<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)/1/
HEALTHEON/WEBMD CORPORATION
-------------------------------------------
(Name of Issuer)
Common Stock, $.0001 par value
-------------------------------
(Title of Class of Securities)
422209106
---------
(CUSIP Number)
Arthur M. Siskind, Esq.
The News Corporation Limited
c/o News America Incorporated
1211 Avenue of the Americas
New York, New York 10036
(212) 852-7000
--------------
with copies to:
Joel I. Papernik, Esq.
Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
(212) 661-6500
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 26, 2000
--------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box [].
Note. Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
(Continued on following pages)
/1/The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of the
Exchange Act (however, see the Notes).
<PAGE>
- --------------------------------------------------------------------------------
1 Name of Reporting Persons/I.R.S. Identification Nos. of Above Persons
The News Corporation Limited
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
[] (a)
(b) []
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
WC, OO
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to
Item 2(d) or 2(e)
[]
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
South Australia, Australia
- --------------------------------------------------------------------------------
Number of
Shares 7 Sole Voting Power
Beneficially 23,282,645/1/
Owned by -----------------------------------------------------------
Each
Reporting 8 Shared Voting Power
Person with -0-
-----------------------------------------------------------
9 Sole Dispositive Power
23,282,645/1/
-----------------------------------------------------------
10 Shared Dispositive Power
-0-
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
23,282,645/1/
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares []
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
13.1%/2/
- --------------------------------------------------------------------------------
14 Type of Reporting Person
CO
- --------------------------------------------------------------------------------
- --------------------------
/1/ Consists of 2,000,000 shares of Common Stock, par value $.0001 per share
("Common Stock"), of Healtheon/WebMD Corporation ("Healtheon/WebMD") issued
pursuant to the Purchase Agreement (as hereinafter defined) and 21,282,645
shares of Common Stock into which 155,951 shares of Series A Payment-in-Kind
Preferred Stock, par value $.0001 per share ("Series A Preferred Stock") issued
pursuant to the Purchase Agreement are convertible.
/2/ Calculated based on (i) 154,882,926 shares of Common Stock outstanding on
January 26, 2000, (ii) 2,000,000 shares of Common Stock issued pursuant to the
Purchase Agreement; and (iii) 21,282,645 shares of Common Stock deemed to be
outstanding into which 155,951 shares of Series A Preferred Stock issued
pursuant to the Purchase Agreement are convertible.
-2-
<PAGE>
- --------------------------------------------------------------------------------
1 Name of Reporting Persons/S.S. or I.R.S. Identification Nos. of Above
Persons
News America Incorporated/13-3249610
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
2 [] (a)
(b) []
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
WC, OO
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e) []
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware, U.S.A.
- --------------------------------------------------------------------------------
Number of 7 Sole Voting Power
Shares 23,282,645/1/
Beneficially --------------------------------------------------
Owned by
Each 8 Shared Voting Power
Reporting -0-
Person with --------------------------------------------------
9 Sole Dispositive Power
23,282,645/1/
--------------------------------------------------
10 Shared Dispositive Power
-0-
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
23,282,645/1/
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares []
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
13.1%/2/
- --------------------------------------------------------------------------------
14 Type of Reporting Person
CO
- --------------------------------------------------------------------------------
/1/ Consists of 2,000,000 shares of Common Stock issued pursuant to the Purchase
Agreement and 21,282,645 shares of Common Stock into which 155,951 shares
of Series A Preferred Stock issued pursuant to the Purchase Agreement are
convertible.
/2/ Calculated based on (i) 154,882,926 shares of Common Stock outstanding on
January 26, 2000, (ii) 2,000,000 shares of Common Stock issued pursuant to the
Purchase Agreement; and (iii) 21,282,645 shares of Common Stock deemed to be
outstanding into which 155,951 shares of Series A Preferred Stock issued
pursuant to the Purchase Agreement are convertible.
-3-
<PAGE>
- --------------------------------------------------------------------------------
1 Name of Reporting Persons/S.S. or I.R.S. Identification Nos. of Above
Persons
K. Rupert Murdoch
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
[] (a)
(b) []
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e) []
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
United States
- --------------------------------------------------------------------------------
Number of 7 Sole Voting Power
Shares 23,282,645/1/
Beneficially --------------------------------------------------
Owned by
Each 8 Shared Voting Power
Reporting -0-
Person with --------------------------------------------------
9 Sole Dispositive Power
23,282,645/1/
--------------------------------------------------
10 Shared Dispositive Power
-0-
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
23,282,645/1/
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares []
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
13.1%/2/
- --------------------------------------------------------------------------------
14 Type of Reporting Person
IN
- --------------------------------------------------------------------------------
/1/ Consists of 2,000,000 shares of Common Stock issued pursuant to the Purchase
Agreement and 21,282,645 shares of Common Stock into which 155,951 shares
of Series A Preferred Stock issued pursuant to the Purchase Agreement are
convertible.
/2/ Calculated based on (i) 154,882,926 shares of Common Stock outstanding on
January 26, 2000, (ii) 2,000,000 shares of Common Stock issued pursuant to the
Purchase Agreement; and (iii) 21,282,645 shares of Common Stock deemed to be
outstanding into which 155,951 shares of Series A Preferred Stock issued
pursuant to the Purchase Agreement are convertible
-4-
<PAGE>
- --------------------------------------------------------------------------------
1 Name of Reporting Persons/I.R.S. Identification Nos. of Above Persons
Fox Entertainment Group, Inc.
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) []
(b) []
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e) []
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware, U.S.A.
- --------------------------------------------------------------------------------
Number of 7 Sole Voting Power
Shares 13,899,477/1/
Beneficially --------------------------------------------------
Owned by
Each 8 Shared Voting Power
Reporting -0-
Person with --------------------------------------------------
9 Sole Dispositive Power
13,899,477/1/
--------------------------------------------------
10 Shared Dispositive Power
-0-
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
13,899,477/1/
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares []
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
7.8%/2/
- --------------------------------------------------------------------------------
14 Type of Reporting Person
CO
- --------------------------------------------------------------------------------
/1/ Consists of 13,899,477 shares of Common Stock into which 101,850 shares of
Series A Preferred Stock issued pursuant to the Purchase Agreement are
convertible.
/2/ Calculated based on (i) 154,882,926 shares of Common Stock outstanding on
January 26, 2000, (ii) 2,000,000 shares of Common Stock issued pursuant to the
Purchase Agreement; and (iii) 21,282,645 shares of Common Stock deemed to be
outstanding into which 155,951 shares of Series A Preferred Stock issued
pursuant to the Purchase Agreement are convertible.
-5-
<PAGE>
- --------------------------------------------------------------------------------
1 Name of Reporting Persons/S.S. or I.R.S. Identification Nos. of Above
Persons
Fox Broadcasting Company
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) []
(b) []
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e) []
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware, U.S.A.
- --------------------------------------------------------------------------------
Number of 7 Sole Voting Power
Shares 9,844,269/1/
Beneficially --------------------------------------------------
Owned by
Each 8 Shared Voting Power
Reporting -0-
Person with -------------------------------------------------
9 Sole Dispositive Power
9,844,269/1/
-------------------------------------------------
10 Shared Dispositive Power
-0-
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
9,844,269/1/
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
[]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
5.5%2
- --------------------------------------------------------------------------------
14 Type of Reporting Person
CO
- --------------------------------------------------------------------------------
/1/ Consists of 9,844,26 shares of Common Stock into which 72,135 shares of
Series A Preferred Stock issued pursuant to the Purchase Agreement are
convertible.
/2/ Calculated based on (i) 154,882,926 shares of Common Stock outstanding on
January 26, 2000, (ii) 2,000,000 shares of Common Stock issued pursuant to the
Purchase Agreement; and (iii) 21,282,645 shares of Common Stock deemed to be
outstanding into which 155,951 shares of Series A Preferred Stock issued
pursuant to the Purchase Agreement are convertible.
-6-
<PAGE>
- --------------------------------------------------------------------------------
1 Name of Reporting Persons/S.S. or I.R.S. Identification Nos. of Above
Persons
AHN/FIT Cable, LLC
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) []
(b) []
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e) []
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware, U.S.A.
- --------------------------------------------------------------------------------
Number of 7 Sole Voting Power
Shares 3,892,945/1/
Beneficially -------------------------------------------------
Owned by
Each 8 Shared Voting Power
Reporting -0-
Person with -------------------------------------------------
9 Sole Dispositive Power
3,892,945/1/
-------------------------------------------------
10 Shared Dispositive Power
-0-
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
3,892,945/1/
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
[]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
2.2%/2/
- --------------------------------------------------------------------------------
14 Type of Reporting Person
OO
- --------------------------------------------------------------------------------
/1/ Consists of 3,892,94 shares of Common Stock into which 28,526 shares of
Series A Preferred Stock issued pursuant to the Purchase Agreement are
convertible.
/2/ Calculated based on (i) 154,882,926 shares of Common Stock outstanding on
January 26, 2000, (ii) 2,000,000 shares of Common Stock issued pursuant to the
Purchase Agreement; and (iii) 21,282,645 shares of Common Stock deemed to be
outstanding into which 155,951 shares of Series A Preferred Stock issued
pursuant to the Purchase Agreement are convertible.
-7-
<PAGE>
- --------------------------------------------------------------------------------
1 Name of Reporting Persons/S.S. or I.R.S. Identification Nos. of Above
Persons
AHN/FIT Internet, LLC
- --------------------------------------------------------------------------------
2 Check the Appropriate Box if a Member of a Group
(a) []
(b) []
- --------------------------------------------------------------------------------
3 SEC Use Only
- --------------------------------------------------------------------------------
4 Source of Funds
OO
- --------------------------------------------------------------------------------
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Item
2(d) or 2(e) []
- --------------------------------------------------------------------------------
6 Citizenship or Place of Organization
Delaware, U.S.A.
- --------------------------------------------------------------------------------
Number of 7 Sole Voting Power
Shares 162,263/1/
Beneficially -------------------------------------------------
Owned by
Each 8 Shared Voting Power
Reporting -0-
Person with -------------------------------------------------
9 Sole Dispositive Power
162,263/1/
-------------------------------------------------
10 Shared Dispositive Power
-0-
- --------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by Each Reporting Person
162,2631
- --------------------------------------------------------------------------------
12 Check Box if the Aggregate Amount in Row (11) Excludes Certain Shares
[]
- --------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)
0.1%/2/
- --------------------------------------------------------------------------------
14 Type of Reporting Person
OO
- --------------------------------------------------------------------------------
/1/ Consists of 162,263 shares of Common Stock into which 1,189 shares of Series
A Preferred Stock issued pursuant to the Purchase Agreement are convertible.
/2/ Calculated based on (i) 154,882,926 shares of Common Stock outstanding on
January 26, 2000, (ii) 2,000,000 shares of Common Stock issued pursuant to the
Purchase Agreement; and (iii) 21,282,645 shares of Common Stock deemed to be
outstanding into which 155,951 shares of Series A Preferred Stock issued
pursuant to the Purchase Agreement are convertible.
-8-
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Pursuant to Section 13(d) of the
Securities Exchange Act of 1934
in respect of
HEALTHEON/WEBMD CORPORATION
Introductory Statement
----------------------
On January 26, 2000, The News Corporation Limited ("News Corporation"),
News America Incorporated ("NAI"), Fox Entertainment Group, Inc. ("FEG"), Fox
Broadcasting Company ("FBC"), AHN/FIT Cable, LLC ("AHN/FIT Cable"), AHN/FIT
Internet, LLC ("AHN/FIT Internet") and Eastrise Profits Limited ("Eastrise")
consummated a transaction with Healtheon/WebMD Corporation ("Healtheon/WebMD")
and two of its wholly-owned subsidiaries, Healtheon/WebMD Cable Corporation and
Healtheon/WebMD Internet Corporation, in which NAI purchased 2,000,000 shares of
Common Stock, par value $.0001 per share ("Common Stock"), of Healtheon/WebMD,
and certain of them purchased an aggregate of 155,951 shares of Series A
Payment-in-Kind Preferred Stock, par value $.0001 per share ("Series A Preferred
Stock"). The Series A Preferred Stock is entitled to quarterly dividends,
payable in additional shares of Series A Preferred Stock, at an annual rate of
10.5% and will automatically convert into shares of Common Stock on January 26,
2003, or earlier upon the occurrence of certain events. The powers,
designations, preferences and rights of the Series A Preferred Stock are set
forth in the Certificate of Designations of Healtheon/WebMD (the "Series A
Certificate of Designations") filed with the Secretary of State of the State of
Delaware on January 25, 2000. After giving effect to the payment of in-kind
dividends on the 155,951 shares of Series A Preferred Stock issued pursuant to
the Purchase Agreement, the 155,951 shares of Series A Preferred Stock will
convert into an aggregate of 21,282,645 shares of
-9-
<PAGE>
Common Stock, subject to adjustment under certain circumstances. Each share of
Series A Preferred Stock is entitled to vote with the Common Stock on an "as
converted" basis from the date of issuance (i.e., each share of Series A
Preferred Stock initially carries approximately 136.5 votes). By virtue of the
fact that each share of Series A Preferred Stock is entitled to vote with the
Common Stock on an "as converted" basis, the Reporting Persons (as hereinafter
defined) are deemed to be the beneficial owners of the shares of Common Stock
into which the shares of Series A Preferred Stock held by them are convertible
and such shares of Common Stock are deemed to be outstanding for purposes
hereof. The subject transaction took place pursuant to the Purchase Agreement
dated January 26, 2000 (the "Purchase Agreement"), by and among Healtheon/WebMD
and its wholly owned subsidiaries, Healtheon/WebMD Cable Corporation and
Healtheon/WebMD Internet Corporation, News Corporation, NAI, FEG, FBC, AHN/FIT
Cable, AHN/FIT Internet and Eastrise. Immediately following the consummation of
the transactions under the Purchase Agreement, Eastrise transferred to NAI all
of the shares of Series A Preferred Stock acquired by it.
The descriptions of, and reference to, certain agreements and documents
are qualified in their entirety by reference to the complete texts of such
agreements and documents filed as Exhibits hereto and incorporated herein by
reference.
Item 1. Security and Issuer.
-------------------
The title of the class of equity securities to which this statement
relates is the Common Stock of Healtheon/WebMD. The address of the principal
executive offices of Healtheon/WebMD is 400 The Lenox Building, 3399 Peachtree
Road, Atlanta, Georgia 30326.
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<PAGE>
Item 2. Identity and Background.
-----------------------
This statement is being filed by (i) News Corporation, a South Australia,
Australia corporation, with its principal executive office located at 2 Holt
Street, Sydney, New South Wales 2010, Australia, (ii) K. Rupert Murdoch, a
United States citizen, with his business address at 1211 Avenue of the Americas,
New York, New York, 10036, (iii) NAI, a Delaware corporation, with its principal
executive office located at 1211 Avenue of the Americas, New York, New York,
10036, (iv) FEG, a Delaware corporation, with its principal executive office
located at 1211 Avenue of the Americas, New York, New York 10036, (v) FBC, a
Delaware corporation, with an address at 10201 West Pico Boulevard, Los Angeles,
California 90035, (vi) AHN/FIT Cable, a limited liability company organized
under the laws of the state of Delaware, with an address at 1440 S. Sepulveda
Blvd., Los Angeles, California 90025, and (vii) AHN/FIT Internet, a limited
liability company organized under the laws of the state of Delaware, with an
address at 1440 S. Sepulveda Blvd., Los Angeles, California 90025. News
Corporation, K. Rupert Murdoch, NAI, FEG, FBC, AHN/FIT Cable, and AHN/FIT
Internet are referred to herein collectively as the "Reporting Persons." With
respect to each Reporting Person who is a natural person and each director and
executive officer of each Reporting Person, such person's name, residence or
business address, principal occupation or employment and the name, principal
business, and address of any corporation or other organization in which such
employment is conducted are set forth in Schedule 1 attached hereto, which is
incorporated herein by reference. To the knowledge of the Reporting Persons,
each of the persons named on Schedule 1 (the "Schedule 1 Persons") is a United
States citizen unless otherwise indicated.
