................29

11.8 Headings; Cross-references...............................29

11.9 Construction.............................................29

11.10 Property Rights; Confidentiality.........................29

11.11 Further Actions..........................................30

11.12 Governing Law; Forum.....................................30

11.13 Expenses of the Parties..................................30

</TABLE>

 

 

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AMENDED AND RESTATED

 

OPERATING AGREEMENT

 

OF

 

THE H/W HEALTH & FITNESS LLC

 

THIS AMENDED AND RESTATED OPERATING AGREEMENT is made as of the 26th

day of January 2000, by and between Healtheon/WebMD Cable Corporation, a

Delaware corporation and wholly-owned subsidiary of Healtheon/WebMD Corporation

("Healtheon/WebMD"), (together with any of its Affiliate Transferees (as

hereinafter defined), the "Healtheon Member"), and AHN/FIT Internet, LLC, a

Delaware limited liability company (together with any of its Affiliate

Transferees (as hereinafter defined), the "Fox Member," and together with the

Healtheon Member, the "Members").

 

W I T N E S S E T H:

 

The Fox Member entered into an Operating Agreement on the 10th day of

January, 2000 (the "Original Agreement"). The Fox Member desires to amend and

restate the Original Agreement in its entirety as set forth herein.

 

In consideration of the mutual promises and covenants contained in

this Agreement, and intending to be legally bound, the Members hereby agree as

follows:

 

ARTICLE I

DEFINITIONS

 

As used in this Agreement, the following terms have the meanings

assigned to them in this Article I (except as otherwise expressly provided) and

include the plural as well as the singular and vice versa. All accounting terms

not otherwise defined herein have the meanings assigned to them in accordance

with GAAP.

 

"Act" shall mean the Delaware Limited Liability Company Act, as

amended.

 

"Adjusted Capital Account Deficit" shall mean the deficit balance (if

any) in such Member's Capital Account as of the end of any Fiscal Year, after

(a) crediting to such Capital Account any amount which such Member is obligated

to restore pursuant to this Agreement or is deemed obligated to restore

pursuant to the minimum gain chargeback provisions of the Section 704(b) of

 

 

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the Treasury Regulations, and (b) charging to such Capital Account any

adjustments, allocations or distributions described in the qualified income

offset provisions of the Section 704(b) of the Treasury Regulations which are

required to be charged to such Capital Account pursuant to this Agreement.

 

"Affiliate" shall mean, with respect to any Person, any Person that

directly or indirectly Controls, is Controlled by, or is under common Control

with such Person.

 

"Agreement" shall mean this Amended and Restated Operating Agreement,

also known as a "limited liability company agreement" under the Act, as amended

from time to time.

 

"Available Cash" shall mean for any Fiscal Year or other period, the

positive amount, if any, obtained by calculating net income (or loss) of the

Company determined in accordance with GAAP for such period, adjusted, without

duplication, by adding (x) depreciation, amortization and other non-cash

charges to the extent deducted in determining net income and deducting (y) (i)

the current portion of indebtedness of the Company, (11) prepaid expenses and

other cash expenditures to the extent not deducted in determining net income or

loss and (iii) reasonable reserves for working capital and contingent

liabilities as determined by the Managing Member.

 

"Board" shall have the meaning set forth in Section 4.2 hereof.

 

"Business" shall mean the business of the Company as set forth in

Section 2.4 hereof.

 

"Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday or

Friday which is not a day on which banking institutions in New York City are

authorized or obligated by law to close.

 

"Call" shall have the meaning set forth in Section 8.5(a) hereof.

 

"Capital Account" shall have the meaning set forth in Section 3.4(a)

hereof.

 

"Capital Contribution" shall mean the amount which a Member shall

contribute to the capital of the Company as provided in Article III hereof.

 

"Certificate" shall mean the certificate of formation of the Company,

as amended from time to time.

 

"Code" shall mean the United States Internal Revenue Code of 1986, as

amended from time to time, or any successor statute or statutes.

 

"Common Stock" shall mean the common stock, par value $0.0001 per

share, of Healtheon/WebMD and any and all shares of capital stock or other

equity securities of: (i) Healtheon/WebMD which are added to or exchanged or

substituted for the Common Stock by reason of the declaration of any stock

dividend or stock split, the issuance of any distribution or the

reclassification, readjustment, recapitalization or other such modification of

the capital structure of

 

 

<PAGE> 6

 

 

Healtheon/WebMD; and (ii) any other corporation, now or hereafter

organized under the laws of any state or other governmental authority, with

which Healtheon/WebMD is merged, which results from any consolidation or

reorganization to which Healtheon/WebMD is a party, or to which is sold all or

substantially all of the shares or assets of Healtheon/WebMD, if immediately

after such merger, consolidation, reorganization or sale, Healtheon/WebMD or

any Stockholders of Healtheon/WebMD own equity securities having in the

aggregate more than fifty percent (50%) of the total voting power of such other

corporation.

 

"Company" shall mean the limited liability company formed pursuant to

the Certificate and governed by this Agreement and the Act.

 

"Company Minimum Gain" shall mean the amount determined in accordance

with the principles of Treasury Regulations Section 1.704-2(d).

 

"Company Property" shall have the meaning set forth in Section 2.6

hereof.

 

"Control" shall mean the possession, direct or indirect of the power

to direct or cause the direction of the management and policies of a Person,

whether through the ownership of voting securities, by contract or otherwise.

 

"Corporate Conversion" shall mean any merger, consolidation,

conversion by filing, assignment of assets, or similar transaction or series of

transactions resulting in a corporation substantially all of the assets of

which consist of substantially all of the assets that were held directly or

indirectly by the Company immediately prior to such transaction and

substantially all the capital stock of which corporation is held by Persons who

were either (i) Members immediately prior to such transaction or (ii) the

owners of a Member the sole or principal asset of which Member was an Interest

in the Company.

 

"Current Market Price" shall mean, per share of Common Stock on any

date specified, the average of the daily market prices of such Common Stock for

the 20 consecutive Business Days ending on the second Business Day prior to

such date. The daily market price of Common Stock on any Business Day will be

(a) the last sale price on such day on the principal stock exchange on which

such share of Common Stock is then listed or admitted to trading (including the

Nasdaq National Market System if such Common Stock is admitted to trading

thereon), or (b) if no sale takes place on such date on any exchange on which

such share of Common Stock is listed or admitted to trading, the average of the

reported closing bid and asked prices on such day as officially noted on any

exchange.

 

"Damages" shall have the meaning set forth in Section 4.4(a) hereof.

 

"Depreciation" shall mean, for each Fiscal Year or other period, an

amount equal to the depreciation, amortization, or other cost recovery

deduction allowable for federal income tax purposes with respect to an asset

for such year or other period, except that if the Gross Asset Value of any

asset differs from its adjusted basis for federal income tax purposes at the

beginning of such year or other period, Depreciation shall be an amount which

bears the same ratio to such beginning

 

 

<PAGE> 7

 

 

Gross Asset Value as the federal income tax depreciation, amortization, or

other cost recovery deduction for such year or other period bears to such

beginning adjusted tax basis; provided, however, that if the federal income tax

depreciation, amortization, or other cost recovery deduction for such year is

zero, Depreciation shall be determined with reference to such beginning Gross

Asset Value using any reasonable method selected by the Tax Matters Member.

 

"Dissolution" shall mean the happening of any of the events described

in Section 9.1 hereof.

 

"Economic Risk of Loss" shall have the meaning set forth in Sections

1.704-2(b)(4) and 1.752-2 of the Treasury Regulations.

 

"Effective Date" shall mean the date hereof, unless the parties

otherwise mutually agree in writing that some other date shall be the Effective

Date.

 

"Fair Market Value" shall mean, for purposes of this Agreement, the

cash price at which a willing seller would sell, and a willing buyer would buy,

the property in question, both having full knowledge of, the relevant facts and

being under no compulsion to buy or sell, in an arm's length transaction without

time constraints. Fair Market Value may be determined by mutual agreement of the

Members. If the Members are unable to agree on a Fair Market Value within 15

days of the date on which a determination of Fair Market Value is required, or

if they determine that an appraisal should be used to determine Fair Market

Value, then each of the Members will cause the Fair Market Value as of the most

recent month end (or as of such other date as may be expressly provided herein)

to be determined by a qualified appraiser in accordance with the following

procedure. The Members shall, within 10 days of the date that an appraiser is

required, seek to select a mutually agreeable appraiser. If the Members are

unable to agree on a single qualified appraiser within 10 days, each Member will

have 10 additional days to select one appraiser internationally recognized in

valuing items of the kind required to be valued. Any Member not appointing an

appraiser pursuant to the preceding sentence within the allotted time shall have

no right to select an appraiser thereafter but shall be bound by the procedure

set forth herein using values determined by appraisers selected by the other

Member or Members, as applicable. The appointed appraiser, or appraisers, as the

case may be, will determine the Fair Market Value. The Members will use their

reasonable best efforts to cause such appraiser or appraisers to submit to them

written reports indicating the determination of Fair Market Value within 30 days

after the date such appraiser is selected. If there is more than one appointed

appraiser, and the highest of the appraisals is not more than 110% of the lowest

appraisal, the average of the two will be the Fair Market Value. If the highest

of the appraisals is more than 110% of the lowest appraisal, the Members will

immediately notify the appraisers and cause them to appoint another similarly

qualified appraiser within 10 days after such notice. The Members will use their

reasonable best efforts to cause such appraiser (who will not be apprised of the

determination of the other appraisers) to submit a written report to each of

them indicating such appraiser's determination of Fair Market Value within 30

days after the date such appraiser is selected. If three appraisals are

necessary, then the average of the two appraisals in which the determinations of

Fair Market Value are closest together will be the Fair Market Value or, if the

highest and lowest are equidistant from the middle determination, then the

middle determination will be the Fair Market Value. A determination of Fair

Market Value as provided herein will be final, binding and nonappealable. Each

Member will pay one half of the fees and costs of any appraiser

 

 

<PAGE> 8

 

 

involved in a determination of Fair Market Value required by this Agreement.