News Corporation is a diversified global media company with operations in
the United States, Canada, the United Kingdom, Australia, Latin America and the
Pacific basin
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<PAGE>
principally engaged in the production and distribution of motion pictures and
television programming; television, satellite and cable broadcasting; the
publication of newspapers, magazines and books; the production and distribution
of promotional and advertising products and services; the development of digital
broadcasting; the development of conditional access and subscriber management
systems; and the creation and distribution of various popular online services.
Approximately 30% of the voting stock of News Corporation is owned by (i)
Mr. Murdoch and members of his family, (ii) (A) Cruden Investments Pty. Limited
("Cruden"), which is a private Australian investment company owned by Mr.
Murdoch, members of his family and various corporations and trusts, the
beneficiaries of which include Mr. Murdoch, members of his family and charities,
and (B) a subsidiary of Cruden; and (iii) a corporation which is controlled by
trustees of settlements and trusts set up for the benefit of the Murdoch family,
certain charities and other persons. By virtue of the shares of News Corporation
owned by such persons and entities, and Mr. Murdoch's positions as Chairman and
Chief Executive of News Corporation, Mr. Murdoch may be deemed to control the
operations of News Corporation.
NAI is a company 100% owned by News Corporation through certain
intermediaries. NAI is the principal subsidiary of News Corporation in the
United States whose affiliates and subsidiaries conduct a substantial portion of
the United States activities of News Corporation.
FEG is a diversified entertainment company principally engaged in the
development, production and worldwide distribution of feature films and
television programming, television broadcasting and cable network programming.
NAI indirectly owns securities representing 82.8% of the equity and 97.8% of the
voting power of FEG.
FBC, a wholly-owned subsidiary of FEG, operates the FOX television
network.
-12-
<PAGE>
AHN/FIT Cable is a holding company whose principal assets consist of
28,526 shares of Series A Preferred Stock and a 50% member interest in The
Health Network LLC, a Delaware limited liability company, which owns and
operates The Health Network television service. The other 50% member interest in
The Health Network LLC is held by the Healtheon/WebMD Cable Corporation, a
wholly-owned subsidiary of Healtheon/WebMD. FEG is the holder of a 50%
membership interest in AHN/FIT Cable and is its managing member. The other 50%
membership interest in AHN/FIT Cable is held by AHN Holdings, LLC, a Delaware
limited liability company ("AHN Holdings") which the Reporting Persons do not
control.
AHN/FIT Internet is a holding company whose principal assets consist of
1,189 shares of Series A Preferred Stock and a 50% member interest in The H/W
Health & Fitness LLC, a Delaware limited liability company, which owns and
operates an Internet business at the URL site www.thehealthnetwork.com. The
other 50% member interest in The H/W Health & Fitness LLC is held by the
Healtheon/WebMD Internet Corporation, a wholly-owned subsidiary of
Healtheon/WebMD. FEG is the holder of a 50% membership interest in AHN/FIT
Internet and is its managing member. The other 50% membership interest in
AHN/FIT Internet is held by AHN Holdings.
During the last five years, none of the Reporting Persons or, to the best
of the knowledge of the Reporting Persons, none of the Schedule 1 Persons has
(i) been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial
or administrative body of competent jurisdiction as a result of which it was or
is subject to a judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or state securities
laws or finding any violation with respect to such laws.
-13-
<PAGE>
Item 3. Source or Amount of Funds or Other Consideration.
------------------------------------------------
Healtheon/WebMD, its wholly-owned subsidiaries Healtheon/WebMD Cable
Corporation and Healtheon/WebMD Internet Corporation, News Corporation, NAI,
FEG, FBC, Eastrise, AHN/FIT Cable and AHN/FIT Internet entered into the Purchase
Agreement pursuant to which NAI acquired 2,000,000 shares of Common Stock and
FBC, AHN/FIT Cable, AHN/FIT Internet and Eastrise acquired an aggregate of
155,951 shares of Series A Preferred Stock (the "Preferred Shares," and together
with the shares of Common Stock, the "Shares"). The consideration for the
purchase of the Shares consisted of the payment of $100,000,000 cash, which was
paid out of the working capital of NAI, the transfer by AHN/FIT Cable of a 50%
member interest in The Health Network LLC, the transfer by AHN/FIT Internet of a
50% member interest in H/W Health & Fitness LLC, and the execution and delivery
of various agreements pursuant to which certain of the Reporting Persons agreed
to procure or provide media services such as advertising and promotion,
management services, and intellectual property licenses to certain content owned
by News Corporation, its subsidiaries and affiliates. Immediately following the
consummation of the transaction, the shares of Series A Preferred Stock acquired
by Eastrise pursuant to the Purchase Agreement were transferred to NAI.
Item 4. Purpose of Transaction.
----------------------
The Reporting Persons acquired beneficial ownership of the securities for
the purpose of investment. Pursuant to the Series A Certificate of Designations,
the Reporting Persons may not transfer their interest in the Series A Preferred
Stock, or in the Common Stock which they acquire upon conversion of the Series A
Preferred Stock, except to controlled affiliates, until the third anniversary of
the transaction date, or earlier under certain circumstances.
-14-
<PAGE>
Subject to the Purchase Agreement and the other agreements referenced in
Item 6 below, the Reporting Persons intend to continuously review their
investment in Healtheon/WebMD, and may in the future determine to (i) acquire
additional securities of Healtheon/WebMD through open market purchases, private
agreements or otherwise, (ii) dispose of all or a portion of the securities of
Healtheon/WebMD owned by them or (iii) take any other available course of
action, which could involve one or more of the types of transactions or have one
or more of the types of transactions or have one or more of the results
described in the last paragraph of this Item 4 or (iv) otherwise change their
investment intent. Notwithstanding anything contained herein, the Reporting
Persons specifically reserve the right to change their intentions with respect
to any or all of such matters. In reaching any decision as to their course of
action (as well as to the specific elements thereof), the Reporting Persons
currently expect that they would take into consideration a variety of factors,
including, but not limited to, Healtheon/WebMD's financial condition, business,
operations and prospects, other developments concerning Healtheon/WebMD and the
Internet business generally, other business opportunities available to the
Reporting Persons, other developments with respect to the business of the
Reporting Persons, general economic conditions and money and stock market
conditions, including the market price of the securities of Healtheon/WebMD. See
Item 6.
Other than as described herein, none of the Reporting Persons have any
present plans or proposals which relate to or would result in: (a) the
acquisition by any person of additional securities of Healtheon/WebMD or the
disposition of securities of Healtheon/WebMD; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving
Healtheon/WebMD or any of its subsidiaries; (c) a sale or transfer of a material
amount of assets of Healtheon/WebMD or any of its subsidiaries; (d) any change
in the Board of Directors or
-15-
<PAGE>
management of Healtheon/WebMD, including any plans or proposals to change the
number or terms of directors or to fill any existing vacancies on the Board of
Directors of Healtheon/WebMD; (e) any material change in the present
capitalization or dividend policy of Healtheon/WebMD; (f) any other material
change in Healtheon/WebMD's business or corporate structure; (g) changes in
Healtheon/WebMD's charter, by-laws or instruments corresponding thereto or other
actions which may impede the acquisition of control of Healtheon/WebMD by any
person; (h) a class of securities of Healtheon/WebMD being delisted from a
national securities exchange or ceasing to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association;
(i) a class of equity securities of Healtheon/WebMD becoming eligible for
termination of registration pursuant to Section 12(g)(4) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"); or (j) any action similar
to those enumerated above.
Item 5. Interest in Securities of the Issuer.
------------------------------------
After giving effect to the consummation of the transactions contemplated
by the Purchase Agreement and the transfer to NAI of the shares of Series A
Preferred Stock acquired thereunder by Eastrise, (a) News Corporation is the
beneficial owner of an aggregate of 23,282,645 shares of Common Stock,
representing a 13.1% interest in Healtheon/WebMD, consisting of (i) 2,000,000
shares of Common Stock and 7,383,168 shares of Common Stock issuable upon the
conversion of 54,101 shares of Series A Preferred Stock held by NAI (the "NAI
Shares"), (ii) 9,844,269 shares of Common Stock issuable upon the conversion of
72,135 shares of Series A Preferred Stock held by FBC (the "FBC Shares"), (iii)
3,892,945 shares of Common Stock issuable upon the conversion of 28,526 shares
of Series A Preferred Stock held by AHN/FIT Cable (the "AHN/FIT Cable Shares")
and (iv) 162,263 shares of Common Stock
-16-
<PAGE>
issuable upon the conversion of 1,189 shares of Series A Preferred Stock held by
AHN/FIT Internet (the "AHN/FIT Internet Shares"); (b) Mr. Murdoch may be deemed
the beneficial owner of an aggregate of 23,282,645 shares of Common Stock of
Healtheon/WebMD, representing a 13.1% interest in Healtheon/WebMD, consisting of
the NAI Shares, the FBC Shares, the AHN/FIT Cable Shares and the AHN/FIT
Internet Shares; (c) NAI is the beneficial owner of an aggregate of 23,282,645
shares of Common Stock, representing a 13.1% interest in Healtheon/WebMD,
consisting of the NAI Shares the FBC Shares, the AHN/FIT Cable Shares and the
AHN/FIT Internet Shares; (d) FEG is the beneficial owner of an aggregate of
13,899,477 shares of Common Stock, representing a 7.8% interest in
Healtheon/WebMD, consisting of the FBC Shares, the AHN/FIT Cable Shares and the
AHN/FIT Internet Shares; (e) FBC is the beneficial owner of an aggregate of
9,844,269 shares of Common Stock, representing a 5.5% interest in
Healtheon/WebMD, consisting of the FBC Shares; (f) AHN/FIT Cable is the
beneficial owner of an aggregate of 3,892,945 shares of Common Stock,
representing a 2.2% interest in Healtheon/WebMD, consisting of the AHN/FIT Cable
Shares; and (g) AHN/FIT Internet is the beneficial owner of an aggregate of
162,263 shares of Common Stock, representing a 0.1% interest in
Healtheon/WebMD, consisting of the AHN/FIT Internet Shares. For purposes of
computing the percentage of beneficial ownership of the Reporting Persons, the
total number of shares of Common Stock considered to be outstanding is
178,165,571./3/
- -----------------------
/3/ Calculated based on (i) 154,882,926 shares of Common Stock outstanding on
January 26, 2000, (ii) 2,000,000 shares of Common Stock issued pursuant to the
Purchase Agreement; and (iii) 21,282,645 shares of Common Stock deemed to be
outstanding into which 155,951 shares of Series A Preferred Stock issued
pursuant to the Purchase Agreement are convertible.
-17-
<PAGE>
Other than as stated above, no transactions were effected by the
Reporting Persons in the Common Stock during the 60 days preceding the date
hereof.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
---------------------------------------------------------------------
to Securities of the Issuer.
---------------------------
The Series A Certificate of Designations prohibits the holders of the
Series A Preferred Stock from transferring such shares, or any securities which
such shares may be converted into until the first to occur of (i) one year after
the consummation of a change of control of Healtheon/WebMD, as determined
pursuant to the Series A Certificate of Designations, (ii) the liquidation,
dissolution or winding up, whether voluntary or involuntary, of Healtheon/WebMD
or (iii) January 26, 2003.
According to the terms of the Amended and Restated Operating Agreement of
The Health Network LLC, within 45 days of the fifth anniversary of the Purchase
Agreement (i.e., January 26, 2005), AHN/FIT Cable has the right to put its 50%
member interest to the other 50% member, Healtheon/WebMD Cable Corporation, and
Healtheon/WebMD Cable Corporation has the right to call AHN/FIT Cable's 50%
member interest therein, in either case the consideration for the transfer of
such interest would be shares of common stock, up to 8,291,939 additional shares
of Common Stock of Healtheon/WebMD.
According to the terms of the Operating Agreement of WebMD International
LLC, IJV Holdings, Inc., a wholly-owned subsidiary of NAI, may, under certain
circumstances, have the right, after the fifth anniversary of the Purchase
Agreement (i.e., January 26, 2005) to put its 50% member interest to the other
50% member, HW International Holdings, Inc., a wholly-owned subsidiary of
Healtheon/WebMD, for 2,000,000 additional shares of Common Stock of
Healtheon/WebMD.
-18-
<PAGE>
Item 7. Materials to be Filed as Exhibits.
---------------------------------
Document Exhibit No.
-------- -----------
Purchase Agreement, dated as of January 26, 2000, by and among
Healtheon/WebMD Corporation, Healtheon/WebMD Cable Corporation,
Healtheon/WebMD Internet Corporation, The News Corporation Limited, Fox
Entertainment Group, Inc., Fox Broadcasting Company, Eastrise Profits
Limited, AHN/FIT Cable, LLC and AHN/FIT Internet, LLC A
- --------------------------------------------------------------------------------
Certificate of Designation of Series A Payment-in-Kind B
Preferred Stock of Healtheon/WebMD
- --------------------------------------------------------------------------------
Power of Attorney, dated as of February 3, 2000 by K. C
Rupert Murdoch
- --------------------------------------------------------------------------------
-19-
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Date: February 4, 2000
THE NEWS CORPORATION LIMITED
By: /s/ Arthur M. Siskind
---------------------------
Name: Arthur M. Siskind
Title: Director
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Date: February 4, 2000
/s/ K. Rupert Murdoch
------------------------------
K. Rupert Murdoch
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Date: February 4, 2000
NEWS AMERICA INCORPORATED
By: /s/ Lawrence A. Jacobs
-----------------------------
Name: Lawrence A. Jacobs
Title: Senior Vice President
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Date: February 4, 2000
FOX ENTERTAINMENT GROUP, INC.
By: /s/ Lawrence A. Jacobs
-----------------------------
Name: Lawrence A. Jacobs
Title: Secretary
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete, and correct.
Date: February 4, 2000
FOX BROADCASTING COMPANY
By: /s/ Paul Haggerty
-----------------------------
Name: Paul Haggerty
Title: Executive Vice President
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete, and correct.
Date: February 4, 2000
AHN/FIT CABLE, LLC
By: /s/ Daniel Fawcett
-----------------------------
Name: Daniel Fawcett
Title: Executive Vice President
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete, and
correct.
Date: February 4, 2000
AHN/FIT INTERNET, LLC
By: /s/ Daniel Fawcett
-----------------------------
Name: Daniel Fawcett
Title: Executive Vice President
<PAGE>
Schedule 1
----------
Directors, Executive Officers and Controlling Persons of the Reporting
Persons.
<TABLE>
<CAPTION>
Principal Business or
Organization in Which
Principal Occupation and Such Employment is
Name Business Address Conducted
- --------------------------- ------------------------------------------- ------------------------
<S> <C> <C>
K. Rupert Murdoch Chairman and Chief Executive of News News Corporation
Corporation; Director of News Publishing
Australia Limited ("NPAL"); Director of
News International plc; Director of News
Limited; Director of NAI; Director of TVG
Holdings, Inc. ("TVG Holdings"); Director
and Chairman of Satellite Television Asian
Region Limited ("STAR TV"); Director and
Chairman of British Sky Broadcasting Group
plc ("BSkyB"); Director, Chairman and
Chief Executive Officer of FEG.; Director
of Fox Family Worldwide, Inc. ("FFW");
Director of Philip Morris Companies Inc.
1211 Avenue of the Americas
New York, New York 10036
Geoffrey C. Bible Non Executive Director of News Philip Morris
Corporation; Chairman and Chief Executive
Officer of Philip Morris Companies Inc.
("Philip Morris"); Director of New York
Stock Exchange, Inc.
120 Park Avenue
New York, New York 10017
Chase Carey Executive Director and Co-Chief Operating News Corporation
Officer of News Corporation; Director,
President and Chief Operating Officer of
NAI; Director and Co-Chief Operating
Officer of FEG; Chairman and Chief
Executive Officer of Fox Television;
President and Chief Operating Officer of
TVG Holdings; Director of STAR TV;
Director of FFW; Director of TV Guide,
Inc.; Director of Gateway,
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Principal Business or
Organization in Which
Principal Occupation and Such Employment is
Name Business Address Conducted
- --------------------------- ------------------------------------------- ------------------------
<S> <C> <C>
Inc.; Director
of Colgate University.
10201 West Pico Boulevard
Los Angeles, CA 90035
Paul Carlucci Chairman and Chief Executive Officer of NAI
News America Marketing Group; Director of
NAI
1211 Avenue of the Americas
New York, New York 10036
Gareth C.C. Chang Executive Director of News Corporation; STAR TV
Executive Chairman of STAR TV; Director of
Apple Computers Inc.
8th Floor, One Harbourfront
18 Tak Fung Street
Hunghom, Kowloon, Hong Kong
Peter Chernin Executive Director, President and Chief News Corporation
Operating Officer of News Corporation;
Director, Chairman and Chief Executive
Officer of NAI ; Director, President and
Chief Operating Officer of FEG.; Chairman
and Chief Executive Officer of TVG
Holdings; Director of TV Guide, Inc.;
Director of Tickets.com, Inc.; Director of
E*TRADE Group, Inc. ("E*TRADE")
10201 West Pico Boulevard
Los Angeles, CA 90035
Kenneth E. Cowley/1/ Non Executive Director of News News Corporation
Corporation; Executive Director of Ansett
Australia Holdings Limited; Director of
Commonwealth Bank of Australia.
2 Holt Street
Sydney, New South Wales 2010
Australia
Christos Cotsakos Director of Fox Entertainment Group, Inc.; E*TRADE
President, Chief Executive Officer and a
Director of E*TRADE.; Director of several
technology companies including Digital
Island, Inc., Critical Path Software
Incorporated and National Processing
Corporation
</TABLE>
________________
/1/ Citizen of Australia
<PAGE>
<TABLE>
<CAPTION>
Principal Business or
Organization in Which
Principal Occupation and Such Employment is
Name Business Address Conducted
- --------------------------- ------------------------------------------- ------------------------
<S> <C> <C>
4500 Bohannon Drive
Menlo Park, California 94025
David F. DeVoe Executive Director, Senior Executive Vice News Corporation
President and Chief Financial Officer and
Finance Director of News Corporation;
Director and Senior Executive Vice
President of NAI; Director, Senior
Executive Vice President and Chief
Financial Officer of FEG; Director of STAR
TV; Director of BSkyB; Director and Senior
Executive Vice President of TVG Holdings.
1211 Avenue of the Americas
New York, New York 10036
Anthea Disney Executive Vice President of News News Corporation
Corporation; Chairman and Chief Executive
Officer of News America Publishing Group;
Director of NAI; Director of CIT Group
1211 Avenue of the Americas
New York, New York 10036
Roderick Eddington/1/ Executive Director of News Corporation; News Corporation
Executive Chairman and Director of Ansett
Holdings Limited; Director of Ansett
Australia Limited; Director and Deputy
Chairman of News Limited; Director of
John Swire & Sons Pty Ltd
2 Holt Street
Sydney, New South Wales 2010
Australia
Aatos Erkko/2/ Non Executive Director of News Sanoma Sanoma
Corporation; Chairman of Sanoma Corporation
("Sanoma"), a privately owned media company in
Finland.
P.O. Box 144
SF00101 Helsinki, Finland
David Hill Chairman of Fox Sports Network; Chairman Fox Television
and Chief Executive Officer of
</TABLE>
_________________
/1/ Citizen of Australia
/2/ Citizen of Finland
<PAGE>
<TABLE>
<CAPTION>
Principal Business or
Organization in Which
Principal Occupation and Such Employment is
Name Business Address Conducted
- --------------------------- ------------------------------------------- ------------------------
<S> <C> <C>
Fox Sports Television Group; Chairman of AHN/FIT
Cable, LLC; Chairman of AHN/FIT Internet,
LLC.
10201 West Pico Boulevard
Los Angeles, California 90035
Andrew S.B. Knight/3/ Non Executive Director of News Corporation News Corporation
c/o News International plc
1 Virginia Street
London E1 9XN England
William Mechanic Chairman and Chief Executive Officer of Fox Filmed
Fox Filmed Entertainment; Director of NAI Entertainment
10201 West Pico Boulevard
Los Angeles, California 90035
Lachlan K. Murdoch Executive Director and Senior Executive News Corporation
Vice President of News Corporation;
Chairman and Director of Queensland Press
Limited; Director, Chairman, and Chief
Executive of News Limited; Deputy Chairman
of STAR TV; Director of Beijing PDN Xinren
Information Technology Company Ltd;
Director of FOXTEL Management Pty Ltd.;
2 Holt Street
Sydney, New South Wales 2010
Australia
Thomas J. Perkins Non Executive Director of News Kleiner Perkins
Corporation; Senior Partner at Kleiner
Perkins Caufield & Byers ("Kleiner
Perkins"); Director of Compaq Computer
Corporation;
4 Embarcadero Center
Suite 3520
San Francisco, CA 94111
Bert C. Roberts, Jr. Non Executive Director of News MCI
Corporation; Chairman of MCI Worldcom,
Inc. ("MCI");
1801 Pennsylvania Avenue, N.W.
</TABLE>
_________________
/3/ Citizen of United Kingdom
<PAGE>
<TABLE>
<CAPTION>
Principal Business or
Organization in Which
Principal Occupation and Such Employment is
Name Business Address Conducted
- --------------------------- ------------------------------------------- ------------------------
<S> <C> <C>
Washington, D.C. 20006
Jeff Shell President of Fox Sports Networks; Fox Television
President of AHN/FIT Cable, LLC; President
of AHN/FIT Internet, LLC
1440 S. Sepulveda Boulevard
Los, Angeles, California 90025
Stanley S. Shuman Non Executive Director of News Allen & Company
Corporation; Executive Vice President and
Managing Director of Allen & Company
Incorporated ("Allen & Company"); Director
of NAI; Director of Bayou Steel
Corporation;
711 Fifth Avenue
New York, New York 10176
Arthur M. Siskind Executive Director, Senior Executive Vice News Corporation
President and Group General Counsel of
News Corporation; Director of BSkyB;
Director and Executive Vice President of
NAI; Director, Senior Executive Vice
President and General Counsel of FEG;
Director of STAR TV; Director and Senior
Executive Vice President of TVG Holdings;
1211 Avenue of the Americas
New York, New York 10036
Laura D'Andrea Tyson Director of FEG; Director of Ameritech University of
Corporation, Eastman Kodak Company, California, Berkeley
Healtheon/WebMD Corporation, Human Genome Haas School of
Sciences, Inc. and Morgan Stanley Business
DeanWitter.
c/o Haas School of Business
545 Student Services Build
</TABLE>
<PAGE>
EXHIBIT A
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is made and entered into as
of January 26, 2000, among Healtheon/WebMD Corporation, a Delaware corporation
("Healtheon/WebMD"), Healtheon/WebMD Cable Corporation, a Delaware corporation
(the "H/W Cable Sub") and a wholly-owned subsidiary of Healtheon/WebMD,
Healtheon/WebMD Internet Corporation, a Delaware corporation (the "H/W Internet
Sub") and a wholly-owned subsidiary of Healtheon/WebMD, Fox Entertainment Group,
Inc., a Delaware corporation ("Fox") which is controlled through certain
intermediaries by The News Corporation Limited, a South Australia, Australia
corporation ("News Corp"), Fox Broadcasting Company, a Delaware corporation
("FBC") and a subsidiary of Fox, Eastrise Profits Limited, an international
business company incorporated under the laws of the British Virgin Islands
("Eastrise") which is controlled through certain intermediaries by News Corp,
AHN/FIT Cable, LLC, a Delaware limited liability company ("AHN/FIT Cable"),
AHN/FIT Internet, LLC, a Delaware limited liability company ("AHN/FIT Internet,"
and collectively with News Corp, Fox, FBC, Eastrise and AHN/FIT Cable, the "News
Corp Parties").
R E C I T A L S:
A. Healtheon/WebMD is pioneering the use of the Internet to
simplify work flows, decrease costs and contribute to the quality of patient
care throughout the healthcare industry. Healtheon/WebMD has designed and
developed an Internet-based information and transaction platform that
facilitates and streamlines interactions among the myriad of participants in the
healthcare industry.
B. News Corp is a diversified international communications company
principally engaged in the production and distribution of motion pictures and
television programming; the publication of newspapers, magazines and books; the
production and distribution of promotional and advertising products and
services; the development of digital broadcasting; the development of
conditional access and subscriber management systems; the provision of computer
information services; and television, satellite and cable broadcasting.
C. Fox is principally engaged in the development, production and
worldwide distribution of feature films and television programs, television
broadcasting and cable network programming.
D. FBC operates a free-to-air broadcast television network in the
United States.
E. Eastrise is an affiliate of Satellite Television Asian Region Ltd., a
Hong Kong corporation ("Star TV") operates STAR TV network, which offers
television services reaching viewers across Asia, India and the Middle East.
F. AHN/FIT Cable is 50% owned and managed through certain
intermediaries by Fox and is principally engaged in the development, production
and distribution of The Health Network cable TV channel.
G. AHN/FIT Internet is 50% owned and managed through certain
intermediaries by Fox and has developed an Internet site devoted exclusively to
health and fitness programming.
H. On December 6, 1999, Healtheon/WebMD, News Corp and Fox entered
into a Master Strategic Alliance Agreement (the "Master Strategic Alliance
Agreement") pursuant to which they
<PAGE>
agreed to enter into certain strategic alliances and deliver certain
Transaction Documents (as defined therein), including this Agreement.
I. Fox desires to purchase 2,000,000 shares of common stock
(the "Common Stock"), par value $0.0001, of Healtheon/WebMD.
J. Prior to the date hereof, AHN/FIT Cable formed The Health
Network LLC, a Delaware limited liability company ("HNLLC"), by filing a
Certificate of Formation with the Secretary of State of Delaware and entered
into a limited liability company agreement. HNLLC was capitalized pursuant to
the terms and conditions of the limited liability company agreement by AHN/FIT
Cable (the "Original Cable LLC Agreement") with all of the assets (other than
cash) subject to all of the liabilities (other than loans from its members) of
AHN/FIT Cable in exchange for 100% of the member interests in HNLLC. H/W Cable
Sub desires to purchase and AHN/FIT Cable desires to sell a 50% member interest
in HNLLC (the "Cable Member Interest").
K. Prior to the date hereof, AHN/FIT Internet formed H/W Health &
Fitness LLC, a Delaware limited liability company ("H&FLLC"), by filing a
Certificate of Formation with the Secretary of State of Delaware and entered
into a limited liability company agreement. H&FLLC was capitalized pursuant to
the terms and conditions of the limited liability company agreement by AHN/FIT
Internet (the "Original Internet LLC Agreement") with all of the assets (other
than cash and the Galaxy Asset, as defined below) subject to all of the
liabilities (other than loans from its members) of AHN/FIT Internet in exchange
for 100% of the member interests in H&FLLC. H/W Internet Sub desires to purchase
and AHN/FIT Internet desires to sell a 50% member interest in H&FLLC (the
"Internet Member Interest").
L. Healtheon/WebMD desires to purchase from FBC and Eastrise $400
million of branding services across the various media owned by News Corp and its
affiliates throughout the world.
NOW, THEREFORE, it is agreed as follows:
1. PURCHASE OF MEMBER INTERESTS AND MEDIA SERVICES; SALE AND
ISSUANCE OF COMMON STOCK.
1.1 Sale of Healtheon/WebMD Shares. Subject to the terms and
------------------------------
conditions of this Agreement, Healtheon/WebMD hereby issues and sells to Fox,
and Fox hereby purchases from Healtheon/WebMD, (A) 2,000,000 shares of Common
Stock (the "Common Shares") and (B) 155,951 shares of Series A Preferred Stock
(the "Series A Stock"), par value $0.0001, of Healtheon/WebMD (the "Preferred
Shares" and together with the Common Shares, the "Purchased Shares") for an
aggregate consideration as follows: (i) $100 million, payable in immediately
available funds on the date hereof, (ii) the transfer, assignment, sale and
conveyance of the Cable Member Interest and the Internet Member Interest as set
forth in Sections 1.2 and 1.3 hereof, respectively, (iii) the media services to
be provided or procured pursuant to the Media Services Agreement (as hereinafter
defined) and (iv) the content to be provided pursuant to the News Corp Content
License Agreement (as defined in the Master Strategic Alliance Agreement).
1.2 Purchase of Member Interest in HNLLC. Subject to the terms and
------------------------------------
conditions of this Agreement, AHN/FIT Cable hereby transfers, assigns, sells and
conveys the Cable Member Interest to H/W Cable Sub, and H/W Cable Sub hereby
purchases the Cable Member Interest from AHN/FIT
2
<PAGE>
Cable. H/W Cable Sub does hereby accept the Cable Member Interest and elect to
be admitted to HNLLC as a member pursuant to the terms and conditions of the
Amended and Restated Limited Liability Company Agreement of HNLLC executed on
the date hereof (the "HNLLC Agreement"). AHN/FIT Cable, constituting the only
member of HNLLC prior to the effectiveness of this assignment, does hereby
consent to the assignment of the Cable Member Interest and to the admission of
H/W Cable Sub as a member of HNLLC pursuant to the HNLLC Agreement and waives
any rights which may arise pursuant to the Original Cable LLC Agreement as a
result of the assignment of the Cable Member Interest.