 

"Fiscal Year" shall mean the twelve-month period ending December 31 of

each year, or such other fiscal year as the Members may designate.

 

"Fox Member" shall have the meaning set forth in the preamble to this

Agreement.

 

"GAAP" shall mean generally accepted accounting principles as in

effect in the United States from time to time and consistently applied, with

such exceptions thereto or deviations therefrom, if any, as the Managing Member

may approve.

 

"Gross Asset Value" shall mean, with respect to any asset, the asset's

adjusted basis for federal income tax purposes, except as follows:

 

(a) the initial Gross Asset Value of any asset contributed by a

Member to the Company shall be the Fair Market Value of such asset;

 

(b) the Gross Asset Value of all Company assets shall be adjusted

to equal their respective Fair Market Value (taking Section 7701 (g) of the

Code into account), as of the following times: (i) the acquisition of an

additional interest in the Company by any new or existing Member in exchange

for more than a de minimis capital contribution; (ii) the distribution by the

Company to a Member of more than a de minimis amount of Company Property as

consideration for an interest in the Company, in the case of either (i) or

(ii), if the Members reasonably determine that such adjustment is necessary or

appropriate to reflect the relative economic interests of the Members in the

Company and (iii) the liquidation of a Member's interest in the Company or the

Company within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Treasury

Regulations;

 

(c) the Gross Asset Value of any Company asset distributed to any

Member shall be the Fair Market Value (taking Section 7701(g) of the Code

into account) of such asset on the date of distribution;

 

(d) the Gross Asset Values of Company assets shall be increased

(or decreased) to reflect any adjustments to the adjusted basis of such assets

pursuant to Section 732(d), Section 734(b) or Section 743(b) of the Code, but

only to the extent that such adjustments are taken into account in determining

Capital Accounts pursuant to Section 1.704-1(b)(2)(iv)(m) of the Treasury

Regulations and Section 3.5 hereof, provided, however, that Gross Asset Values

shall not be adjusted pursuant to this subsection (d) to the extent that the

Members determine that an adjustment pursuant to subsection (b) of this

definition is necessary or appropriate in connection with a transaction that

would otherwise result in an adjustment pursuant to this subsection (d); and

 

(e) if the Gross Asset Value of any asset has been determined or

adjusted pursuant to subsection (a), (b) or (c) hereof, such Gross Asset Value

shall thereafter be adjusted by the Depreciation taken into account with

respect to such asset for purposes of computing gains or losses from the

disposition of such asset.

 

 

<PAGE> 9

 

 

"Healtheon Member" shall have the meaning set forth in the preamble to

this Agreement.

 

"HSR" shall have the meaning set forth in Section 8.5(b) hereof.

 

"Indemnitee" shall have the meaning set forth in Section 4.4(a)

hereof.

 

"Interest" shall mean, as to each Member, such Member's rights to

participate in the income, gains, losses, deductions and credits of the

Company, together with all other rights and obligations of such Member in the

capital of the Company under this Agreement.

 

"Internet" shall mean a decentralized worldwide network of computer

networks.

 

"Lien" shall mean a mortgage, lien, pledge, security interest or

other encumbrance.

 

"Liquidation" shall mean the process of winding up and terminating the

Company after its Dissolution.

 

"Losses" shall have the meaning set forth in Section 3.5(a) hereof.

 

"Managing Member" shall mean the Healtheon Member, and any Person who

may after the date hereof become a successor to the Healtheon Member, as

provided herein.

 

"Member" shall mean the Fox Member, the Healtheon Member and any

permitted transferee of an Interest or portion thereof who becomes a Member in

accordance with Article VIII. The Fox Member and the Healtheon Member (together

with such transferees) may be collectively referred to herein as the "Members."

 

"Member Nonrecourse Debt" shall mean liabilities of the Company

treated as "partner nonrecourse debt" under Section 1.704-2(b)(4) of the

Treasury Regulations.

 

"Member Nonrecourse Deductions" shall mean any losses, deductions or

Code Section 705(a)(2)(b) expenditures characterized as "partner nonrecourse

deductions" under Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Treasury

Regulations.

 

"Member Nonrecourse Debt Minimum Gain" shall mean an amount of gain

characterized as "partner nonrecourse debt minimum gain" under Treasury

Regulations Sections 1.704-2(i)(2) and 1.704-2(i)(3).

 

"Nonrecourse Deductions" in any year shall mean the Company deductions

that are characterized as "nonrecourse deductions" under Sections 1.704-2(b)(1)

and 1.704-2(c) of the Treasury Regulations.

 

 

<PAGE> 10

 

 

"Percentage Interest" shall mean, with respect to each Member, such

Member's proportionate share of the total Interests in the Company expressed as

a percentage, as set forth in Section 3.2 hereof and as may be adjusted from

time to time pursuant to this Agreement.

 

"Person" shall mean an individual or a corporation, limited liability

company, joint venture, partnership, trust, unincorporated association,

governmental authority or other entity.

 

"Prime Rate" shall mean a rate of interest equal to the rate per annum

announced from time to time by Citibank, N.A. at its principal office as its

prime rate (which rate shall change when and as such announced prime rate

changes) but in no event more than the maximum rate of interest permitted to be

collected from time to time under applicable usury laws.

 

"Prime Time" shall mean between the hours of 6:00 p.m. and 12 a.m.

 

"Profits" shall have the meaning set forth in Section 3.5(a) hereof.

 

"Put" shall have the meaning set forth in Section 8.5(a) hereof.

 

"Regulatory Allocations" shall have the meaning set forth in

subparagraph 3.5(c)(viii) hereof.

 

"Representatives" shall have the meaning set forth in Section 4.2(a)

hereof.

 

"Super Majority Vote" shall mean a vote of 100% of the Percentage

Interests.

 

"Section 704(c) Property" shall have the meaning set forth in Section

1.704-3(a)(3) of the Treasury Regulations and shall include assets treated as

Section 704(c) Property by virtue of Section 1.704-1(b)(2)(iv)(f) of the

Treasury Regulations.

 

"Tax Matters Member" shall mean the "tax matters partner," as that

term is defined in Section 6231(a)(7) of the Code.

 

"Transfer" shall mean a sale, exchange, assignment, transfer, pledge

or other disposition of all or any part of an Interest (whether voluntary,

involuntary or by operation of law).

 

"Transferee" shall mean a Person to whom an Interest is Transferred in

compliance with this Agreement.

 

"Transferor" shall mean a Person who Transfers all or any part of an

Interest in compliance with this Agreement.

 

"Treasury Regulations" shall mean the income tax regulations (including

temporary and proposed) promulgated under the Code.

 

 

<PAGE> 11

 

 

ARTICLE II

FORMATION

 

2.1 Formation. The Company was formed as a limited liability company

pursuant to the Act by the filing on January 10, 2000 of the Certificate with

the Secretary of State of the State of Delaware.

 

2.2 Name. The business of the Company shall be conducted under the

name The H/W Health & Fitness LLC or such other or additional name or names and

variations thereof as the Managing Member may from time to time determine. The

Managing Member shall file, or cause to be filed, any fictitious name

certificate and similar filings, and any amendments thereto, as may be directed

by the Board from time to time.

 

2.3 Office and Agent.

 

(a) The initial registered office of the Company in Delaware will

be at 1013 Centre Road, Wilmington, Delaware 19805-1297, and its initial

registered agent will be Corporation Service Company. The Company may, upon

compliance with the applicable provisions of the Act, change its registered

office or registered agent in Delaware.

 

(b) The initial principal office of the Company will be at 1300

North Market Street, Suite 404, Wilmington, Delaware 19801. The Company may

maintain any other offices at any other places that the Managing Member deems

advisable.

 

2.4 Purposes. The purposes of the Company shall be (a) to own and

operate Internet services devoted exclusively to health and fitness content,

consisting of audio-visual data and information, and a transaction platform

that facilitates and streamlines interactions among participants in the

healthcare industry (the "Business"), (b) to acquire, own, hold, sell or

otherwise dispose of interests in the assets used to conduct the Business, (c)

to make and perform all contracts and engage in all activities and transactions

and to do any and all things necessary or advisable to carry out the foregoing

purpose, and (d) to otherwise engage in any lawful activity incidental thereto

for which limited liability companies may be organized under the Act.

 

2.5 Powers. The Company shall have all the powers granted to a limited

liability company under the Act, as well as all powers necessary or convenient

to achieve its purposes and to further its business.

 

2.6 Ownership of Property. Legal title to all assets, rights and

property, whether real, personal or mixed, owned by the Company (collectively,

the "Company Property") shall be acquired, held and conveyed only in the name

of the Company.