1.3 Purchase of Member Interest in H&FLLC. Subject to the terms and
-------------------------------------
conditions of this Agreement, AHN/FIT Internet hereby transfers, assigns, sells
and conveys the Internet Member Interest to H/W Internet Sub, and H/W Internet
Sub hereby purchases the Internet Member Interest from AHN/FIT Internet. H/W
Internet Sub does hereby accept the Internet Member Interest and elect to be
admitted to H&FLLC as a member pursuant to the terms and conditions of the
Amended and Restated Limited Liability Company Agreement of H/W Health & Fitness
LLC executed on the date hereof (the "H&FLLC Agreement"). AHN/FIT Internet,
constituting the only member of H&FLLC prior to the effectiveness of this
assignment, does hereby consent to the assignment of the Internet Member
Interest and to the admission of H/W Internet Sub as a member of H&FLLC pursuant
to the H&FLLC Agreement and waives any rights which may arise pursuant to the
Original Internet LLC Agreement as a result of the assignment of the Internet
Member Interest.
1.4 Purchase of Media Services. Subject to the terms and conditions
--------------------------
of this Agreement, FBC and Eastrise hereby agree, jointly and severally, to
provide media services to or procure media services for Healtheon/WebMD pursuant
to the terms and conditions of the Media Services Agreement executed on the date
hereof (the "Media Services Agreement") among Healtheon/WebMD, FBC and Eastrise,
and Healtheon/WebMD hereby purchases the media services to be provided pursuant
to the terms and conditions of the Media Services Agreement.
2. DELIVERIES.
2.1 Healtheon/WebMD Deliveries. On the date hereof and subject to
--------------------------
the fulfillment of the conditions set forth in Section 8 of the Master Strategic
Alliance Agreement, Healtheon/WebMD shall deliver (i) certificates, issued in
such name or names of the News Corp Parties as News Corp shall designate in
writing prior to the Closing, representing the Common Shares, (ii) certificates,
issued in such name or names of News Corp Parties, representing the Preferred
Shares as News Corp shall designate in writing prior to the Closing, (iii) to
AHN/FIT Cable the HNLLC Agreement executed by H/W Cable Sub, (iv) to AHN/FIT
Internet the H&FLLC Agreement executed by H/W Internet Sub, (v) to FBC and Star
TV the Media Services Agreement executed by Healtheon/WebMD, and (vi) to the
News Corp Parties the Registration Rights Agreement (as defined in the Master
Strategic Alliance Agreement) and the Healtheon/WebMD Schedule Supplement (as
defined in the Master Strategic Alliance Agreement) executed by Healtheon/WebMD
and all other closing deliveries to satisfy the conditions set forth in Section
7 of the Master Strategic Alliance Agreement.
2.2 News Corp Parties Deliveries. On the date hereof and subject to
----------------------------
the fulfillment of the conditions set forth in Section 7 of the Master Strategic
Alliance Agreement, (i) Fox shall deliver to Healtheon/WebMD $100 million in
immediately available funds, (ii) AHN/FIT Cable shall deliver to H/W Cable Sub
the HNLLC Agreement executed by AHN/FIT Cable, (iii) AHN/FIT Internet shall
deliver to H/W Internet Sub the H&FLLC Agreement executed by AHN/FIT Internet,
(iv) FBC and Eastrise shall deliver to Healtheon/WebMD the Media Services
Agreement executed by FBC and Eastrise and (v) the News Corp Parties shall
deliver to Healtheon/WebMD the Registration Rights
3
<PAGE>
Agreement and the News Corp Schedule Supplement (as defined in the Master
Strategic Alliance Agreement) executed by each of them and all other closing
deliveries to satisfy the conditions set forth in Section 8 of the Master
Strategic Alliance Agreement.
2.3 Legends. To the extent applicable, each certificate or other
-------
document evidencing any of the Purchased Shares shall be endorsed with a legend
substantially in the form set forth below:
"THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH
ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR OTHER
EVIDENCE, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH
REGISTRATION IS NOT REQUIRED."
3. REPRESENTATIONS AND WARRANTIES OF HEALTHEON/WEBMD.
Healtheon/WebMD hereby represents and warrants to the News Corp Parties
subject to the exceptions disclosed in writing in the disclosure letter and
referencing a specific representation delivered by Healtheon/WebMD to the News
Corp Parties as of the date of the Master Strategic Alliance Agreement and
certified by a duly authorized officer of Healtheon/WebMD (the "Healtheon/WebMD
Schedules"), as follows:
3.1 Organization, Standing, and Power. Healtheon/WebMD is a
---------------------------------
corporation duly organized, validly existing, and in good standing under the
laws of the State of Delaware, and has the power and authority to carry on its
business as it has been and is now being conducted and to enter into this
Agreement and to issue and sell the Purchased Shares. Healtheon/WebMD is duly
qualified or licensed to transact business as a foreign corporation and is in
good standing in all jurisdictions where the character of its assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
material adverse effect on the business or operations of Healtheon/WebMD.
3.2 Authorization of Agreement. The execution, delivery and
--------------------------
performance of this Agreement and the other Transaction Documents have been duly
authorized by all necessary corporate action of Healtheon/WebMD. This Agreement,
the other Transaction Documents and other instruments and documents executed and
delivered by Healtheon/WebMD pursuant thereto constitute, legal, valid and
binding obligations of Healtheon/WebMD enforceable against Healtheon/WebMD in
accordance with their respective terms, except to the extent such enforceability
is subject to (i) laws of general application relating to bankruptcy,
insolvency, moratorium and the relief of debtors and (ii) the availability of
specific performance, injunctive relief or other equitable remedies.
4
<PAGE>
3.3 Capital Stock.
--------------
3.3.1 As of November 11, 1999, the authorized capital stock of
Healtheon/WebMD consists of: (i) 600,000,000 shares of Common Stock, $0.0001 par
value, of which 146,204,261 shares (plus any shares issued upon exercise of
Healtheon/WebMD Options (as defined in Section 3.3.2) since November 11, 1999)
are issued and outstanding and (ii) 5,000,000 shares of Preferred Stock, $0.0001
par value per share, none of which shares are issued and outstanding. All of the
outstanding shares of Common Stock have been duly authorized and validly issued,
and are fully paid and nonassessable.
3.3.2 As of November 11, 1999, an aggregate of 63,595,222
shares of Common Stock (less any shares of Common Stock subject to
Healtheon/WebMD Options and Warrants that have been exercised since November 11,
1999) are subject to issuance pursuant to outstanding options to purchase Common
Stock under Healtheon/WebMD's stock option plans and outstanding warrants to
purchase Common Stock. (Stock options granted by Healtheon/WebMD pursuant to its
stock option plans and warrants are referred to in this Agreement as
"Healtheon/WebMD Options and Warrants".)
3.3.3 There were 191,543,804 shares of Common Stock issued and
outstanding as of November 11, 1999, computed on a fully diluted, as-if
converted to Common Stock basis using the treasury stock method.
3.3.4 Except as set forth above, as of November 11, 1999,
there are no subscriptions, options, warrants, equity securities, partnership
interests or similar ownership interests, calls, rights (including preemptive
rights), commitments or agreements of any character to which Healtheon/WebMD is
a party or by which it is bound obligating Healtheon/WebMD to issue, deliver or
sell, or cause to be issued, delivered or sold, or repurchase, redeem or
otherwise acquire, or cause the repurchase, redemption or acquisition of, any
shares of capital stock, partnership interests or similar ownership interests of
Healtheon/WebMD or obligating Healtheon/WebMD to grant, extend, accelerate the
vesting of or enter into any such subscription, option, warrant, equity
security, call, right, commitment or agreement.
3.4 Healtheon/WebMD SEC Filings; Financial Statements.
-------------------------------------------------
3.4.1 Healtheon/WebMD has filed all forms, reports and
documents required to be filed by Healtheon/WebMD with the Securities and
Exchange Commission (the "Commission") since January 1, 1999. All such required
forms, reports and documents filed with the Commission as of the date of this
Agreement are referred to herein as the "Healtheon/WebMD SEC Reports"). As of
their respective dates, (or, if amended, as of the respective dates of such
amendments), Healtheon/WebMD SEC Reports (i) were prepared in accordance and
complied as to form in all material respects with the requirements of the
Securities Act of 1933 as amended (the "1933 Act") or the Securities Exchange
Act of 1934 as amended (the "1934 Act"), as the case may be, and the rules and
regulations of the Commission thereunder, applicable to such Healtheon/WebMD SEC
Reports and (ii) did not at the time they were filed contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
3.4.2 Each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in the
Healtheon/WebMD SEC Reports (the "Healtheon/WebMD Financials"), (i) complied as
to form in all material respects with the published rules and regulations of the
Commission with respect thereto, (ii) was prepared in accordance with GAAP
applied on a
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consistent basis throughout the periods involved (except as may be
indicated in the notes thereto or, in the case of unaudited interim financial
statements, as may be permitted by the Commission on Form 10-Q under the 1934
Act) and (iii) fairly presented the consolidated financial position of
Healtheon/WebMD as at the respective dates thereof and the consolidated results
of Healtheon/WebMD operations and cash flows for the periods indicated, except
that the unaudited interim financial statements may not contain footnotes and
were or are subject to normal and recurring year-end adjustments.
3.5 Absence of Undisclosed Liabilities. Except as disclosed in the
----------------------------------
Healtheon/WebMD SEC Reports, as of the date of the Master Strategic Alliance
Agreement Healtheon/WebMD does not have any undisclosed liabilities, except for
unpaid liabilities and obligations incurred since June 30, 1999, in the ordinary
course of business or which are not, in the aggregate, material to
Healtheon/WebMD.
3.6 Absence of Certain Healtheon/WebMD Changes or Events. Since June
----------------------------------------------------
30, 1999, there have been no events, changes or occurrences (other than events
or condition affecting the economy generally) which have had, or are reasonably
likely to have, individually or in the aggregate, a material adverse effect on
the business, results of operations or financial condition of Healtheon/WebMD or
any of its subsidiaries, taken as a whole.
3.7 Validity of Stock. The Purchased Shares are duly authorized,
-----------------
validly issued, fully paid and nonassessable, are free of any Liens, and are not
subject to any preemptive rights, rights of first refusal or redemption rights,
other than as have been waived. For purposes of this Agreement, "Lien" means any
mortgage, pledge, lien, security interest or other encumbrance of any kind or
nature.
3.8 Registration Rights. The Purchased Shares issued pursuant
--------------------
hereto shall have the registration rights set forth in the Registration Rights
Agreement, as such may be amended from time to time.
3.9 Experience; Investment. H/W Cable Sub is acquiring the Cable
----------------------
Member Interest and H/W Internet Sub is acquiring the Internet Member Interest
solely for its own account, not as a nominee or agent, and not with a view to,
or for sale in connection with, any distribution thereof. Each of H/W Cable Sub
and H/W Internet Sub is an "accredited investor" within the meaning of Rule
501(a)(3) of Regulation D promulgated by the Commission under the 1933 Act. In
addition, Healtheon/WebMD represents that no form of general solicitation or
general advertising was used by News Corp or its representatives in connection
with the offer or sale of the Cable Member Interest and the Internet Member
Interest.
3.10 Registration under the 1933 Act. Healtheon/WebMD understands
-------------------------------
that (a) the sale of the Cable Member Interest and the Internet Member Interest
has not been registered under the 1933 Act or applicable state securities laws,
in reliance upon exemptions from the registration provisions of the 1933 Act and
applicable state securities laws, (b) the Cable Member Interest and the Internet
Member Interest purchased by H/W Cable Sub and H/W Internet Sub must be held by
them indefinitely unless the sale or transfer thereof is subsequently registered
under the 1933 Act and applicable state securities laws or an exemption from
such registration is available, and the certificates or documents representing
Cable Member Interest and the Internet Member Interest will be legended to
reflect such restrictions, (c) neither HNLLC nor H&FLLC is under any obligation
to register the Cable Member Interest or the Internet Member Interest or to
assist H/W Cable Sub and H/W Internet Sub in complying with any exemption from
registration, and (d) the managing members of HNLLC and H&FLLC will rely in part
upon the representations and warranties made by Healtheon/WebMD in this
Agreement in order to
6
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establish such exemption from the registration provisions of the 1933 Act and
applicable state securities laws.
3.11 No Consents. The execution and delivery of this Agreement and
-----------
the other Transaction Documents by Healtheon/WebMD, do not, and the performance
of Healtheon/WebMD's obligations under this Agreement and the other Transaction
Documents, and the consummation of the transactions contemplated hereby and
thereby, will not require any consent, approval, authorization or permit of, or
filing with or notification to any governmental entity, except (i) pursuant to
the HSR Act, (ii) for the filing of the Certificate of Designations of the
Series A Stock with the Delaware Secretary of State, and (iii) where the failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, (a) would not, individually or in the aggregate,
reasonably be expected to prevent Healtheon/WebMD from performing its
obligations under this Agreement and the other Transaction Documents in any
material respect and (b) would not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the business, results of
operations or financial condition of Healtheon/WebMD and its subsidiaries taken
as a whole.
3.12 Compliance with Other Instruments, Etc. As of the date of the
--------------------------------------
Master Strategic Alliance Agreement, Healtheon/WebMD is not in violation of any
term of (a) its charter, by-laws or other organizational documents, (b) any
material agreement or instrument, (c) any applicable law, ordinance, rule or
regulation of any governmental entity or (d) any applicable order, judgement or
decree of any court, arbitrator or governmental entity, the consequences of
which violation, whether individually or in the aggregate, would be reasonably
expected to have a material adverse effect on (i) the business, results of
operations or financial condition of Healtheon/WebMD or (ii) the ability of
Healtheon/WebMD to perform its obligations under this Agreement and the other
Transaction Documents. The execution, delivery and performance of this Agreement
and the other Transaction Documents by Healtheon/WebMD will not result in any
violation of or conflict with, constitute a default under, or require any
consent under any term of the charter, bylaws or other organizational document
of Healtheon/WebMD or any material agreement or instrument or any law,
ordinance, rule, regulation, order, judgement or decree, or result in the
creation of (or impose any obligation on Healtheon/WebMD to create) any Lien
upon any of the properties or assets of Healtheon/WebMD, except where such
violation, conflict or default, or the failure to obtain such consent,
individually or in the aggregate, would not be reasonably expected to have a
material adverse effect on (i) the business, results of operations or financial
condition of Healtheon/WebMD and its subsidiaries taken as a whole or (ii) the
ability of Healtheon/WebMD to perform its obligations under this Agreement and
the other Transaction Documents.
3.13 No Other Agreements. Except as evidenced in this Agreement and
-------------------
the other Transaction Documents, there are no other agreements, arrangements,
understandings, contracts, obligations or liabilities between or among
Healtheon/WebMD or any of its subsidiaries or predecessor entities, on one hand,
and the News Corp Parties, H&FLLC, HNLLC or any of their subsidiaries or
predecessor entities, on the other hand.
7
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4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE NEWS CORP
PARTIES.
Each of the News Corp Parties, jointly and severally, represents,
warrants and covenants to Healtheon/WebMD, subject to the exceptions disclosed
in writing in the disclosure letter and referencing a specific representation
delivered by the News Corp Parties to Healtheon/WebMD as of the date of the
Master Strategic Alliance Agreement and certified by a duly authorized officer
of News Corp (the "News Corp Schedules"), as follows:
4.1 Access to Information. Each of the News Corp Parties
---------------------
acknowledges that it has reviewed the Registration Statement (Registration No.