 

2.7 Qualification in Other Jurisdictions. The Managing Member shall

cause the Company to be qualified or registered under applicable laws of any

jurisdiction in which the Company transacts business and shall be authorized to

execute, deliver and file any certificates and documents necessary to effect

such qualifications or registrations including, without limitation, the

 

 

<PAGE> 12

 

 

appointment of agents or service of process in such jurisdictions.

 

ARTICLE III

CAPITAL

 

3.1 Initial Capital Contributions by Members; Initial Capital

Accounts; Initial Tax Basis in Assets.

 

The Company was formed on January 10, 2000 and on the date hereof

the Fox Member contributed to the capital of the Company the assets, subject to

the liabilities, which constituted all of its assets, other than the Galaxy

Assets, as defined in the Purchase Agreement, and cash on hand, and all of its

liabilities, other than liabilities in respect of member loans. The Healtheon

Member then purchased a 50% Interest from the Fox Member pursuant to a purchase

agreement dated as of the date hereof. It is agreed that (i) the Healtheon

Member is admitted to the Company as a Member, (ii) this Agreement shall govern

the management, business and affairs of the Company, (iii) the purchase of its

Interest by the Healtheon Member shall be treated under the Code as a purchase

of an undivided one-half interest in each of the Company's assets, subject to

its liabilities, on the date hereof, followed by the contribution of such

assets subject to such liabilities to the capital of the Company by the

Healtheon Member and the contribution of the remaining one-half undivided

interest in such assets subject to the remaining liabilities by the Fox Member

to the capital of the Company, (iv) the initial Capital Account of the

Healtheon Member and the Fox Member shall each equal (S750,000), (v) the

aggregate adjusted tax basis under the Code of the Healtheon Member's share of

the assets of the Company on the date hereof shall equal the Healtheon Member's

Capital Account plus one-half of the Company's liabilities on the date hereof,

(vi) the aggregate adjusted tax basis under the Code of the Fox Member's share

of the assets of the Company on the date hereof shall equal one-half of the

basis of such assets in the hands of the Company immediately prior to the

purchase by the Healtheon Member of its Interest, plus one-half of the

Company's liabilities at such time and (vii) the difference between amount

described in clauses (v) and (vi) above shall be treated as Section 704(c)

Property with respect to the Fox Member.

 

3.2 Percentage Interests. Subject to adjustment pursuant to Section

3.3 hereof, the Percentage Interest of each Member shall initially be as

follows:

 

Healtheon Member: 50%

Fox Member: 50%

 

The Percentage Interest of a Member may be adjusted from time to time pursuant

to Section 3.3 hereof.

 

3.3 Additional Capital.

 

(a) If, at any time, the Managing Member determines that the

Company requires additional funds for its continued operation or growth, the

Managing Member may make a loan (a "Member Loan") to the Company in an amount

equal to the funds so required, any such loan to bear

 

 

<PAGE> 13

 

 

interest, at the Prime Rate plus two percent on the date nearest the date of

the advance, which rate shall be adjusted annually, based on changes to the

Prime Rate on the anniversary of such Member Loan. For so long as any Member

Loan remains unpaid, no distributions shall be made by the Company to the

Members (whether before or after the Dissolution of the Company) in respect of

their Percentage Interests. Instead all of the Company's Available Cash shall

be paid to the Managing Member until each Member Loan and all interest accrued

thereon has been paid in full to the Managing Member. Payments in respect of

any Member Loan will be applied in the order that such loans were made, and all

payments will be applied first to accrued but unpaid interest and then to

reduce the outstanding principal amount of the loan. A Member Loan shall not

become due and payable until the earlier of: (A) the sale of the Fox Member's

Interest pursuant to Section 8.5 hereof or (B) the Dissolution of the Company.

Any Member Loan shall be prepayable in whole or in part at any time without

penalty.

 

(b) Except as set forth in this Section 3.3, no Member shall have

any obligation to make additional capital contributions to the Company.

 

3.4 Capital Accounts.

 

(a) A separate capital account (each a "Capital Account") shall be

maintained for each Member. Such Member's initial Capital Account shall be as

described in Section 3.1 above. Subject to the provisions of subsections (b),

(c) and (d) of this Section 3.4, the Capital Account of each Member shall be

(i) increased by (A) the amount of cash and the Gross Asset Value of any

property contributed to the Company by such Member (net of liabilities secured

by the property or to which the property is subject), and (B) Profits and any

other items of income and gain allocated to such Member pursuant to Section 3.5

hereof and (ii) decreased by (A) the amount of cash and the Gross Asset Value

of any property distributed to such Member (net of liabilities secured by the

property or to which the property is subject) and (B) the Losses and any other

items of deduction and loss allocated to such Member pursuant to Section 3.5,

and otherwise maintained in accordance with Treasury Regulations in order for

the allocation of Profits and Losses pursuant to Section 3.5.

 

(b) For purposes of this Section 3.4, an assumption of a Member's

unsecured liability by the Company shall be treated as a distribution of money

to that Member. An assumption of the Company's unsecured liability by a Member

shall be treated as a cash contribution to the Company by that Member.

 

(c) In the event a contribution of money or other property is made

to the Company other than a contribution made ratably by all existing Members,

then the Capital Accounts for the Members shall be adjusted for the

hypothetical "book" gain or loss that would have been realized by the Company

if all Company assets had been sold for their Gross Asset Values in a cash

sale, and shall be in proportion to the Percentage Interests of the Members. If

a determination of the Fair Market Value of the Company is made pursuant to

Section 3.3 in connection with any Additional Capital Contribution which would

also be subject to this Section 3.4(c), the Gross Asset Value of the Company's

assets shall be deemed to be equal to the Fair Market Value of the Company plus

its liabilities as determined pursuant to Section 3.3 hereof.

 

 

<PAGE> 14

 

 

(d) In the event that assets of the Company other than money are

distributed to a Member in liquidation of the Company, or in the event that

assets of the Company other than money are distributed to a Member in kind, in

order to reflect unrealized gain or loss, Capital Accounts for the Members

shall be adjusted for the hypothetical "book" gain or loss that would have been

realized by the Company if the distributed assets had been sold for their Gross

Asset Values in a cash sale. In the event of the liquidation of a Member's

interest in the Company, in order to reflect unrealized gain or loss, Capital

Accounts for the Members shall be adjusted for the hypothetical "book" gain or

loss that would have been realized by the Company if all Company assets had

been sold for their Gross Asset Values in a cash sale.

 

(e) The foregoing provisions of this Section 3.4 and the other

provisions of this Agreement relating to the maintenance of Capital Accounts

are intended to comply with Section 704(b) of the Treasury Regulations and will

be interpreted and applied in a manner consistent with such Treasury

Regulations and any amendment or successor provision thereto. The Members will

cause appropriate modifications to be made if unanticipated events might

otherwise cause this Agreement not to comply with Section 704(b) of the

Treasury Regulations, so long as such modifications do not cause a material

change in the relative economic benefits of the Members under this Agreement.

 

(f) If all or any part of an Interest is transferred in accordance

with this Agreement, the Capital Account of the Transferor that is attributable

to the transferred Interest will carry over to the Transferee.

 

3.5 Allocation of Items of Company Income, Gain, Loss, Deduction

and Credit.

 

(a) For purposes of this Agreement, the terms "Profits" and

"Losses" shall mean, for each Fiscal Year or other period, an amount equal to

the Company's taxable income or loss, as the case may be for such year or

period, determined in accordance with Section 703(a) of the Code (for this

purpose, all items of income, gain, loss and deduction required to be stated

separately pursuant to Section 703(a)(1) of the Code shall be included in

taxable income or loss), with the following adjustments:

 

(i) any income of the Company that is exempt from federal

income tax and not otherwise taken into account in computing Profits or Losses

pursuant to this paragraph shall be added to such taxable income or loss;

 

(ii) any expenditures of the Company described in Section

705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) of the Code

expenditures pursuant to Section 1.704-1(b)(2)(iv)(i) of the Treasury

Regulations, and not otherwise taken into account in computing Profits or

Losses pursuant to this Section shall be subtracted from such taxable income or

loss;

 

(iii) in the event the Gross Asset Value of any Company asset

is adjusted pursuant to subsection (b) or (c) of the definition thereof, the

amount of such adjustment shall be taken into account as gain or loss from the

disposition of such asset for purposes of computing Profits or Losses;

 

 

<PAGE> 15

 

 

(iv) gain or loss resulting from the disposition of any Company

asset with respect to which gain or loss is recognized for federal income tax

purposes shall be computed by reference to the Gross Asset Value of the asset

disposed of, notwithstanding that the adjusted tax basis of such asset differs

from its Gross Asset Value;

 

(v) in lieu of the depreciation, amortization, and other cost

recovery deductions taken into account in computing such taxable income or

loss, there shall be taken into account Depreciation for such Fiscal Year or

other period, computed in accordance with the definition thereof,

 

(vi) to the extent an adjustment to the adjusted tax basis of

any Company asset pursuant to Section 734(b) of the Code is required, pursuant

to Section 1.704-1(b)(2)(iv)(m)(4) of the Treasury Regulations, to be taken

into account in determining Capital Accounts as a result of a distribution

other than in liquidation of a Member's Interest in the Company, the amount of

such adjustment shall be treated as an item of gain (if the adjustment

increases the basis of the asset) or loss (if the adjustment decreases such

basis) from the disposition of such asset and shall be taken into account for

purposes of computing Profits or Losses; and

 

(vii) notwithstanding any other provision of this Section, any

items which are specially allocated pursuant to Section 3.5(c) hereof shall not

be taken into account in computing Profits and Losses.

 

(b) After giving effect to the special allocations set forth in

Section 3.5(c):

 

(i) All Company Profits shall be allocated to the Members as

follows:

 

(A) first, pro rata to the Members in proportion to and

to the extent of Losses previously allocated to each

Member pursuant to Section 3.5(b)(ii)(B) hereof and

not previously recouped pursuant to this Section

3.5(b)(i)(A); and

 

(B) thereafter, to the Members in accordance with their

respective Percentage Interests.

 

(ii) All Company Losses shall be allocated to the Members as

follows:

 

(A) first, pro rata to the Members in proportion to and

to the extent of Profits previously allocated to

such Members pursuant to Section 3.5(b)(i)(B) hereof

and not previously recouped pursuant to this Section

3.5(b)(ii)(A); and

 

(B) thereafter, to the Members in accordance with their

respective Percentage Interests.

 

 

<PAGE> 16

 

 

(c) Special Allocations. The following special allocations shall

be made in the following order:

 

(i) Minimum Gain Chargeback. Subject to the exceptions set

forth in Section 1.704-2(f) of the Treasury Regulations, if there is a net

decrease in Company Minimum Gain during a Fiscal Year, each Member shall be

specially allocated items of income and gain for Capital Account purposes for

such year (and, if necessary, for subsequent years) in an amount equal to such

Member's share of the net decrease in Company Minimum Gain during such year

(which share of such net decrease shall be determined under Section

1.704-2(g)(2)) of the Treasury Regulations. It is intended that this Section

3.5(c)(i) shall constitute a "minimum gain chargeback" as provided by Section

1.704-2(f) of the Treasury Regulations and shall be interpreted consistently

therewith.

 

(ii) Member Nonrecourse Debt Minimum Gain Chargeback. Subject

to the exceptions contained in Section 1.704-2(i)(4) of the Treasury

Regulations, if there is a net decrease in Member Nonrecourse Debt Minimum Gain

during a Fiscal Year, any Member with a share of such Member Nonrecourse Debt

Minimum Gain (determined in accordance with Section 1.704-2(i)(5)) of the

Treasury Regulations as of the beginning of such year shall be specially

allocated items of income and gain for Capital Account purposes for such year

(and, if necessary, for subsequent years) in an amount equal to such Member's

share of the net decrease in Member Nonrecourse Debt Minimum Gain (which share

of such net decrease shall be determined under Sections 1.704-2(i)(4) and

1.704-2(j)(2)) of the Treasury Regulations. It is intended that this Section

3.5(c)(ii) shall constitute a "partner nonrecourse debt minimum gain

chargeback" as provided by Section 1.704-2(i)(4) of the Treasury Regulations

and shall be interpreted consistently therewith.

 

(iii) Nonrecourse Deductions. Any Nonrecourse Deductions shall

be allocated to the Members in the same manner as Net Losses are allocated

pursuant to Section 3.5(b)(ii) hereof

 

(iv) Member Nonrecourse Deductions. Any Member Nonrecourse

Deductions shall be allocated to the Member that bears the Economic Risk of

Loss for the Member Nonrecourse Debt to which such deductions relate as

provided in Section 1.704-2(i)(1) of the Treasury Regulations. If more than one

Member bears the Economic Risk of Loss, such deduction shall be allocated

between or among such Members in accordance with the ratios in which such

Members share such risk of loss.

 

(v) Qualified Income Offset. In the event any Member

unexpectedly receives any adjustments, allocations, or distributions described

in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or

1.704-1(b)(2)(ii)(d)(6) of the Treasury Regulations (modified as appropriate,

by Sections 1.704-2(g)(1) and 1.704-2(i)(5)) of the Treasury Regulations, items

of Company income and gain for Capital Account purposes for such Fiscal Year

shall be specially allocated to the Member in an amount and manner sufficient

to eliminate, to the extent required by he Treasury Regulations, any Adjusted

Capital Account Deficit of the Member as quickly as possible, provided that an

allocation pursuant to this Section 3.5(c)(v) shall be made if and only to the

extent that the Member would have an Adjusted Capital Account Deficit after all

other allocations provided for in this Article III have been tentatively made

as if this Section 3.5(c)(v) were

 

 

<PAGE> 17

 

 

not in the Agreement.

 

(vi) Certain Section 754 Adjustment. To the extent any

adjustment to the adjusted tax basis of any Company asset pursuant to Section

732(d), Section 734(b) or Section 743(b) of the Code is required, pursuant to

Section 1.704-1 (b)(2)(iv)(m) of the Treasury Regulations, to be taken into

account in determining Capital Accounts as the result of a distribution to a

Member in complete liquidation of its Interest in the Company, the amount of

such adjustment to Capital Accounts shall be treated as an item of gain (if the

adjustment decreases such basis) and such gain or loss shall be specially

allocated to the Members in accordance with their interests in the Company as

determined under Section 1.704-1(b)(3) of the Treasury Regulations in the event

Section 1. 704-1(b)(2)(iv)(m)(2) of the Treasury Regulations applies, or to the

Member to whom such distribution was made in the event Section

1.704-1(b)(2)(iv)(m)(4) of the Treasury Regulations applies.

 

(vii) Limit on Loss Allocations. Notwithstanding the provisions

of Section 3.5(b)(11) hereof or any other provision of this Agreement to the

contrary, Net Losses (or items thereof) will not be allocated to a Member if

such allocation would cause or increase a Member's Adjusted Capital Account

Deficit and will be reallocated to the other Members in proportion to their

Percentage Interests, subject to the limitations of this Section 3.5(c)(vii).

 

(viii) Curative Allocations. The allocations under Section

3.5(c)(1) through (c)(vii) (such allocations, the "Regulatory Allocations") are

intended to comply with certain requirements of the Treasury Regulations. It is

the intent of the Members that, to the extent possible, all Regulatory

Allocations shall be offset either with other Regulatory Allocations or with

special allocations of other items of income, gain, loss or deduction pursuant

to this Agreement. Therefore, notwithstanding any other provision of this

Agreement (other than the Regulatory Allocations), the Company shall make such

offsetting special allocations of income, gain, loss or deduction in whatever

manner it determines appropriate so that, after such offsetting allocations are

made, each Member's Capital Account balance is, to the extent possible, equal

to the Capital Account balance such Member would have had if the Regulatory

Allocations were not part of the Agreement and all items were allocated

pursuant to Section 3.5(b), as the case may be. In exercising its discretion

under this Section 3.5(c)(viii), the Company shall take into account future

Regulatory Allocations under Section 3.5(c)(i) through (c)(vii) that are likely

to offset other Regulatory Allocations previously made.

 

3.6 Distributions.

 

(a) The Company shall repay all principal and accrued interest on

Member Loans (in the order of payment contemplated by Section 3.3(b) hereof)

prior to making any cash distributions to the Members from Available Cash.

 

(b) No Member shall have the right to withdraw any amount from its

Capital Account. No Member shall have the right to demand or, to receive any

distribution other than distributions of Available Cash pursuant to Section

3.6(c) hereof, without the unanimous approval of the Members. No Member shall

have the right to receive a distribution of property other than cash

 

 

<PAGE> 18

 

 

from the Company, unless otherwise agreed by all the Members.

 

(c) The Company shall, from time to time, but not without consent

of the Board, distribute Available Cash to the Members. Any such distributions

shall be made in accordance with the Members' Percentage Interests. Nothing set

forth in this Section 3.6 shall impair the right or relieve the duty of the

Managing Member, or if there is no Managing Member the Board, as provided in

this Agreement to establish reasonable cash reserves,

 

3.7 Withholding. If required by the Code or by state or local law, the

Company will withhold any required amount from distribution to a Member for

payment to the appropriate taxing authority. Any amount so withheld from a

Member will be treated as a distribution by the Company to such Member. Each

Member will timely file any agreement that is required by any taxing authority

in order to avoid any withholding obligation that would otherwise be imposed on

the Company.

 

3.8 Distribution Limitation. Notwithstanding any other provision of

this Agreement, the Company will not make any distribution to the Members if,

after the distribution, the liabilities of the Company (other than liabilities

to Members on account of their Percentage Interests) would exceed the Fair

Market Value of the Company's assets. With respect to any property subject to a

liability for which the recourse of creditors is limited to the specific

property, such property will be included in assets only to the extent the

property's Fair Market Value exceeds its associated liability, and such

liability will be excluded from the Company's liabilities.

 

3.9 Company Funds. The funds of the Company shall be deposited in such

bank accounts or invested in investments as shall be determined by the Managing

Member, or if there is no Managing Member, the Board. The Company's funds shall

not be commingled with funds not belonging to the Company and shall be used

only for the affairs or business of the Company. It shall be the responsibility

of the Managing Member to establish a cash management plan pursuant to which

the funds of the Company will be managed.

 

3.10 Capital Contribution. Each Member is liable to the Company for

any Capital Contribution or distribution that has been wrongfully or

erroneously returned or made to such Person in violation of the Act or this

Agreement.