333-86685) on Form S-4, which was declared effective by the Commission on
October 19, 1999 (the "Healtheon/WebMD Registration Statement"). Each of the
News Corp Parties and its advisor or advisors, or a person or persons acting on
its behalf, has had a reasonable opportunity to ask questions of and receive
answers from the officers of Healtheon/WebMD, concerning the Healtheon/WebMD
Registration Statement and the terms and conditions of the offer and sale of the
Purchased Shares, and to obtain additional information, to the extent possessed
or obtainable without unreasonable effort or expense by the officers of
Healtheon/WebMD. All such questions have been answered to the full satisfaction
of the News Corp Parties.
4.2 Experience; Investment. Each of AHN/FIT Cable, AHN/FIT Internet,
----------------------
FBC, Eastrise and Fox is acquiring its respective portion of the Purchased
Shares solely for its own account, not as a nominee or agent, and not with a
view to, or for sale in connection with, any distribution thereof. Each of
AHN/FIT Cable, AHN/FIT Internet, FBC, Eastrise and Fox represents that it is an
"accredited investor" within the meaning of Rule 501(a)(3) of Regulation D
promulgated by the Commission under the 1933 Act. In addition, each of AHN/FIT
Cable, AHN/FIT Internet, FBC, Eastrise and Fox represents that no form of
general solicitation or general advertising was used by Healtheon/WebMD or its
representatives in connection with the offer or sale of the Purchased Shares.
4.3 Registration under the 1933 Act. Each of the News Corp Parties
-------------------------------
understands that (a) the sale of the Purchased Shares has not been registered
under the 1933 Act or applicable state securities laws, in reliance upon
exemptions from the registration provisions of the 1933 Act and applicable state
securities laws, (b) the Purchased Shares purchased by AHN/FIT Cable, AHN/FIT
Internet, FBC, Eastrise and Fox must be held by it indefinitely unless the sale
or transfer thereof is subsequently registered under the 1933 Act and applicable
state securities laws or an exemption from such registration is available, and
the certificates or documents representing all Purchased Shares will be legended
to reflect such restrictions, (c) except as provided in the Registration Rights
Agreement, Healtheon/WebMD is under no obligation to register any Purchased
Shares on the behalf of AHN/FIT Cable, AHN/FIT Internet, FBC, Eastrise or Fox or
to assist any of them in complying with any exemption from registration, and (d)
the officers of Healtheon/WebMD will rely in part upon the representations and
warranties made by the News Corp Parties in this Agreement in order to establish
such exemption from the registration provisions of the 1933 Act and applicable
state securities laws.
4.4 Transfer. None of AHN/FIT Cable, AHN/FIT Internet, FBC,
--------
Eastrise or Fox will transfer any Purchased Shares without registration under
the 1933 Act and applicable state securities laws unless the transfer is exempt
from registration under the 1933 Act and such laws.
8
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4.5 Organization and Standing.
-------------------------
4.5.1 Each of the News Corp Parties is a corporation or
organization duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or organization and has all
necessary power and authority to perform its obligations under this Agreement
and the other Transaction Documents.
4.5.2 (a) Each of HNLLC and H&FLLC is a limited liability
company, duly organized, validly existing, and in good standing under the laws
of Delaware, with full limited liability company power and authority to conduct
its business as it is now being conducted, to own or use the properties and
assets that it purports to own or use, and to perform all its obligations
hereunder and under applicable contracts. Each of HNLLC and H&FLLC is duly
qualified to do business as a foreign person and is in good standing under the
laws of each state or other jurisdiction in which either the ownership or use of
the properties owned or used by it, or the nature of the activities conducted by
it, requires such qualification, except to the extent that the absence of any
such qualification would not have a material adverse effect on the business or
operations of HNLLC or H&FLLC, as applicable.
(b) The News Corp Parties have delivered to
Healtheon/WebMD copies of the organizational documents of
HNLLC, H&FLLC, AHN/FIT Cable and AHN/FIT Internet, as currently in effect.
(c) On January 10, 2000, AHN/FIT Cable formed
HNLLC by filing a Certificate of Formation with the Delaware Secretary of State.
On January 26, 2000, AHN/FIT Cable contributed to HNLLC all of the rights, title
and interest in and to all of the assets (other than cash) subject to all of the
liabilities (other than loans from its members) of AHN/FIT Cable (the
"Contribution") in accordance with the terms and conditions of the Original
Cable LLC Agreement. There is no other holder or owner of a member interest or
any other equity interest or rights to acquire an equity interest in HNLLC other
than AHN/FIT Cable.
(d) On January 10, 2000, AHN/FIT Internet formed
H&FLLC by filing a Certificate of Formation with the Delaware Secretary of
State. On January 26, 2000, AHN/FIT Internet contributed to H&FLLC all of the
rights, title and interest in and to all of the assets (other than cash and the
Galaxy Asset as defined in Section 4.12 hereof) subject to all of the
liabilities (other than loans from its members) of AHN/FIT Internet (the
"Internet Contribution") in accordance with the terms and conditions of the
Original Internet LLC Agreement. There is no other holder or owner of a member
interest or any other equity interest or rights to acquire an equity interest in
H&FLLC other than AHN/FIT Internet.
(e) There are no documents, agreements, certificates,
instruments or understandings (written or verbal) between any of the News Corp
Parties and HNLLC relating to the formation or capitalization of HNLLC other
than those which are identified in Section 4.5.2(e) of the News Corp Schedules,
complete and accurate copies of which have been provided to Healtheon/WebMD.
(f) There are no documents, agreements, certificates,
instruments or understandings (written or verbal) between any of the News Corp
Parties and H&FLLC relating to the formation or capitalization of H&FLLC other
than those which are identified in Section 4.5.2(f) of the News Corp Schedules,
complete and accurate copies of which have been provided to Healtheon/WebMD.
9
<PAGE>
4.6 Capitalization of HNLLC and H&FLLC.
----------------------------------
4.6.1 The equity ownership interests of HNLLC consist solely
of one class of member interests described in the Original Cable LLC Agreement,
a complete and accurate copy of which (with all amendments thereto) is attached
to Section 4.5.2(d) of the News Corp Schedules. All of the outstanding member
interests of HNLLC are held by AHN/FIT Cable, free and clear of all Liens. The
Cable Member Interest represents a 50% interest in all distributions from HNLLC
and in all other rights attendant to a member interest in a Delaware limited
liability company, subject to the HNLLC Agreement, and will be transferred to
Healtheon/WebMD free and clear of all Liens (other than the restrictions placed
on member interests generally in the HNLLC Agreement and restrictions imposed by
the 1933 Act).
4.6.2 All of HNLLC's outstanding member interests have been
duly authorized and validly issued and are fully paid and non-assessable. There
are no contracts relating to the issuance, sale or transfer of any member
interests of HNLLC (other than this Agreement). None of the outstanding member
interests of HNLLC was issued in violation of the 1933 Act or any other legal
requirement. Except as set forth in Section 4.6.2 of the News Corp Schedules,
HNLLC does not own, or have any contract to acquire, any equity ownership
interest or other securities of any person or any direct or indirect equity or
ownership interest in any other business.
4.6.3 The equity ownership interests of H&FLLC consist solely
of one class of member interests described in the Original Internet LLC
Agreement, a complete and accurate copy of which (with all amendments thereto)
is attached to Section 4.6.3 of the News Corp Schedules. All of the outstanding
member interests of H&FLLC are held by AHN/FIT Internet, free and clear of all
Liens. The Internet Member Interest represents a 50% interest in all
distributions from H&FLLC and in all other rights attendant to a member interest
in a Delaware limited liability company, subject to the Original Internet LLC
Agreement, and will be transferred to Healtheon/WebMD free and clear of all
Liens (other than the restrictions placed on member interests generally in the
H&FLLC Agreement and restrictions imposed by the 1933 Act).
4.6.4 All of H&FLLC's outstanding member interests have been
duly authorized and validly issued and are fully paid and non-assessable. There
are no contracts relating to the issuance, sale or transfer of any member
interests of H&FLLC (other than this Agreement). None of the outstanding member
interests of H&FLLC was issued in violation of the 1933 Act or any other legal
requirement. Except as set forth in Section 4.6.4 of the News Corp Schedules,
H&FLLC does not own, or have any contract to acquire, any equity ownership
interest or other securities of any person or any direct or indirect equity or
ownership interest in any other business.
4.7 Authorization of Agreement. The execution, delivery and
--------------------------
performance of this Agreement and the other Transaction Documents have been duly
authorized by all necessary corporate and limited liability company action of
each of the News Corp Parties. This Agreement, the other Transaction Documents
and other instruments and documents executed and delivered pursuant thereto by
each of the News Corp Parties to which it is a party constitute, legal, valid
and binding obligations of such News Corp Party enforceable against such News
Corp Party in accordance with their respective terms, except to the extent such
enforceability is subject to (i) laws of general application relating to
bankruptcy, insolvency, moratorium and the relief of debtors and (ii) the
availability of specific performance, injunctive relief or other equitable
remedies.
4.8 No Other Agreements. Except as evidenced in this Agreement and
-------------------
the other Transaction Documents, there are no other agreements, arrangements,
understandings, contracts,
10
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obligations or liabilities between or among Healtheon/WebMD or any of their
respective subsidiaries or predecessor entities, on one hand, and the News Corp
Parties, H&FLLC, HNLLC or any of their respective subsidiaries or predecessor
entities, on the other hand.
4.9 No Consents. The execution and delivery of this Agreement and
-----------
the other Transaction Documents by the News Corp Parties, do not, and the
performance of the News Corp Parties' obligations under this Agreement and the
other Transaction Documents, and the consummation of the transactions
contemplated hereby and thereby, will not require any consent, approval,
authorization or permit of, or filing with or notification to any governmental
entity, except pursuant to the HSR Act and where the failure to obtain such
consents, approvals, authorizations or permits, or to make such filings or
notifications, (a) would not, individually or in the aggregate, reasonably be
expected to prevent the News Corp Parties from performing their respective
obligations under this Agreement and the other Transaction Documents in any
material respect and (b) would not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the business, results of
operations or financial condition of H&FLLC or HNLLC.
4.10 Compliance with Other Instruments, Etc. As of the date of the
--------------------------------------
Master Strategic Alliance Agreement, none of the News Corp Parties, H&FLLC or
HNLLC is in violation of any term of (a) its charter, by-laws, limited liability
company agreement or other organizational documents, (b) any material agreement
or instrument, (c) any applicable law, ordinance, rule or regulation of any
governmental entity or (d) any applicable order, judgement or decree of any
court, arbitrator or governmental entity, the consequences of which violation,
whether individually or in the aggregate, would be reasonably expected to have a
material adverse effect on (i) the business, results of operations or financial
condition of AHN/FIT Cable, AHN/FIT Internet, H&FLLC or HNLLC or (ii) the
ability of the News Corp Parties, H&FLLC or HNLLC to perform their respective
obligations under this Agreement and the other Transaction Documents. The
execution, delivery and performance of this Agreement and the other Transaction
Documents by the News Corp Parties will not result in any violation of or
conflict with, constitute a default under, or require any consent under any term
of the charter, bylaws or other organizational document of the News Corp Parties
or any such agreement, instrument, law, ordinance, rule, regulation, order,
judgement or decree or result in the creation of (or impose any obligation on
the News Corp Parties to create) any Lien upon any of the properties or assets
of the News Corp Parties, H&FLLC or HNLLC pursuant to any such term, except
where such violation, conflict or default, or the failure to obtain such
consent, individually or in the aggregate, would not be reasonably expected to
have a material adverse effect on (i) the business, results of operations or
financial condition of AHN/FIT Cable, AHN/FIT Internet, H&FLLC or HNLLC or (ii)
the ability of the News Corp Parties to perform their respective obligations
under this Agreement and the other Transaction Documents.
4.11 Governmental Licenses. Section 4.11 of the News Corp Schedules
---------------------
is a complete list as of the date of the Master Strategic Alliance Agreement of
all licenses, permits and other authorizations, including, without limitation,
any temporary waiver or special temporary authorization, issued by the FCC, or
any other federal, state or local governmental authority to HNLLC or AHN/FIT
Cable, currently in effect and relating to or used or necessary in connection
with the business or operations of The Health Network cable TV channel and the
transmission of its programming as described in Section 4.13 below, together
with any additions thereto (including renewals or modifications of such
licenses, permits and authorization and applications therefore), including
expiration dates (the "Licenses"). The Licenses constitute all of the licenses,
permits and authorizations from the FCC or any other governmental authority that
are required for the business or operation of The Health Network cable TV
channel. Each License is valid and in full force and effect, unimpaired by any
condition, and on the Closing Date HNLLC will be the authorized legal holder
thereof. None of the Licenses is subject to a
11
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pending renewal application or scheduled for renewal prior to the expiration
date specified for each License. There is not pending, or to the News Corp
Parties' knowledge, threatened any action by or before the FCC to revoke,
cancel, rescind, modify or refuse to renew in the ordinary course any of the
Licenses. There is not now pending, issued or outstanding or, to the News Corp
Parties' knowledge, threatened by or before the FCC, any investigation, order to
show cause, cease desist order, notice of violation, notice of apparent
liability, or notice of forfeiture, petition or material complaint with respect
to HNLLC, AHN/FIT Cable, The Health Network cable TV channel or the Licenses. To
the News Corp Parties' knowledge, there is no reason which would prevent the
Licenses from being renewed in the ordinary course and no other television
station or communications facility is causing material interference with the
transmission or the public reception of the transmissions, except as set forth
in Section 4.11 of the News Corp Schedules. The Health Network cable TV channel
is in all material respects being operated and maintained in accordance with the
federal communications laws and the terms of the Licenses.
4.12 Title to Assets. Section 4.12(a) of the News Corp Schedules
---------------
contains an accurate description of all real and personal property owned by
AHN/FIT Cable and HNLLC, including The Health Network cable TV channel. Section
4.12(b) of the News Corp Schedules contains an accurate description of all real
and personal property owned by AHN/FIT Internet and H&FLLC. On the Closing Date
and except for the assets set forth in Section 4.12(c) of the News Corp
Schedules (the "Galaxy Asset"), each of HNLLC and H&FLLC will have good and
marketable title to, or leasehold interests in, all such assets, free and clear
of any Liens, except (i) for Liens for taxes not yet due, (ii) for Liens imposed
by law and incurred in the ordinary course of business for obligations not yet
due to carriers, warehousemen, laborers, materialmen and the like, (iii) for
Liens in respect of pledges or deposits under workers' compensation laws or
similar legislation, (iv) for Liens outstanding and aggregating less than
$500,000, (v) for Liens disclosed in the Financial Statements or the notes
thereto, or incurred thereafter in the ordinary course of its business, (vi) for
Liens incurred in the ordinary course of business for obligations to film and
sound laboratories, (vii) for Liens incurred in the ordinary course of business
for obligations to the Screen Actors' Guild of America, the Directors' Guild of
America and/or any other collective bargaining guilds or unions having
jurisdiction over any intellectual property owned or controlled by HNLLC, (viii)
for Liens incurred in the ordinary course of business for obligations to
completion guarantors in connection with the production of motion pictures,
television programs or other productions or (ix) for distribution and other
exploitation rights and licenses heretofore granted by HNLLC or AHN/FIT Cable to
third persons with respect to any intellectual property owned or controlled by
HNLLC. Except as set forth in Section 4.12(d) of the News Corp Schedules, on the
Closing Date (i) HNLLC will own all of the assets necessary for the lawful
operation of The Health Network cable TV channel as currently operated and (ii)
H&FLLC will own all of the assets necessary for the lawful operation of the
internet site dedicated to health and fitness programming as currently operated.