 

ARTICLE IV

MANAGEMENT

 

4.1 Management of the Company's Business.

 

(a) The management of the Company shall be vested in the Managing

Member. Except as provided in Section 4.3 hereof, or for actions and

determinations which pursuant to this Agreement can be taken or made only with

the consent of all of the Members, the Managing Member shall manage the affairs

and business of the Company, and the Managing Member shall possess all powers

necessary, convenient or appropriate to carrying out the purposes and business

of the Company, including, without limitation. doing all things and taking all

actions necessary to

 

 

<PAGE> 19

 

 

carry out the terms and provisions of this Agreement.

 

(b) Nothing contained in this Article IV shall impose any

obligation on any Person doing business or dealing with the Company to inquire

as to whether the Managing Member has exceeded its authority in executing any

contract, lease, mortgage, note, deed or other instrument on behalf of the

Company, and any such Person shall be fully protected in relying upon the

plenary authority of the Managing Member.

 

(c) The Managing Member shall serve without compensation for its

services. The Managing Member may delegate such of its respective powers and

authority to officers, employees and agents of the Company as the Managing

Member shall deem necessary or appropriate for the conduct of the Business.

 

(d) Other than the Managing Member, no Member shall have any

authority to act for, or to assume any obligation or responsibility on behalf

of, the Company, except as expressly provided herein or as expressly approved

by written consent of all the Members.

 

4.2 Board.

 

(a) The Members hereby form a supervisory board (the "Board"),

which shall be responsible for taking all action required under this Agreement

to be taken by the Board. The Board shall consist of three representatives (the

"Representatives"), all of whom shall be appointed by the Healtheon Member The

Healtheon Member agrees to notify the Fox Member of the initial Representatives

appointed by it.

 

(b) The Healtheon Member may at any time remove the

Representative(s) and appoint substitute Representative(s) in their stead, by

delivering written notice of such substitution to the Fox Member. The presence

or participation of at least two of the three Representatives shall constitute

a quorum for the taking of any action. Except as otherwise provided in Section

4.3 or as otherwise provided in this Agreement, all actions required or

permitted to be taken by the Board must be by the affirmative vote, at a

meeting at which a quorum is present, of a majority of Representatives. The Fox

Member shall have the right to bring non-voting representatives to any meeting

of the Board. No Representative shall be entitled to compensation from the

Company for serving in such capacity.

 

(c) The Board shall meet no less often than quarterly and shall

establish meeting times, dates and places and requisite notice requirements and

adopt rules or procedures consistent with the terms of this Agreement, which

shall include rules and procedures for the dissemination of written information

to the Members concerning the items to be acted upon at any regular or special

meeting of the Board. Any Member may call a special meeting of the Board for

any purpose by giving the other Member at least five (5) Business Days' notice

thereof, except in the case of an emergency, in which case, such notice as is

practicable shall be sufficient. The Board may meet by means of conference

telephone call, and any Representative or non-voting representative may

participate in any Board meeting by conference telephone call. Any action that

may be taken at a meeting of the Board may be taken without a meeting by

written consent of the number of

 

 

<PAGE> 20

 

 

Representatives needed to authorize the action; provided, that all Members, are

given notice of such written consent at least 15 Business Days prior to its

effective date.

 

(d) The Managing Member shall keep the Board informed with respect

to all matters of material interest to the Members and shall in any event

report to the Board not less frequently than once each quarter with respect to

material matters relating to the business and affairs of the Company.

 

4.3 Extraordinary Actions. Neither the Company nor the Managing Member

nor the Board shall take any of the following actions without the prior

approval of the Fox Member.

 

(a) entry into areas of business other than the Business;

 

(b) any amendment of this Agreement, including changing the

Company's name, or any other organizational document of the Company;

 

(c) any action relating to the merger, sale, consolidation,

reorganization, Dissolution, winding up, Liquidation or similar transaction

involving all or substantially all of the Company or all or substantially all

of its assets;

 

(d) approval or adoption of accounting or tax principles

applicable to the Company;

 

(e) any decision to distribute cash or other assets of the

Company, except any distribution made pursuant to Section 3.6 hereof;

 

(f) the admission of additional Members (except as provided in

Section 8.1) or the issuance of any additional Interests to the Members;

 

(g) Subject to Section 8.1 hereof, approve the Transfer of any

Interest including a repurchase of an Interest by the Company; or

 

(h) any agreement by the Company to take any of the foregoing

actions.

 

4.4 Indemnification.

 

(a) No Member, Managing Member or Representative (including the

Tax Matters Member) (each, an "Indemnitee") shall be liable, in damages or

otherwise, to the Company or any Member for any act or omission performed or

omitted to be performed by it or him pursuant to the authority granted by this

Agreement, except if such act or omission results from such Person's own bad

faith, fraud, gross negligence, willful breach of this Agreement or willful or

wanton misconduct. To the fullest extent permitted by law, the Company shall

indemnify and hold harmless each Indemnitee from and against any and all

losses, claims, demands, costs, damages, liabilities (joint or several),

expenses of any nature (including reasonable attorneys' fees and

disbursements), judgments, fines, settlements, and other amounts ("Damages")

arising from any and all claims,

 

 

<PAGE> 21

 

 

demands, actions, suits or proceedings, whether civil, criminal, administrative

or investigative, in which an Indemnitee may be involved, or threatened to be

involved, as a party or otherwise, arising out of or incidental to the business

of the Company, regardless of whether an Indemnitee continues to be a Member,

Managing Member or Representative, or an officer, director, shareholder, member

or partner of such Member, Managing Member or Representative, at the time any

such liability or expense is paid or incurred, if (i) the Indemnitee acted in

good faith and in a manner it or he reasonably believed to be in, or not

opposed to, the interests of the Company, and, with respect to any criminal

proceeding, had no reason to believe this conduct was unlawful, and (ii) the

Indemnitee's conduct did not constitute bad faith, fraud, gross negligence,

willful breach of this Agreement, or willful or wanton misconduct. The

termination of any action, suit or proceeding by judgment, order, settlement,

conviction, or upon a plea of nolo contendere, or its equivalent, shall not, in

and of itself, create a presumption or otherwise constitute evidence that the

Indemnitee acted in a manner contrary to that specified in (i) or (ii) above.

 

(b) Notwithstanding anything contained in this Section 4.4, the

Company shall not indemnify and hold harmless any Indemnitee if a judgment or

other final adjudication adverse to such Indemnitee establishes: (i) that such

Indemnitee's acts were committed in bad faith or were the result of active and

deliberate dishonesty and were material to the cause of action so adjudicated

or (ii) that such Indemnitee personally gained financial profit or other

advantage to which he was not legally entitled.

 

(c) Expenses (including reasonable attorneys' fees and

disbursements) incurred in defending any claim, demand, action, suit or

proceeding, whether civil, criminal, administrative or investigative, hereof,

shall be paid by the Company in advance of the final disposition of such claim,

demand, action, suit or proceeding upon receipt of an undertaking by or on

behalf of the Indemnitee to repay such amount if it shall ultimately be

determined, by a court of competent jurisdiction from which no further appeal

may be taken or the time for any appeal has lapsed (or otherwise, as the case

may be) that the Indemnitee is not entitled to be indemnified by the Company as

authorized hereunder.

 

(d) The indemnification provided by this Section 4.4 shall be in

addition to any other rights to which each Indemnitee may be entitled under any

agreement or vote of the Members, as a matter of law or otherwise, both (i) as

to action in the Indemnitee's capacity as a Member, Managing Member or

Representative or as an officer, director, shareholder, member or partner of

Member, Managing Member or Representative and (ii) as to action in another

capacity, and shall continue as to an Indemnitee who has ceased to serve in

such capacity and shall inure to the benefit of the heirs, successors, assigns,

administrators and personal representatives of the Indemnitee.

 

(e) The Company may purchase and maintain insurance on behalf of

one or more Indemnitees and other Persons against any liability which may be

asserted against, or expense which may be incurred by, any such Person in

connection with the Company's activities, whether or not the Company would have

the power to indemnify such Person against such liability under the provisions

of this Agreement.

 

 

<PAGE> 22

 

 

(f) Any indemnification hereunder shall be satisfied only out of

the assets of the Company, and the Members and the Representatives shall not be

subject to personal liability by reason of these indemnification provisions.

 

(g) An Indemnitee shall not be denied indemnification in whole or

in part under this Section 4.4 because the Indemnitee had an interest in the

transaction with respect to which the indemnification applies if the

transaction was otherwise permitted by the terms of this Agreement.

 

(h) To the same extent that the Company will indemnify and advance

expenses to a Member, the Company may indemnify and advance expenses to any

officer, employee or agent of the Company.

 

4.5 Officers.

 

(a) The Managing Member shall appoint a chief executive officer

("CEO") of the Company. The CEO shall appoint a chief financial officer ("CFO")

and a chief operating officer ("COO"). The CEO shall have the authority to

select such other officers (other than a CFO and a COO) as may be necessary or

desirable to carry out the day-to-day management of the business and the

Company.

 

(b) The appointment of any Person as an officer or agent of the

Company will not, in and of itself, create any contractual rights between such

Person and the Company. The officers of the Company, acting in their capacities

as such, will be agents acting on behalf of the Company as principal.

 

ARTICLE V

LIABILITY OF A MEMBER

 

5.1 Limited Liability. Except as otherwise provided in the Act, the

debts, obligations and liabilities of the Company (whether arising in contract,

tort or otherwise) will be solely the debts, obligations and liabilities of the

Company, and no Member of the Company (including any Person who formerly held

such status) is liable or will be obligated personally for any such debt,

obligation or liability of the Company solely by reason of such status. No

individual trustee, officer, director, employee or agent of any Member will

have any personal liability for the performance of any obligation of such

Member under this Agreement.

 

5.2 Capital Contribution. Each Member is liable to the Company for any

Capital Contribution or distribution that has been wrongfully or erroneously

returned or made to such Person in violation of the Act, the Certificate or

this Agreement.

 

5.3 Reliance. Any Member will be fully protected in relying in good

faith upon the records of the Company and upon such information, opinions,

reports or statements by (a) any of the Company's other Members, employees or

committees or (b) any other Person who has been selected with reasonable care

as to matters such Member reasonably believes are within such other Person's

professional or expert competence. Matters as to which such reliance may be

made include the value

 

 

<PAGE> 23

 

 

and amount of assets, liabilities, Profits and Losses of the Company, as well

as other facts pertinent to the existence and amount of assets from which

distributions to Members might properly be made.

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

 

As of the date hereof, each of the Members hereby makes to the other

Member each of the representations and warranties set forth in this Article V1,

and such warranties and representations shall survive the execution of this

Agreement.

 

6.1 Due Incorporation, Authorization. Such Member is duly organized,

validly existing and in good standing under the laws of the jurisdiction of its

incorporation or formation and has the requisite power and authority to own its

property and carry on its business as owned and carried on at the date hereof

and as contemplated hereby. Such Member is duly licensed or qualified to do

business and in good standing in each of the jurisdictions in which the failure

to be so licensed or qualified would have a material adverse effect on its

financial condition or its ability to perform its obligations hereunder. Such

Member has the requisite power and authority to execute and deliver this

Agreement and each other agreement to which it is to be a party as contemplated

hereby and to perform its obligations hereunder and thereunder and the

execution, delivery and performance of this Agreement and each such other

agreement has been duly authorized by all necessary corporate or limited

liability company action. This Agreement constitutes the legal, valid and

binding obligation of such Member.

 

6.2 No Conflict. Neither the execution, delivery and performance of

this Agreement nor the consummation by such Member of the transactions

contemplated hereby will (a) conflict with, violate or result in a breach of

any of the terms, conditions or provisions of any law, regulation, order, writ,

injunction, decree, determination or award of any court, governmental

department, board, agency or instrumentality, domestic or foreign, or any

arbitrator, applicable to such Member, (b) conflict with, violate, result in a

breach of or constitute a default under any of the terms, conditions or

provisions of the articles of incorporation or bylaws or similar constituent

documents of such Member or of any material agreement or instrument to which

such Member is a party or by which such Member is or may be bound or to which

any of its material properties or assets is subject, (c) conflict with,

violate, result in a breach of, constitute a default under (whether with notice

or lapse of time or both), accelerate or permit the acceleration of the

performance required by, or require any consent, authorization or approval

under any indenture, mortgage, lease agreement or instrument to which such

Member is a party or by which such Member is or may be bound, or (d) result in

the creation or imposition of any lien upon any of the material properties or

assets of such Member, the effect of which could reasonably be expected to

materially impair such Member's ability to perform its obligations under this

Agreement.

 

6.3 No Conflict, No Default. There are no actions, suits, proceedings

or investigations pending or to the knowledge of such Member, threatened

against or affecting such Member or any of its properties, assets or businesses

in any court or before or by any governmental department,

 

 

<PAGE> 24

 

 

board, agency or instrumentality, domestic or foreign, or any arbitrator which

could, if adversely determined (or, in the case of an investigation could lead

to any action, suit, or proceeding, which if adversely determined could)

reasonably be expected to materially impair such Member's ability to perform

its obligations under this Agreement.

 

6.4 Unregistered Interests. Such Member (a) acknowledges that the

Interests are being acquired without registration under the Securities Act of

1933, as amended, or under similar provisions of state law, (b) represents and

warrants to the Company and the other Member that it is acquiring the Interest

for its own account, for investment and with no view to the distribution of the

Interest, and (c) agrees not to transfer or attempt to transfer such Interest

in the absence of registration under that Act and any applicable state

securities laws or an available exemption from such registration.

 

ARTICLE VII

BOOKS AND RECORDS; REPORTS TO MEMBERS

 

7.1 Books and Records.

 

(a) The following books and records of the Company shall be kept

at its principal office:

 

(i) a current list of the full name and last known business,

residence or mailing address of each Member;

 

(ii) originals of the Certificate and of this Agreement, and

any amendments thereto (and any signed powers of attorney pursuant to which any

such document was executed);

 

(iii) a copy of the Company's federal, state and local income

tax returns and reports and annual financial statements of the Company, for the

five most recent years; and

 

(iv) minutes, or minutes of action or written consent, of every

meeting of the Board.

 

At the Company's expense, there will also be kept at the Company's principal

office separate books of accounts for the Business, which will be a true and

accurate record of all costs and expenses incurred, all credits made and

received and all income derived in connection with the operation of the

Business in accordance with GAAP.

 

(b) Each of the Members or its duly authorized representatives

shall have the right, upon reasonable notice, at its own expense, to examine

and inspect, during normal business hours and for any lawful purpose related to

the affairs of the Company or the investment in the Company by such Member, any

of the books of account, and business records of the Company, and to copy any

such books of account and business records of the Company. The Company's books

of account and business records shall be filed and preserved for a period of at

least five years or such

 

 

 

<PAGE> 25

 

 

longer period as required by law.

 

7.2 Financial Reports; Subscriber Reports. The Managing Member shall

deliver or cause to be delivered to each Member, no later than forty-five (45)

days after the close of each of the first three quarters of the Company's

Fiscal Year, and sixty (60) days after the end of each such Fiscal Year, a

financial report of the business and operations of the Company prepared in

accordance with GAAP, relating to such period, which report shall include a

balance sheet as of the end of such period, a statement of income (loss) and

members' Capital Accounts and cash flows (including sources and uses of funds)

for the period then ended, and in each case a comparison of the period then

ended with the corresponding period in the Fiscal Year immediately preceding

such periods, which, in the case of the report furnished after the close of the

Fiscal Year, shall be audited by the Company's independent certified public

accountants. The quarterly financial reports may in each case be subject to

normal year-end adjustments. In addition to the foregoing financial statements,

the financial report furnished after the close of each Fiscal Year shall also

include a statement of cash flows, and allocations to the Members of the

Company's taxable income, gains, losses, deductions and credits. The Company

will initially engage Arthur Andersen LLP as its independent certified public

accountants and thereafter such other accounting firm as the Members shall

determine. The Company shall bear the cost of each annual audit and the cost of

any other services furnished to the Company by its independent certified public

accountants as provided herein.

 

7.3 Tax Returns and Information.

 

(a) The Managing Member is hereby designated "Tax Matters Member"

for the Company and shall be so designated in each Federal information return

filed on behalf of the Company. The Tax Matters Member shall not be liable to

the Company or any Member for any act or omission taken or suffered by it in

such capacity in good faith and in the belief that such act or mission is in or

is not opposed to the best interests of the Company; provided, however that

such act or omission is not in violation of this Agreement and does not

constitute gross negligence, fraud or a willful violation of law. Within five

Business Days of receipt, each Member shall give to each other Member written

notice of receipt from any taxing authority of any notification of an audit or

investigation of the Company.

 

(b) The Tax Matters Member shall cause income and other required

Federal, state and local tax returns for the Company to be prepared. The Tax

Matters Member shall make or maintain in effect an election under Section 754

of the Code to adjust the basis of Company Property under Sections 734 and 743

of the Code for taxable years ending subsequent to the Effective Date upon the

request of any Member. The Tax Matters Member shall make such other elections

as it shall deem to be in the best interests of the Company and the Members.

The cost of preparation of such returns by outside preparers, if any, shall

become by the Company.

 

(c) The Tax Matters Member shall cause to be provided to each

Member no later than December 31 of each year information concerning the

Company's projected taxable income or loss and each class of income, gain,

loss, deduction or credit which is relevant to reporting a Member's share of

Company income, gain, loss, deduction or credit for purposes of Federal or

state income tax. Information required for the preparation of a Member's income

tax returns shall be

 

 

<PAGE> 26

 

 

furnished to the Members as soon as possible after the close of the Company's

Fiscal Year.

 

ARTICLE VIII

COMPANY INTERESTS; RESTRICTIONS ON TRANSFER

 

8.1 Transfer. No Member shall Transfer any Interest owned by it except

for (a) Transfers to an Affiliate of the Transferor at the time, provided that

the Transferee remains an Affiliate of the Transferor immediately after the

Transfer; (b) pledges or grants of a security interest to secure loans to the

Company; or (c) Transfers made in compliance with Section 8.5 hereof, if

applicable. Any Transfer of an Interest other than as specifically permitted by

this Section 8.1 shall be void and of no effect. It is agreed that if the Fair

Market Value of any Member's Interest equals 25% or more of the Fair Market

Value of such Member's total assets determined on the date any proposed

Transfer of any equity interest in such Member is to be consummated, any

Transfer of any equity interest in such Member shall constitute a Transfer

hereunder. The Members shall be responsible to cause the owners of their

respective equity interests to enter into agreements as may be necessary to

enable such Member to ensure compliance with this provision.