4.13 Transmission Facilities. Fox transmits all programming for The
-----------------------
Health Network cable TV channel from its facilities located in Los Angeles, CA,
by means of an earth station transmitting antenna (an "uplink"). The uplink
facility transmits the programming signal to a transponder on an orbiting
satellite, which in turn retransmits the signal to cable systems operators, DBS
services and other alternative delivery services. Programming is transmitted
using two separate "feeds" (one for the eastern, central and certain mountain
time zones and another for all other mountain time zones and the pacific time
zones) which are compressed and transmitted to one satellite transponder. Fox
leases the transponder for these two feeds from PanAmSat. These leased
transponders have "protected" status. "Protected" status means that should the
transponder fail, service will be transferred, subject to availability, to a
spare transponder and, if one is not available, then to a transponder with
"preemptable" status on the same satellite or on another satellite owned by the
same seller or lessor,
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<PAGE>
subject to certain limitations. "Preemptable" status means that the transponder
can be preempted in the event of a failure of a "protected" transponder. The
expected remaining useful life of the orbiting satellite transmission facilities
described above is eight years from the date of the Master Strategic Alliance
Agreement and Fox has all necessary rights to such facilities for the balance of
such useful life and has transferred to HNLLC such rights and any related
renewal rights with respect to the future transmission of programming for The
Health Network cable TV channel.
4.14 Material Contracts and Commitments.
----------------------------------
4.14.1 Section 4.14.1 of the News Corp Schedules sets forth a
list of all those currently effective contracts and agreements (written or oral)
to which AHN/FIT Cable, AHN/FIT Internet, H&FLLC, HNLLC or The Health Network
cable TV channel is a party and contracts to which any of the News Corp Parties
is a party which relate to AHN/FIT Cable, AHN/FIT Internet, H&FLLC, HNLLC or The
Health Network cable TV channel (collectively, the "Contracts"), true and,
except as noted on the Schedule, complete copies of which have been made
available to Healtheon/WebMD.
4.14.2 (a) each of the Contracts is a valid and binding
agreement of the News Corp Parties, H&FLLC or HNLLC, as applicable; and
(b) there has not occurred any material default
under any of the Contracts on the part of the News Corp Parties, H&FLLC or
HNLLC, as applicable, or, to the best knowledge of the News Corp Parties, on the
part of any other party thereto, which would have a material adverse effect on
the business or operations of AHN/FIT Cable, AHN/FIT Internet, HNLLC or H&FLLC.
4.14.3 Section 4.14 of the News Corp Schedules includes a true
and complete list as of the date of the Master Strategic Alliance Agreement of
the contracts between AHN/FIT Cable and the top 20 cable and satellite carriers
relating to carriage of The Health Network cable TV channel (determined by
reference to subscriber count as of the most recent practicable dates) (the
"Affiliation Agreements"). Section 4.14.3 of the News Corp Schedules also
includes (i) the term of the Affiliation Agreements, (ii) the per subscriber
amount, if any, of any launch fees paid or similar payments made by AHN/FIT
Cable (or its predecessors) to such cable or satellite carrier in connection
with the execution of the Affiliation Agreements, and (iii) the per subscriber
amount, if any, of any fees paid by AHN/FIT Cable (or its predecessors) to such
cable or satellite carrier during the term of the Affiliation Agreements,
including, without limitation, monthly or quarterly marketing payments. As of
the date of the Master Strategic Alliance Agreement, none of the News Corp
Parties or HNLLC has received any notice (written or oral) that any such cable
carrier (a) has canceled or terminated, or has a specific intention to cancel or
terminate, any Affiliation Agreement or (b) has a specific intention to effect a
planned reduction in the number of subscribers covered by such Affiliation
Agreement other than reductions which would not reasonably be expected to have a
material adverse effect on the business, results of operations, financial
condition or prospects of AHN/FIT Cable or HNLLC. There exists no breach of or
default under any of the "most favored nation" clauses contained in such
Affiliation Agreements, except for breaches or defaults which, individually or
in the aggregate, would not reasonably be expected to have a material adverse
effect on the business, results of operations or financial condition of AHN/FIT
Cable, AHN/FIT Internet, H&FLLC or HNLLC.
4.15 Service Mark. Section 4.15(a) of the News Corp Schedules sets
------------
forth in summary form the nature and extent of the intellectual property rights
of AHN/FIT Cable and HNLLC in connection with The Health Network cable TV
channel (the "HNLLC Intangibles"). Section 4.15(b) of the News Corp Schedules
sets forth in summary form the nature and extent of the intellectual property
rights of
13
<PAGE>
AHN/FIT Internet and H&FLLC in connection with Internet site or sites
(the "Internet Intangibles"). AHN/FIT Cable and HNLLC owns or has adequate
rights in the HNLLC Intangibles and with respect to the mark, "The Health
Network" in the United States. AHN/FIT Internet and H&FLLC holds the Internet
domain names listed on Section 4.15(b) of the News Corp Schedules and has
obtained all available legal rights to use such names (as domain names) in its
business throughout the world and to preclude use of such domain names by
others, which domain names are subject to no Liens. Section 4.15(a) of the News
Corp Schedules is a complete list of all HNLLC Intangibles that will be issued
to or owned by HNLLC on the Closing Date, all of which are valid and uncontested
and copies of all documents evidencing all HNLLC Intangibles have been made
available to Healtheon/WebMD. Section 4.15(b) of the News Corp Schedules is a
complete list of all Internet Intangibles that will be issued to or owned by
H&FLLC on the Closing Date, all of which are valid and uncontested and copies of
all documents evidencing all Internet Intangibles have been made available to
Healtheon/WebMD. The HNLLC Intangibles include all intangible assets necessary
or used to operate The Health Network cable TV channel as currently operated.
The Internet Intangibles include all intangible assets necessary or used to
operate AHN/FIT Internet as currently operated. Except as set forth in Section
4.15(c) of the News Corp Schedules, neither the News Corp Parties, H&FLLC nor
HNLLC has received any notice or demand alleging that H&FLLC, HNLLC, AHN/FIT
Internet or AHN/FIT Cable, or any part thereof, is infringing upon any
copyrights, trademarks, trade names, service marks, service names, common law
right or literary, dramatic, musical or motion picture right or similar
intellectual property rights owned by any other person. Neither H&FLLC, HNLLC,
AHN/FIT Internet nor AHN/FIT Cable has granted, assigned, mortgaged, pledged or
hypothecated any right, title or interest of any kind whatsoever in or to the
Internet Intangibles or the HNLLC Intangibles.
4.16 Subscribers. As of November 1, 1999, there were 13.5 million
-----------
Subscribers to The Health Network cable TV channel. For the purposes hereof,
"Subscriber" shall mean as of any date a multichannel video subscriber capable
of receiving at least 24 hours per day, 7 days per week (subject to system
failure) of The Health Network programming services.
4.17 Litigation; Compliance with Laws. As of the date of the Master
--------------------------------
Strategic Alliance Agreement, there are no actions, suits, investigations or
proceedings (adjudicatory or rulemaking) pending or, to the knowledge of the
News Corp Parties, threatened against the News Corp Parties, H&FLLC or HNLLC or
any of their respective properties in any court or before any arbitrator of any
kind or before or by any governmental entity which relates to H&FLLC, HNLLC,
AHN/FIT Internet, AHN/FIT Cable or The Health Network cable TV channel. Each of
the News Corp Parties, H&FLLC and HNLLC is in compliance with all applicable
laws, statutes, regulations, codes, ordinances or rules (including all
applicable federal, state and local laws and regulations governing privacy on
the Internet including but not limited to the requirements of the Children's
Online Privacy Protection Act, P.L. 105-277 (1998)) which relate to H&FLLC,
HNLLC, AHN/FIT Internet, AHN/FIT Cable or The Health Network cable TV channel,
except where the failure to comply would not reasonably be expected to have a
material adverse effect on the business, results of operations or financial
condition of HNLLC or H&FLLC.
14
<PAGE>
4.18 Financial Statements.
--------------------
4.18.1 Attached to Section 4.18(a) of the News Corp Schedules
is (i) the unaudited balance sheet as of September 26, 1999 and the related
unaudited statements of operations and cash flows for the periods then ending
for AHN/FIT Cable, (ii) the unaudited balance sheet as of June 27, 1999,
December 31, 1998 and December 31, 1997 and the related unaudited statements of
operations and cash flows for the periods then ending for AHN/FIT Cable, and
(iii) the unaudited balance sheet as of June 27, 1999, December 31, 1998 and
December 31, 1997 and the related unaudited statements of operations and cash
flows for the periods then ending for Fit TV Partnership (collectively, the
"Health Channel Financial Statements"). The Health Channel Financial Statements,
including any related notes thereto (as of the dates thereof and for the periods
covered thereby), (i) are prepared in accordance with United States GAAP (except
as may be indicated in the notes thereto); (ii) are in accordance with the books
and records of AHN/FIT Cable and Fit TV Partnership, which books and records are
complete and accurate in all respects and have been maintained in accordance
with reasonable business practices; and (iii) fairly present the financial
position of AHN/FIT Cable and Fit TV Partnership as at the date thereof and the
results of their operations and cash flows for the periods indicated, except
that the Health Channel Financial Statements for the 3 months ended September
26, 1999 do not contain footnotes and are subject to normal and recurring
year-end adjustments which will not, individually or in the aggregate, be
material.
4.18.2 Attached to Section 4.18(b) of the News Corp Schedules
is (i) the unaudited balance sheet as of September 26, 1999 and the related
unaudited statements of operations and cash flows for the periods then ending
for AHN/FIT Internet, and (ii) the unaudited balance sheet as of June 27, 1999,
December 31, 1998 and December 31, 1997 and the related unaudited statements of
operations and cash flows for the periods then ending for Fit TV Holdings, LLC
("TV Holdings") (collectively, the "Internet Financial Statements"). The
Internet Financial Statements, including any related notes thereto (as of the
dates thereof and for the periods covered thereby), (i) are prepared in
accordance with United States GAAP (except as may be indicated in the notes
thereto); (ii) are in accordance with the books and records of AHN/FIT Internet
and TV Holdings, which books and records are complete and accurate in all
respects and have been maintained in accordance with reasonable business
practices; and (iii) fairly present the financial position of AHN/FIT Internet
and TV Holdings as at the date thereof and the results of operations and cash
flows of AHN/FIT Internet and TV Holdings for the periods indicated, except that
the Internet Financial Statements for the 3 months ended September 26, 1999 do
not contain footnotes and are subject to normal and recurring year-end
adjustments which will not, individually or in the aggregate, be material.
4.19 No Undisclosed Liabilities. Neither HNLLC, H&FLLC, AHN/FIT Cable
--------------------------
nor AHN/FIT Internet has any liabilities, obligations or commitments of any
nature (whether absolute, accrued, contingent or otherwise), matured or
unmatured (herein "Liabilities"), except (a) Liabilities that were disclosed or
provided for in the Health Channel Financial Statements or the Internet
Financial Statements, or (b) Liabilities which have been incurred in the
ordinary course of business consistent with past practice since June 27, 1999.
4.20 Agreements with Related Parties. Other than as set forth in
-------------------------------
Section 4.20 of the News Corp Schedules, as of the date of the Master Strategic
Alliance Agreement neither the News Corp Parties nor any of their Affiliates is
a party to any agreement with AHN/FIT Cable, AHN/FIT Internet, HNLLC or H&FLLC
providing for the payment of an amount or amounts in excess of $25,000 in the
aggregate.
15
<PAGE>
5. MISCELLANEOUS.
5.1 Governing Law. This Agreement shall be governed by and
-------------
construed under the laws of the State of Delaware, without regard to its
principles of conflicts of laws.
5.2. Survival. The representations, warranties, covenants and
--------
agreements made in this Agreement shall survive any investigation made by any
party hereto and the consummation of the transactions contemplated hereby.
5.3. Assignment. This Agreement may not be assigned by any party
----------
hereto, except as otherwise expressly provided herein.
5.4. Entire Agreement; Amendment; Waiver. This Agreement, the other
-----------------------------------
Transaction Documents and the other documents delivered pursuant hereto and
thereto constitute the full and entire understanding and agreement among the
parties with regard to the subjects hereof and thereof. Neither the Transaction
Documents nor any term thereof may be amended, waived, discharged or terminated
except by a written instrument signed by the News Corp Parties and
Healtheon/WebMD.
5.5. Notices. All notices or other communications which are required
-------
or permitted under this Agreement shall be in writing and sufficient if
delivered by hand, by facsimile transmission, by registered or certified mail,
postage pre-paid, or by courier or overnight carrier, to the persons at the
addresses set forth below (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered as of the date so
delivered:
If to Healtheon/WebMD: Healtheon/WebMD Corporation
400 The Lenox Building
3399 Peachtree Road
Atlanta, Georgia 30326
Attention: W. Michael Heekin, Esq.
Healtheon/WebMD Corporation
4600 Patrick Henry Road
Santa Clara, California 95054
Attention: Jack Dennison, Esq.
With a copy to: Nelson Mullins Riley & Scarborough, L.L.P.
Bank of America Corporate Center
Suite 2600
100 North Tryon Street
Charlotte, North Carolina 28202
Attention: H. Bryan Ives III, Esq.
C. Mark Kelly, Esq.
If to the News Corp Parties: The News Corporation Limited
c/o News America Incorporated
1211 Avenue of the Americas
New York, New York 10036
Facsimile (212) 768-2029
Attention: Arthur M. Siskind, Esq.
16
<PAGE>
With a copy to: Squadron, Ellenoff, Plesent & Sheinfeld, LLP
551 Fifth Avenue
New York, New York 10176
Facsimile (212) 697- 6686
Attention: Joel I. Papernik, Esq.
or at such other address as any party shall have furnished to the other parties
in writing.
5.6. Agent's Fees. Each party (i) represents and warrants that it has
------------
retained no finder or broker in connection with the transactions contemplated by
this Agreement and (ii) hereby agrees to indemnify and to hold the other party
harmless of and from any liability for commissions or compensation in the nature
of an agent's, finder's or broker's fee to any broker or other person or firm
(and the cost and expenses of defending against such liability or asserted
liability) for which said party is responsible.
5.7. Expense. Each party shall bear its own expenses and legal
-------
fees (and expenses and disbursements of its legal counsel) incurred on its
behalf with respect to this Agreement.
5.8 Construction of Certain Terms. The titles of the articles,
-----------------------------
sections, and subsections of this Agreement are for convenience of reference
only and are not to be considered in construing this Agreement.
5.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
5.10 Facsimile Signature. Facsimile signatures shall be considered
-------------------
original signatures for purposes of execution and enforcement of the rights
delineated in this Agreement.
5.11 Remedies Cumulative; Waiver. No remedy referred to in this
---------------------------
Agreement or in any exhibit thereto is intended to be exclusive, but each shall
be cumulative and in addition to any other remedy referred to above or otherwise
available to a party at law or in equity. No express or implied waiver by any
party of any default shall be a waiver of any future or subsequent default. The
failure or delay of any party in exercising any rights granted it in this
Agreement shall not constitute a waiver of any such right and any single or
partial exercise of any particular right by such party shall not exhaust the
same or constitute a waiver of any other right provided herein.