 

8.2 Admission as a Member. No Transferee of any Interests from a

Member shall be admitted to the Company as a Member unless the Transfer shall

have been made in accordance with this Agreement and the Transferee shall have

executed an instrument satisfactory to the non-Transferring Member, whereby

such Transferee agrees to abide by the terms and conditions of this Agreement

and become a Member of the Company.

 

8.3 No Right to Withdraw. No Member shall have any right to resign or

otherwise withdraw from the Company prior to the dissolution and winding up of

the Company, without the express written consent of the other Member.

 

8.4 Corporate Conversion

 

(a) Upon the execution of this Agreement, it is the express

intention and understanding of the existing Members and those Persons who

became Members at the time of the execution of this Agreement that upon the

occurrence of certain events the Company shall be converted into a corporation

in the manner set forth herein by the action of the Board and without the

necessity of any action or any investment decision on the part of any Member.

 

(b) Upon the determination by the Board, the Managing Member shall

cause a Corporate Conversion by merger into another corporation or otherwise,

and in connection therewith cause the conversion of the Interests into the

capital stock of any resulting corporation having relative rights, limitations,

preferences and other terms consistent with the Interests so converted.

 

(c) The Members shall have no appraisal rights pursuant to the

Act, applicable law or otherwise in connection with a Corporate Conversion or

any other transaction authorized under this Agreement.

 

 

<PAGE> 27

 

 

(d) In connection with the consummation of a Corporate Conversion,

the Board shall have the authority to merge, consolidate or reorganize one or

more of the subsidiaries with one or more other subsidiaries or other entities

wholly-owned directly or indirectly by the Company or the surviving corporation

in the Corporate Conversion.

 

(e) The Board is specifically authorized to take any and all

further action, and to execute, deliver and file any and all additional

agreements, documents or instruments, as it may determine to be necessary or

appropriate in order to effectuate the provisions of this Section 8.4, and each

Member hereby agrees to execute, deliver and File any such agreements,

documents or instruments or to take such action as may be reasonably requested

by the Board for the purpose of effectuating the provisions of this Section

8.4.

 

8.5 Put/Call.

 

(a) At any time within the 45 day period commencing on the fifth

anniversary of the Effective Date, the Fox Member shall have the right to

require the Healtheon Member to purchase (the "Put") from the Fox Member, and

the Healtheon Member shall have the right to require the Fox Member to sell to

the Healtheon Member (the "Call"), all (but not less than all) of he Fox

Member's Interests in the Company; provided, however, that if the Fox

Entertainment Group, Inc. or any of its Affiliates acquire all of the member

interests in the Fox Member, the Fox Member shall notify the Healtheon Member

of such acquisition and the Put/Call shall be exercisable within the 45-day

period commencing on the date of such notice. The parties shall structure the

Transfer of Interests pursuant to the Section as a transaction which qualifies

as a tax-free reorganization under Section 368 of the Code. The consideration

due upon consummation of the Put or the Call, as the case may be, shall be

$1.00.

 

(b) The closing of the purchase and sale pursuant to this Section

8.5 shall be held t the principal place of business of the Company or at such

other mutually acceptable place on a mutually acceptable date no later than 10

days after the expiration or early termination of the applicable waiting period

under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR") or the

completion of other applicable regulatory proceedings. The parties agree to

cooperate with each other in filing all necessary notices and related materials

to comply with the provisions of HSR or other regulatory requirements, if

applicable. At such closing, the Fox Member shall assign to the Healtheon

Member, or its designees, the Company Interest of the Fox Member, and shall

execute such documents and instruments as may be necessary to effectuate the

sale of the Interest free and clear of all Liens. The Fox Member shall

represent and warrant in writing that it is the owner and older of the Interest

which it is selling, free and clear of all Liens (other than pledges or

security interests that secure indebtedness of the Company), that the Fox

Member is the record and beneficial owner of the such Interest, and that it has

the full right, power and authority to convey such Interest of the Healtheon

Member.

 

 

<PAGE> 28

ARTICLE IX

DISSOLUTION AND LIQUIDATION

 

 

 

9.1 Dissolution. Dissolution of the Company will occur upon the

happening of any of the following events:

 

(a) the sale or other disposition of all or substantially

all of the Company's assets;

 

(b) the affirmative vote of all of the Members; or

 

(c) the entry of a decree of judicial dissolution under the

Act.

 

9.2 Exclusive Means of Dissolution. The exclusive means by which the

Company may be dissolved are set forth in 9.1. The Company will not be

dissolved upon the death, retirement, resignation, expulsion, bankruptcy or

dissolution of any Member or upon the occurrence of any other event which

terminates the continued membership of any Member in the Company.

 

9.3 Liquidation. Upon Dissolution of the Company, the Company will

immediately proceed to wind up its affairs and liquidate pursuant to this 9.3.

Following Dissolution, the Members shall appoint a person to serve as the

liquidating trustee and thus be charged with the duty to wind up the affairs of

the Company and distribute its assets as provided herein. A reasonable time

will be allowed for the orderly Liquidation of the Company and the discharge of

liabilities to creditors so as to enable the Company to minimize any losses

attendant upon Liquidation. Any gain or loss on disposition of any Company

assets in Liquidation will be allocated to Members in accordance with the

provisions of Section 3.6. Any liquidating trustee is entitled to reasonable

compensation or services actually performed, as approved by the Board; and may

contract for such assistance in the liquidating process as such Person deems

necessary or desirable. Until the filing of a certificate of cancellation under

9.9, and without affecting the liability of the Members and without imposing

liability on the liquidating trustee, the liquidating trustee may settle and

close the Company's business, prosecute and defend suits, dispose of its

property, discharge or make provision for its liabilities, and make

Distributions in accordance with the priorities set forth in this Article.

 

9.4 Priority of Payment. If the Company is dissolved the assets of the

Company will be distributed in Liquidation in the following order:

 

(a) First, to creditors by the payment or provision for payment of

the debts and liabilities of the Company (other than any loans or advances that

may have been made by any member or Affiliate) and the expenses of Liquidation;

 

(b) Second, to the setting up of any reserves that are reasonably

necessary for any contingent, conditional or unmatured liabilities or

obligations of the Company;

 

(c) Third, to the repayment of any loans or advances to the

Company that may have been made by any Member or any Affiliate of a Member

(according to the relative priority of repayment of such loans or advances and

proportionally among loans or advances of equal priority if the amount

available for repayment is insufficient for payment in full); and

 

 

<PAGE> 29

 

 

(d) Fourth, to the Members in proportion to the positive balances

in their respective Capital Accounts after such Capital Accounts have been

adjusted for all allocations of Profits and Losses and items thereof for the

Fiscal Year during which such liquidation occurs.

 

9.5 Liquidating Distributions. If the Company is dissolved, the

liquidating distributions due to the Members will be made by selling the assets

of the Company and distributing the net proceeds. Notwithstanding the preceding

sentence, but only upon the affirmative vote of all Members, the liquidating

distributions may be made by distributing the assets of the Company in kind to

the Members in proportion to the amounts distributable to them pursuant to

Section 9.4, valuing such assets at their Fair Market Value (net of liabilities

secured by such property that the Member takes subject to or assumes) on the

date of distribution. Each Member agrees to save and hold harmless the other

Members from such Member's proportionate share of any and all such liabilities

which are taken subject to or assumed. Appropriate and customary prorations and

adjustments will be made incident to any distribution in kind. The Members will

look solely to the assets of the Company for the return of their Capital

Contributions, and if the assets of the Company remaining after the payment or

discharge of the debts and liabilities of the Company are insufficient to

return such contributions, they will have no recourse against any other Member.

The Members acknowledge that Section 9.4 may establish distribution priorities

different from those set forth in the provisions of the Act applicable to

distributions upon Liquidation, and the Members agree that they intend, to that

extent, to vary those provisions by this Agreement.

 

9.6 No Restoration Obligation. Nothing contained in this Agreement

imposes on any Member an obligation to make an Additional Capital Contribution

in order to restore a deficit Capital Account upon Liquidation of the Company.

 

9.7 Timing. Final distributions in Liquidation will be made by the end

of the Company's Fiscal Year in which such actual Liquidation occurs (or, if

later, within 90 days after such event) in the manner required to comply with

the Section 704(b) of the Treasury Regulations. Payments or distributions in

Liquidation may be made to a liquidating trust established by the Company for

the benefit of those entitled to payments under Section 9.4, in any manner

consistent with this agreement and the Section 704(b) of the Treasury

Regulations.

 

9.8 Liquidating Reports. A report will be submitted with each

liquidating distribution to Members made pursuant to 9.5, showing the

collections, disbursements and distributions during he period which is

subsequent to any previous report. A final report, showing cumulative

collections, disbursements and distributions, will be submitted upon completion

of the Liquidation.

 

9.9 Certificate of Cancellation. Upon Dissolution of the Company and

the completion of the winding up of its business, the Company will file a

certificate of cancellation (to cancel the Certificate of Formation) with the

Delaware Secretary of State pursuant to the Act. At such time, the Company will

also file an application for withdrawal of its certificate of authority in any

jurisdiction where it is then qualified to do business. A certificate of

cancellation will also be filed at any time when there are no Members.

 

 

<PAGE> 30

 

 

ARTICLE X

ADDITIONAL AGREEMENTS

 

10.1 Indemnification.

 

(a) To the fullest extent permitted by law, the Fox Member shall

indemnify and hold harmless the Healtheon Member and the Company from and

against any and all Damages arising from any and all claims, demands, actions,

suits or proceedings, whether civil, criminal, administrative or investigative,

brought or threatened to be brought by any member or former member of the Fox

Member against the Company or the Healtheon Member, as a party or otherwise,

arising out of the Healtheon Member's acquisition of its Membership Interest or

any transaction contemplated pursuant to this Agreement.

 

(b) Expenses (including reasonable attorneys' fees and

disbursements) incurred in defending any claim, demand, action, suit or

proceeding, whether civil, criminal, administrative or investigative, hereof,

shall be paid by the Fox Member in advance of the final disposition of such

claim, demand, action, suit or proceeding upon receipt of an undertaking by or

on behalf of the Company or Healtheon Member to repay such amount if it shall

ultimately be determined, by a court of competent jurisdiction from which no

further appeal may be taken or the time for any appeal has lapsed (or

otherwise, as the case may be) that the Company or Healtheon Member is not

entitled to be indemnified by the Fox Member as authorized under 10.1 (a)

hereof.

 

10.2 Galaxy Asset License. The Fox Member shall grant to the Company

and to the Healtheon Member a non-exclusive, worldwide, royalty-free, perpetual

licenses to use the Galaxy Asset in forms and substance to be mutually agreed

upon by the parties.

 

ARTICLE XI

MISCELLANEOUS

 

11.1 Waiver of Partition. Except as may be otherwise provided by law

in connection with the winding-up, liquidation and dissolution of the Company,

each Member hereby irrevocably waives any and all rights that it may have to

maintain an action for partition of any of the Company Property.

 

11.2 Modification, Waivers. This Agreement may be modified or amended

only with the written consent of each Member. Except as otherwise specifically

provided herein, no Member shall be released from its obligations hereunder

without the written consent of the other Member. The observance of any terms of

this Agreement may be waived (either generally or in a particular instance and

either retroactively or prospectively) by the party or parties entitled to

enforce such term, but any such waiver shall be effective only if in a writing

signed by the party or parties against which such waiver is to be asserted.

Except as otherwise specifically provided herein, no delay on the part of any

party hereto in exercising any right, power or privilege hereunder shall

operate as a waiver thereof, nor shall any waiver on the part of any party

hereto of any right, power or privilege hereunder operate as a waiver of any

other right, power or privilege hereunder nor shall any single

 

 

<PAGE> 31

 

 

or partial exercise of any right, power or privilege hereunder preclude any

other or further exercise thereof or the exercise of any other right, power or

privilege hereunder.

 

11.3 Entire Agreement. This Agreement, and the documents expressly

referred to herein, and all related documents, each as amended, constitute the

entire agreement among the Members with respect to the subject matter hereof

and supersede any prior agreement or understanding between or among the Members

with respect to such subject matter.

 

11.4 Severability. If any provision of this Agreement, or the

application of such provision to any Person or circumstance, shall be held

invalid, the remainder of this Agreement or the application of such provision

to other Persons or circumstances shall not be affected thereby; provided,

however, that the parties shall negotiate in good faith with respect to an

equitable modification of the provision or application thereof held to be

invalid.

 

11.5 Notices. All notices, requests, demands, consents and other

communications required or permitted to be given hereunder shall be in writing

and shall be deemed to have been duly given on the date delivered by hand or on

the third Business Day after such notice is mailed by registered or certified

mail, postage prepaid, and, pending the designation by written notice of

another address, addressed as follows:

 

If to the Fox Member:

 

c/o News America Incorporated

1211 Avenue of the Americas

New York, New York 10036

Telecopier: (212) 768-2029

Attn: Arthur M. Siskind, Esq.

 

With a copy to:

 

Squadron, Ellenoff, Plesent & Sheinfeld, LLP

551 Fifth Avenue

New York, New York 10 176

Attention: Joel I. Papernik, Esq.

Telecopier: (212) 697-6686

 

If to the Healtheon Member:

 

c/c, Healtheon/WebMD Corporation

400 The Lenox Building

Atlanta, Georgia 30326

Telephone: (404) 479-7600

Telecopier: (404) 479-7651

Attention: Jeffrey T. Arnold

Chief Executive Officer

 

 

<PAGE> 32

 

 

With a copy to:

 

Nelson Mullins Riley & Scarborough, L.L.P.

Bank of America Corporate Center

100 N. Tryon Street, Suite 2600

Charlotte, North Carolina 28202

Telecopier: (704) 377-4814

Attention: H. Bryan Ives 111, Esq.

C. Mark Kelly, Esq.

 

11.6 Successors and Assigns. Except as otherwise specifically

provided herein, this Agreement shall be binding upon and inure to the benefit

of the Members and their legal representatives, successors and permitted

assigns.

 

11.7 Counterparts. This Agreement may be executed in one or more

counterparts, all of which together shall constitute one and the same

instrument.

 

11.8 Heading; Cross-references. The Article and Section headings in.

this Agreement are for convenience of reference only, and shall not be deemed

to alter or affect the meaning or interpretation of any provisions hereof.

 

11.9 Construction. None of the provisions of this Agreement shall be

for the benefit of or enforceable by any creditors of the Company. No one,

including but not limited to the Members or any creditor of the Company or any

of its Members, shall have any rights under this Agreement against any

Affiliate of any Member.

 

11.10 Property Rights; Confidentiality. All books, records and

accounts maintained exclusively for the Company (including, without limitation,

marketing reports and all other data whether stored on paper or in electronic

or other form), and any contracts or agreements (including, without limitation,

agreements for the purchase, lease or license of programming) entered into by

or exclusively on behalf of the Company, shall at all times be the exclusive

property of the Company. All property (real or personal or mixed) purchased

with Company funds, and all moneys held or collected for or on behalf of the

Company shall at all times be the exclusive property of the Company. Except as

expressly agreed to by the Members, no Member shall, during the period such

Member is a Member and for a period ending on the later of two (2) years after

such Member has ceased to be a Member, disclose any confidential or proprietary

information with respect to the Company to any Person, except (a) with the

prior written consent of the other Member; (b) to the extent necessary to

comply with law or the valid order of a court of competent jurisdiction, in

which event the party making such disclosure shall so notify the other Member

as promptly as practicable (and, if possible, prior to making such disclosure)

and shall seek confidential treatment of such information; (c) as part of its

normal reporting or review procedure to its parent company, its auditors and

its attorneys; provided, however. that such Member shall be liable for any

breach by such parent company, auditors or attorneys of any provision of this

Section 11.10; (d) in connection with the enforcement of such Member's rights

hereunder; (e) disclosures to an Affiliate of, or

 

 

<PAGE> 33

 

 

professional advisor to, such Member in connection with the performance by such

Member of its obligations hereunder; provided, however, that such Member shall

be liable for any breach by such Affiliate or professional advisor of any

provision of this Section; and (f) to a prospective purchaser of all or a

portion of such Member's Interest in connection with a sale in accordance with

the terms of this Agreement; provided, however, that such Member shall be

liable for any breach by such prospective purchaser of any provision of this

Section. Except as provided in the preceding sentence, no Member, nor any of

its Affiliates, shall, during the periods referred to in such sentence, use any

confidential or proprietary information with respect to the Company other than

for the benefit of the Company. This Section 11.10 hereof shall survive the

termination of this Agreement, the Dissolution of the Company, the withdrawal

of any Member and the Transfer of the Interest of any Member.

 

11.11 Further Actions. Each Member shall execute and deliver such

other certificates, agreements and documents, and take such other actions, as

may reasonably be required in connection with the formation and continuation of

the Company and the achievement of its purposes.

 

11.12 Governing Law; Forum. This Agreement will be governed by, and

construed in accordance with the laws of the State of Delaware without regard

to any conflicts of laws rules. Any conflict or apparent conflict between this

Agreement and the Act will be resolved in favor of this Agreement, except as

otherwise required by the Act.

 

11.13 Expenses of the Parties. All expenses incurred by or on behalf

of the parties hereto in connection with the authorization, preparation and

consummation of this Agreement, including, without limitation, all fees and

expenses of agents, representatives, counsel and accountants employed by the

parties hereto in connection with the authorization, preparation, execution and

consummation of this Agreement shall be borne solely by the party who shall

have incurred the same.

 

[SIGNATURE PAGE FOLLOWS]

 

 

<PAGE> 34

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to

be executed by their officers or members hereunto duly authorized as of the

date first written above.

 

HEALTHEON/WEBMD INTERNET

CORPORATION

 

 

 

By: /s/

------------------------

Name: W. Michael Heekin

Title: Vice President

 

AHN/FIT INTERNET, LLC

 

By: /s/

-----------------------

Name: Daniel Fawcett

Title: Vice President

 

The undersigned, by executing this Agreement, hereby unconditionally

guarantees the full and prompt payment and performance of all obligations of

the Healtheon Member set forth in this Agreement. This is a guaranty of payment

and not of collection.

 

HEALTHEON/WEBMD CORPORATION

 

 

By: /s/

------------------------

Name: W. Michael Heekin

Title: Exec. Vice President

 

The undersigned, by executing this Agreement, hereby unconditionally

guarantees the full and prompt payment and performance of all obligations of

the Fox Member set forth in this Agreement. This is a guaranty of payment and

not of collection.

 

THE NEWS CORPORATION LIMITED

 

By: /s/

------------------------

Name: Arthur Siskind

Title: Director

 

 

<PAGE> 35