5.12. Timely Performance. Time is of the essence as to the
-------------------
performance of the obligations required of the respective parties under this
Agreement and the other Transaction Documents.
5.13. Severability. In the event any one or more of the provisions
------------
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein or therein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
5.14 Indemnification.
---------------
5.14.1 The News Corp Parties, jointly and severally, shall
indemnify and hold harmless Healtheon/WebMD (and Healtheon/WebMD's affiliates,
and its and their respective directors,
17
<PAGE>
officers, employees, agents, successors, assigns and licensees) (collectively,
"Healtheon/WebMD Indemnified Parties") from and against all losses, costs,
liabilities and expenses (including, without limitation, reasonable attorneys'
fees, court costs and any judgment and settlement payments) or claims suffered
by, incurred by or imposed upon Healtheon/WebMD Indemnified Parties by reason of
any (i) breach by the News Corp Parties of any of their representations,
warranties, undertakings and covenants hereunder or (ii) imposition of any
withholding taxes in connection with the issuance of the Purchased Shares
pursuant to the Transaction Documents.
5.14.2 Healtheon/WebMD, H/W Cable Sub and H/W Internet Sub,
jointly and severally, shall indemnify and hold harmless the News Corp Parties
(and their affiliates, and their respective directors, officers, employees,
agents, successors, assigns and licensees) (collectively, the "News Corp
Indemnified Parties") from and against all losses, costs, liabilities and
expenses (including, without limitation, reasonable attorneys' fees, court costs
and any judgement and settlement payments) or claims suffered by, incurred by or
imposed upon the News Corp Indemnified Parties by reason of any breach by
Healtheon/WebMD of any of its representations, warranties, undertakings and
covenants hereunder.
5.14.3 The parties seeking indemnification under Section 5.14
deliver written notice to the party or parties required to provide
indemnification, setting forth in detail the factual basis for indemnification
and the amount thereof, or a good faith estimate thereof, sought to be
indemnified (the "Indemnification Notice"). The indemnified party or parties
shall use its or their best efforts to provide in its or their Indemnification
Notice sufficient detail to enable the indemnifying party or parties to evaluate
the claim. Except with respect to Indemnification Claims covered by Section
5.14.6 (which relates to third party claims), within 30 days (the "Objection
Period") of the date such Indemnification Notice is given, the indemnifying
party shall respond to the Indemnification Notice. The indemnifying party shall
be entitled to cure any default which is capable of cure during the Objection
Period, and the amount of the claim for indemnification contained in the
Indemnification Notice shall be reduced by the amount of the damages mitigated
by cure. If the indemnifying party or parties agree in writing during the
Objection Period to accept any of the claims included in the Indemnification
Notice, such party shall promptly pay the amounts so agreed upon. In all other
cases, the indemnified party or parties and the indemnifying party or parties
shall use their respective good faith reasonable efforts to resolve the dispute
within 60 days of the date such Indemnification Notice is given (the "Settlement
Period"). If the dispute is not resolved within the Settlement Period, the
parties shall be free to commence litigation to enforce their rights to
indemnification under Section 5.14; provided, however, that if such litigation
has not been commenced on or prior to twelve months following the date such
Indemnification Notice is given, all rights of the indemnified party or parties
to indemnification with respect to the matters set forth in that Indemnification
Notice shall be deemed to have been irrevocably waived and released by the
indemnified party or parties, and shall terminate and expire.
5.14.4 Notwithstanding any provisions of Section 5.14 to the
contrary, Healtheon/WebMD's rights to indemnification for breaches of the
representations, warranties and covenants contained in Section 4 (other than
Sections 4.4, 4.6 and 4.12) shall be available only if Healtheon/WebMD delivers
an Indemnification Notice with respect to such claim prior to the date which is
24 months after the date of this Agreement (the "Section 5.14.4 Indemnification
Period"). The rights of Healtheon/WebMD to indemnification under Section 5.14
relating to any other representation, warranty or covenant of the News Corp
Parties shall not be subject to the Section 5.14.4 Indemnification Period.
18
<PAGE>
5.14.5 Notwithstanding any provisions of Section 5.14 to the
contrary, the News Corp Parties' rights to indemnification for breaches of the
representations and warranties contained in Section 3 (other than Sections 3.3
and 3.7) shall be available only if one of the News Corp Parties deliver an
Indemnification Notice with respect to such claim prior to the date which 24
months after the date of this Agreement (the "Section 5.14.5 Indemnification
Period"). The rights of the News Corp Parties, as applicable, to indemnification
under Section 5.14 relating to any other representation or warranty of
Healtheon/WebMD shall not be subject to the Section 5.14.5 Indemnification
Period.
5.14.6 If any of the indemnified parties is made or threatened
to be made a defendant in or party to any action or proceeding, judicial or
administrative, instituted by any third person for the liability under which or
the costs or expenses of which any of the indemnified parties is entitled to be
indemnified pursuant to Section 5.14 (any such third party action or proceeding
being referred to as an "Indemnification Claim"), the indemnified party or
parties shall give prompt notice thereof to the indemnifying party; provided
that the failure to give such notice shall not affect the indemnified party or
parties' ability to seek indemnification hereunder unless such failure has
materially and adversely affected the indemnifying party or parties' ability to
prosecute successfully an Indemnification Claim. Each indemnified party shall
permit the indemnifying party, at its own expense, to assume the defense of any
such claim or any litigation to which this Section 5.14 may be applicable, by
counsel reasonably satisfactory to the indemnified party or parties; provided,
that the indemnified party or parties shall be entitled at any time, at its or
their own cost and expense (which expense shall not be recoverable from the
indemnifying party unless the indemnifying party is not adequately representing
or, because of a conflict of interest, may not adequately represent, the
parties' interests), to participate in such claim, action or proceeding and to
be represented by attorneys of its or their own choosing. If the indemnified
party or parties elects to participate in such defense, such party or parties
will cooperate with the indemnifying party in the conduct of such defense. The
indemnified party or parties may not concede, settle or compromise any
Indemnification Claim without the consent of the indemnifying party. The
indemnifying party, in the defense of any such claim or litigation, shall not,
except with the approval of each indemnified party, consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
or parties of a full and complete release from all liability in respect to such
claim or litigation.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
19
<PAGE>
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the day and year first above written.
HEALTHEON/WEBMD CORPORATION
By:
-------------------------------------------
Its:
-----------------------------------
HEALTHEON/WEBMD CABLE CORPORATION
By:
-------------------------------------------
Its:
-----------------------------------
HEALTHEON/WEBMD INTERNET CORPORATION
By:
-------------------------------------------
Its:
-----------------------------------
FOX ENTERTAINMENT GROUP, INC.
By:
-------------------------------------------
Its:
-----------------------------------
FOX BROADCASTING COMPANY
By:
-------------------------------------------
Its:
-----------------------------------
EASTRISE PROFITS LIMITED
By:
-------------------------------------------
Its:
-----------------------------------
AHN/FIT CABLE, LLC
By:
-------------------------------------------
Its:
-----------------------------------
AHN/FIT INTERNET, LLC
By:
-------------------------------------------
Its:
-----------------------------------
<PAGE>
The undersigned, by its signature below, hereby unconditionally
guarantees the full and prompt payment and performance of all Liabilities of the
News Corp Parties set forth in this Agreement. This is a guaranty of payment and
not of collection. News Corp hereby waives the right to require Healtheon/WebMD
to proceed against the News Corp Parties or any other person or to require
Healtheon/WebMD to pursue any other remedy or enforce any other right.
THE NEWS CORPORATION LIMITED
By:
-------------------------------------------
Its:
-----------------------------------
<PAGE>
EXHIBIT B
CERTIFICATE OF DESIGNATIONS
OF
SERIES A PAYMENT-IN-KIND PREFERRED STOCK
OF
HEALTHEON/WEBMD CORPORATION
(Pursuant to Section 151 of the General
Corporation Law of the State of Delaware)
Healtheon/WebMD Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies that the following resolution was adopted by the Board of Directors of
the Corporation (the "Board of Directors"):
Resolved, that pursuant to the authority expressly granted to and vested in
the Board of Directors by the Tenth Amended and Restated Certificate of
Incorporation of the Corporation (as amended from time to time, the "Certificate
of Incorporation"), there hereby is created, out of the 5,000,000 shares of
preferred stock, par value $.0001 per share, of the Corporation authorized in
Article IV of the Certificate of Incorporation (the "Preferred Stock"), a series
of Preferred Stock consisting of 213,000 shares, which series shall have the
following powers, designations, preferences and relative, participating,
optional and other rights, and the following qualifications, limitations and
restrictions (in addition to the powers, designations, preferences and relative,
participating, optional and other rights, and the qualifications, limitations
and restrictions, stated in the Certificate of Incorporation as applicable to
the Preferred Stock):
"1. Designation. The shares of such series created hereby shall be
designated as the "Series A Payment-in-Kind Preferred Stock" (referred to herein
as the "Series A Preferred Stock"), and the authorized number of shares
constituting such series shall be 213,000. The par value of the Series A
Preferred Stock shall be $.0001 per share. The face amount of each share of
Series A Preferred Stock shall be $5,000.00 (the "Face Amount"). The Series A
Preferred Stock shall not be subject to any sinking fund or mandatory redemption
provision.
2. Priority. The Series A Preferred Stock, whether now or hereafter issued,
shall, with respect to dividend rights (other than the right to receive
additional shares of Series A Preferred Stock pursuant to Section 3) and rights
on liquidation, winding up or dissolution, whether voluntary or involuntary,
rank (i) on a parity with the common stock, par value $.0001 per share (the
"Common Stock"), of the Corporation and with any other series of Preferred Stock
established hereafter by the Board of Directors the terms of which shall
specifically provide that such series shall rank on a parity with the Series A
Preferred Stock with respect to dividend rights and rights on liquidation,
winding up or dissolution, (ii) junior to any series of Preferred Stock
established hereafter by the Board of Directors the terms of which shall
specifically provide that such series shall rank senior to the Series A
Preferred Stock with respect to dividend rights and rights on liquidation,
winding up or dissolution and (iii) senior to any series of Preferred Stock
established hereafter by the Board of Directors the terms of which shall
specifically provide that such series shall rank junior to the Series A
Preferred Stock with respect to dividend rights and rights on liquidation,
winding up or dissolution.
<PAGE>
3. Dividends.
3.1 General Obligation. When, as and if declared by the Board of Directors
and to the extent permitted by the General Corporation Law of the State of
Delaware, the Corporation shall pay preferential dividends to the holders of the
shares of Series A Preferred Stock in the form of additional shares of Series A
Preferred Stock as provided in this Section 3. Regardless of whether dividends
are paid, dividends on each share of the Series A Preferred Stock outstanding
from time to time shall accrue on a daily basis at the rate of 10.5% per annum
computed on an amount with respect to each share equal to the Face Amount plus
the amount of any accrued and unpaid dividends calculated from the date of
initial issuance of such share through the most recently preceding Quarterly
Dividend Reference Date. The "Quarterly Dividend Reference Dates" are each May
1, August 1, November 1 and February 1 occurring after the initial issuance of
the first share of Series A Preferred Stock and on or prior to the Conversion
Date (as defined below). Dividends shall be paid only by the issuance of
additional shares of Series A Preferred Stock in an amount equal to (i) the
accrued and unpaid dividend on any Quarterly Dividend Reference Date or on the
Conversion Date (if the Conversion Date is not a Quarterly Dividend Reference
Date) divided by (ii) the Face Amount of a share of Series A Preferred Stock.
Dividends shall be paid only as and when declared by the Board of Directors to
holders of record at the close of the Dividend Reference Dates with respect to
which the dividend has been declared and certificates for such dividend shall be
distributed to such holders on such distribution date within ten (10) days after
such record date as the Board of Directors may establish. Dividends shall begin
to accrue on shares of Series A Preferred Stock issued as dividends as of the
day following the record date for their issuance regardless of the actual
distribution of a certificate. All dividends that have been accrued but not
declared shall continue to accrue and accumulate as provided herein. All
dividends that have been accrued and declared shall be paid as provided herein
and dividends on such shares shall begin to accrue as provided herein.
Dividends under this Section 3 shall cease to accrue on the Conversion Date.
The number of shares to be paid as a dividend pursuant to this Section 3 shall
be rounded to the nearest 1/100,000th of a share. All shares of Series A
Preferred Stock issued in payment of dividends hereunder shall be deemed issued
and outstanding on the applicable record date, and will thereupon be duly
authorized, validly issued, fully paid and nonassessable and free and clear of
all liens and charges. The Corporation shall at all times reserve for issuance
sufficient shares of Series A Preferred Stock to enable it to satisfy all
dividends that may accrue hereunder.
3.2 Participation in Dividend Payments on Common Stock. In addition to all
other amounts payable to the holders of the shares of Series A Preferred Stock
under this Section 3, in the event the Corporation shall declare and pay a
dividend upon the Common Stock (whether payable in cash, securities of other
Persons, evidences of indebtedness issued by the Corporation or other Persons,
assets, or options or rights to purchase any such securities or evidences of
indebtedness) other than in shares of Common Stock, the holders of the shares of
Series A Preferred Stock shall be entitled to participate with the holders of
Common Stock in any such dividend payment (as if a Conversion had occurred on
the date immediately prior to the record date for such dividend payment).
4. Voting. In addition to any voting rights provided for elsewhere herein,
in the Certificate of Incorporation and by law, the following provisions shall
apply with regard to voting by the holders of Series A Preferred Stock:
4.1. In General. Each share of Series A Preferred Stock shall be entitled to
a number of votes equal to the number of shares of Common Stock that would be
owned by the holder of such share of Series A Preferred Stock if the Conversion
Date had occurred on the date immediately prior to the record date for such
vote. Except as otherwise provided for herein, in the Certificate of
2
<PAGE>
Incorporation or by law, each share of Series A Preferred Stock shall be
entitled to vote together with the holders of the Common Stock, on each matter
as to which the holders of the Common Stock are entitled to vote, as if the
Series A Preferred Stock and the Common Stock were one class of capital stock
and a Conversion had occurred.
4.2. When Class Vote Required. The Corporation shall not without first
obtaining the affirmative vote or consent of the holders of a least 90% of the
shares of Series A Preferred Stock at the time outstanding, voting as a class,
(i) alter or change the rights, preferences or privileges of the Series A
Preferred Stock, (ii) take any action that would result in an adverse effect on
the rights, preferences or privileges of the Series A Preferred Stock (other
than an action which affects all capital stock of the Corporation in a similar
manner), or (iii) authorize any additional Series A Preferred Stock.
5. Conversion into Common Stock.
5.1. Automatic Conversion. Upon the earlier to occur of (i) the liquidation,
dissolution or winding up, whether voluntary or involuntary, of the Corporation,
(ii) immediately prior to the consummation of any transaction resulting in a
Change of Control of the Corporation, (iii) the first Business Day following
written notice by the Corporation to the holders of the Series A Preferred Stock
that the Board of Directors has resolved to cause a Conversion of the Series A
Preferred Stock, or (iv) January 26, 2003 (the "Third Anniversary") (the date on
which the earliest of such events occurs is referred to herein as the
"Conversion Date"), each share of Series A Preferred Stock outstanding shall be
converted automatically (a "Conversion"), without any requirement of notice or
any other action on the part of the Corporation, any holder of Series A
Preferred Stock or any other Person, into (a) 100 shares of Common Stock (100 is
referred to herein as the "Conversion Rate," as may be adjusted from time to
time), plus (b) that number of shares of Common Stock equal to the dollar amount
of any accrued and declared dividends with respect to such share pursuant to
Section 3 above computed through the Conversion Date divided by the Face Amount
and multiplied by the Conversion Rate, plus, if the Conversion Date is not the
Third Anniversary, (c) the Early Conversion Premium Amount divided by the Face
Amount and multiplied by the Conversion Rate. The "Early Conversion Premium
Amount" shall equal interest on the Face Amount at 10.5% per annum compounded on
each Dividend Reference Date from the day following the Conversion Date through
the Third Anniversary. The number of shares of Common Stock into which the
Series A Preferred Stock is convertible shall be subject to adjustment as
described in Section 5.5. The Corporation shall not issue fractions of shares
of Common Stock upon conversion of the Series A Preferred Stock. If any
fraction of a share of Common Stock would be issuable upon conversion of the
Series A Preferred Stock, then the Corporation shall, in lieu thereof, pay to
the Person entitled thereto an amount in cash equal to the current market price
of such fraction of a share of Common Stock, calculated to the nearest
1/100,000th of a share, to be computed on the Conversion Date.
5.2. Procedures. Upon the conversion of the Series A Preferred Stock, the
holders of the Series A Preferred Stock shall deliver the certificate or
certificates therefor to the principal office of the Corporation or to a
conversion agent designated by the Corporation accompanied by instruments of
transfer in form reasonably satisfactory to the Corporation or to such
conversion agent, duly executed by the registered holder or his duly authorized
attorney, as well as transfer taxes, stamps or funds therefor, or evidence of
payment thereof, if required by Section 5.3. The automatic conversion of any
outstanding shares of Series A Preferred Stock into Common Stock shall be deemed
to have occurred upon the Conversion Date regardless of the delivery of
certificates or other instruments and the Persons entitled to receive shares of
Common Stock issuable upon conversion shall be treated for all
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purposes as the record holders of such shares at and from the Conversion Date;
provided, however, that the Corporation may defer the payment of any dividend or
other distribution with respect to such Common Stock until such deliveries have
been made.
5.3. Taxes. Upon the conversion of the Series A Preferred Stock, the
Corporation shall pay any documentary, stamp or similar issue or transfer tax
due on the issuance of the Common Stock upon conversion, but the holder shall
pay to the Corporation the amount of any tax that is due (or shall establish to
the satisfaction of the Corporation payment thereof) if the shares are to be
issued in a name other than the name of such holder.
5.4. Reservation of Shares. The Corporation shall at all times reserve and
keep available, out of its authorized but unissued shares of Common Stock,
enough shares of Common Stock to issue all shares of Common Stock issuable upon
conversion of the Series A Preferred Stock and shall at all times maintain any
legally required capital or surplus to effectuate the foregoing. All shares of
Common Stock that may be issued upon conversion of shares of Series A Preferred
Stock shall be, when so issued, validly issued, fully paid and nonassessable.
In order that the Corporation may issue shares of Common Stock upon conversion
of shares of Series A Preferred Stock, the Corporation shall comply with all
applicable federal and state securities laws.
5.5. Adjustments to Conversion Rate. The conversion rate in effect at any
time shall be subject to adjustment from time to time as follows:
5.5.1. Adjustments for Stock Splits, Stock Dividends, Etc. If the
Corporation (1) pays a dividend in shares of the Common Stock to holders of the
Common Stock, (2) makes distributions in shares of Common Stock to holders of
the Common Stock, (3) subdivides the outstanding shares of Common Stock into a
greater number of shares of Common Stock, (4) combines the outstanding shares of
Common Stock into a smaller number of shares of Common Stock, or (5) takes
action resulting in a similar effect upon the Common Stock, then, and in every
such case, the Conversion Rate in effect immediately prior to such action shall
be adjusted to equal the Conversion Rate in effect immediately prior to such
action multiplied by a fraction, the numerator of which is the number of issued
and outstanding shares of Common Stock immediately following such action and the
denominator of which is the number of issued and outstanding shares of Common
Stock immediately prior to such action. An adjustment made pursuant to this
Section 5.5.1 shall become effective on the record date in the case of a
dividend or distribution and on the effective date in the case of a subdivision
or combination.
5.5.2. Adjustments for Other Distributions. If the Corporation
distributes pro rata to all holders of the Common Stock shares of any class of
capital stock (excluding the Common Stock), or options, rights or warrants to
acquire any class of capital stock (including the Common Stock), or cash or
other assets of the Corporation (excluding capital stock of the Corporation held
in its treasury), then, and in any such case, the holder of each share of Series
A Preferred Stock shall be entitled to receive, at the time such distribution is
made, the capital stock, options, rights, warrants, cash or other assets so
distributed as if such holder had owned the number of shares of Common Stock
that such holder would have owned at the time of such distribution if the
Conversion Date had occurred immediately prior to the record date for such
distribution. Such adjustment shall become effective on the record date for
determination of the holders of Common Stock entitled to receive the
distribution.
5.6. Computations. All calculations under this Section 5 shall be made to the
nearest 1/100,000th of a share.
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5.7. Shares Other Than Common Shares. If, as result of any adjustment made
pursuant to Section 5.5, the holder of any share of Series A Preferred Stock
thereafter surrendered for conversion shall become entitled to receive any
shares of capital stock of the Corporation other than shares of Common Stock,
then the number of such other shares so receivable upon conversion of any shares
of the Series A Preferred Stock shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Common Stock contained in this Section 5.
5.8. Notice of Conversion Rate Change. Whenever the conversion rate is
adjusted, the Corporation shall promptly mail to all holders of record of shares
of the Series A Preferred Stock a notice of the adjustment.
5.9. Equivalent Conversion. If any of the following occurs, namely: (i) any
reclassification of, or change in, outstanding shares of capital stock of the
class issuable upon conversion of the Series A Preferred Stock (other than a
change in name, or par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination), or (ii) any
consolidation, merger, share exchange or similar transaction (other than events
that would constitute a liquidation for purposes of Section 5.1 or a Change of
Control) to which the Corporation is a party and which does not result in any
reclassification of, or change in (other than a change in name, or par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), outstanding shares of such capital
stock, then the Corporation or the successor corporation, as the case may be,
shall, as a condition precedent to such reclassification, change, consolidation,
merger, share exchange or other transaction, provide in its certificate of
incorporation or other charter document that each share of the Series A
Preferred Stock shall be convertible into the number and class of shares of
capital stock that would have been issuable upon conversion of such share of
Series A Preferred Stock if the Conversion Date had occurred immediately prior
to such reclassification, change, consolidation, merger, share exchange or other
transaction. Such certificate of incorporation or other charter document shall
provide for adjustments that shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 5. If this Section 5.9 applies,
then Section 5.5.1 shall not apply. If, in the case of any such
reclassification, change, consolidation, merger, share exchange or other
transaction, the stock or other securities and property (including cash)
receivable thereupon by a holder of the capital stock issuable upon conversion
of the Series A Preferred Stock includes shares of capital stock or other
securities and property of an entity other than the Corporation or the successor
corporation in such reclassification, change, consolidation, merger, share
exchange or other transaction, then the certificate of incorporation or other
charter document of such other entity shall contain such additional provisions
to protect the interests of the holders of shares of the Series A Preferred
Stock as the Board of Directions shall reasonably consider necessary by reason
of the foregoing, which provisions shall be subject to approval by the
affirmative vote or consent of holders of at least 90% of the shares of the
then-outstanding Series A Preferred Stock, which approval shall not be
unreasonably withheld. The provisions of this Section 5.9 shall similarly apply
to successive reclassifications, changes, consolidations, mergers, share
exchanges or other transactions.
6. Restrictions on Transfer. Each holder of shares of Series A Preferred
Stock or shares of Common Stock issued upon conversion of the Series A Preferred
Stock (the shares of Series A Preferred Stock and the shares of Common Stock
issued upon conversion of the Series A Preferred Stock are referred to
collectively as the "Subject Stock") hereby expressly covenants and agrees as
follows:
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6.1. In General. Until the termination provided for in Section 6.5 below,
such holder shall not (i) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, or otherwise transfer or dispose of,
directly or indirectly, any shares of Subject Stock or any securities
convertible into or exercisable or exchangeable for Subject Stock (including,
without limitation, shares of Subject Stock or securities convertible into or
exercisable or exchangeable for Subject Stock which may be deemed to be
beneficially owned by such holder in accordance with the rules and regulations
of the Securities and Exchange Commission) or (ii) enter into any swap or other
hedging arrangement that transfers all or a portion of the economic consequences
associated with the ownership of any Subject Stock (regardless of whether any of
the transactions described in clause (i) or clause (ii) is to be settled by the
delivery of Subject Stock, or such other securities, in cash or otherwise (each
action described herein is referred to as a "Transfer"). Notwithstanding any
provision of this Section 6 to the contrary, a holder of Subject Stock may
Transfer such Subject Stock to The News Corporation Limited or to any Affiliate
of The News Corporation Limited.
6.2. Effect of Attempted Transfer. Any attempt to Transfer in violation of
this Section 6 shall be null and void and shall be deemed to be in violation
hereof, and neither the Corporation nor the Corporation's transfer agent shall
give any effect in the share transfer records of the Corporation to any such
attempt to Transfer.
6.3. Legends. In addition to any other legends required by law or in the
opinion of counsel to the Corporation, the certificates evidencing shares of
Subject Stock shall bear a legend in substantially the following form:
"THE SALE, PLEDGE, HYPOTHECATION OR OTHER TRANSFER OF THE SECURITIES
EVIDENCED BY THIS CERTIFICATE IS FURTHER RESTRICTED BY PROVISIONS OF THE
CERTFICIATE OF DESIGNATIONS OF THE SERIES A PAYMENT-IN-KIND PREFERRED STOCK
CONTAINED IN THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF THE
CORPORATION, A COPY OF WHICH WILL BE FURNISHED TO THE HOLDER OF THIS
CERTIFICATE WITHOUT CHARGE BY THE CORPORATION UPON WRITTEN REQUEST TO THE
CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS."
6.4. "Stop Transfer" Instructions. A notation will be made in the share
transfer records of the Corporation and "stop transfer" instructions will be
issued with respect to the shares of Subject Stock so as to restrict the resale,
pledge, hypothecation or other transfer thereof, subject to the terms hereof.
6.5. Termination of Transfer Restrictions. The provisions of this Section 6
shall continue in full force and effect until the earlier to occur of (i) one
year after the consummation of a Change of Control of the Corporation, (ii) the
liquidation, dissolution or winding up, whether voluntary or involuntary, of the
Corporation or (iii) the Third Anniversary.
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7. Other Definitions.
"Affiliate" means, with respect to any specified Person, any other Person that
directly or indirectly controls, or is under common control with, or is owned or
controlled by, the specified Person. For purposes of this definition, (i)
"control" means, with respect to any specified Person, either (x) the beneficial
ownership of 20% or more of any class of equity securities issued by such Person
or (y) the power to direct the management and policies of the specified Person
through the ownership of voting securities or other equity interests, by
contract or otherwise, and (ii) the terms "controlling," "control with" and
"controlled by," etc., shall have meanings correlative to the foregoing.
"Business Day" means any day other than a Saturday, Sunday or other day on
which banks are authorized or required to close by law or executive order in
Atlanta, Georgia.
"Change of Control" means (i) the merger, consolidation or other business
combination of the Corporation with or into another corporation or the merger of
another corporation (other than the Corporation or a wholly-owned direct or
indirect subsidiary of the Corporation) with or into the Corporation with the
effect that, immediately after such transaction, the stockholders of the
Corporation immediately prior to such transaction or series of transactions hold
less than a majority of the total voting power entitled to vote in the election
of directors, managers or trustees of the Person surviving such transaction or
series of transactions or (ii) the acquisition by any Person or group of related
Persons by way of merger, sale, transfer, consolidation or other business
combination or acquisition, of (x) all or substantially all of the assets,
property or business of the Corporation or (y) more than 35% of the total voting
power entitled to vote in the election of directors, managers or trustees of the
Corporation or such other Person as survives the transaction, unless in each
case the stockholders of the Corporation immediately prior to such transaction
hold immediately after such transaction 65% or more of the total voting power
entitled to vote in the election of directors, managers or trustees of such
Person.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
[SIGNATURES FOLLOW ON THE NEXT PAGE]
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In Witness Whereof, the Corporation has caused this Certificate of
Designations to be signed by its authorized officers, this 25th day of January,
2000.
Healtheon/WebMD Corporation
By:
-------------------------------
Name:
Title:
Attest:
By:
----------------------------
Name:
Title:
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EXHIBIT C
POWER OF ATTORNEY
Know all by these presents, that the undersigned hereby constitutes
and appoints Arthur M. Siskind the undersigned's true and lawful attorney-in-
fact to:
(1) execute for and on behalf of the undersigned, (a) the Statement on
Schedule 13D, or any amendments thereof, with respect to the ownership
Healtheon/WebMD Corporation securities, and other documents in
connection therewith, pursuant to Section 13(d) of the Securities
Exchange Act of 1934 and the rules thereunder (together, the "Exchange
Act"), (b) Forms 3, 4, and 5, or any amendments thereof, with respect
to the ownership of Healtheon/WebMD Corporation securities pursuant to
Section 16(a) of the Exchange Act, and (c) in each case, any successor
Statement or Forms, or amendments thereof;
(2) do and perform any and all acts for and on behalf of the undersigned
which may be necessary or desirable to complete and execute any such
amendment to the Statement on Schedule 13D or Form 3, 4, or 5 (or any
amendment thereof) and file such documents with the United States
Securities and Exchange Commission and any stock exchange or similar
authority; and
(3) take any other action of any type whatsoever in connection with the
foregoing which, in the opinion of such attorney-in-fact, may be of
benefit to, in the best interest of, or legally required by, the
undersigned, it being understood that the documents executed by such
attorney-in-fact on behalf of the undersigned pursuant to this Power
of Attorney shall be in such form and shall contain such terms and
conditions as such attorney-in-fact may approve in such attorney-in-
fact's discretion.
The undersigned hereby grants to such attorney-in-fact full power and
authority to do and perform any and every act and thing whatsoever, requisite,
necessary, or proper to be done in the exercise of any of the rights and powers
herein granted, as fully to all intents and purposes as each of the undersigned
might or could do if personally present, with full power of substitution or
revocation, hereby ratifying and confirming all that such attorney-in-fact, or
such attorney-in-fact's substitute or substitutes, shall lawfully do or cause to
be done by virtue of this power of attorney and the rights and powers herein
granted. Each of the undersigned acknowledges that such attorney-in-fact, in
serving in such capacity at the request of each of the undersigned, is not
assuming any of each of the undersigned's responsibilities to comply with
Section 13 or Section 16 of the Exchange Act.
This Power of Attorney shall remain in full force and effect until the
undersigned is no longer required to file any such amendment to the Statement on
Schedule 13D or Forms 3, 4, and 5 (or successor Statements or Forms), unless
earlier revoked by the undersigned in a signed writing delivered to the
foregoing attorney-in-fact.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused this Power of Attorney
to be executed as of this 3rd day of February 2000.
/s/ K. Rupert Murdoch
---------------------------
K. Rupert Murdoch
