CAREINSITE INC, S-1/A, 1999-06-11

CAREINSITE INC
S-1/A, 1999-06-11
COMPUTER PROCESSING & DATA PREPARATION

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As filed with the Securities and Exchange Commission on June 11, 1999
Registration No. 333-75071
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------

AMENDMENT NO. 6
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
CareInsite, Inc.
(Exact name of registrant as specified in its charter)
Delaware 7374 22-3630930
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification Number)
incorporation or Classification Code
organization) Number)
---------------
CareInsite, Inc.
669 River Drive, River Drive Center II
Elmwood Park, New Jersey 07407
(201) 703-3400
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
---------------
David C. Amburgey
CareInsite, Inc.

Senior Vice President -- General Counsel
669 River Drive, River Drive Center II
Elmwood Park, New Jersey 07407
(201) 703-3400
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------
Copies to:
Stephen T. Giove Alan L. Jakimo
Shearman & Sterling Brown & Wood LLP
599 Lexington Avenue One World Trade Center
New York, New York 10022 New York, New York 10048
(212) 848-4000 (212) 839-5300
---------------
Approximate date of commencement of proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the
same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the
same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. [_]
---------------

The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment that specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.

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- --------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities until the registration statement filed with the +
+Securities and Exchange Commission is effective. This preliminary prospectus +
+is not an offer to sell these securities and is not soliciting an offer to +
+buy these securities in any state where the offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Subject to Completion

PROSPECTUS Preliminary Prospectus dated June 11, 1999
5,650,000 Shares

[Logo] CareInsite, Inc.

Common Stock

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This is the initial public offering of the common stock of CareInsite, Inc.
We are offering to the public 5,650,000 shares of our common stock. We are
reserving 565,000 of these shares for sale to directors, officers, employees
and consultants of our company, of Synetic, Inc., which owns 80.1% of our
common stock immediately prior to this offering, and of Cerner Corporation, a
strategic stockholder which owns 19.9% of our common stock immediately prior to
this offering, and to certain other persons. In addition, Cerner Corporation
has agreed to purchase directly from us a number of shares of our common stock
with an aggregate purchase price of $9,000,000, at a price per share equal to
the public offering price less the underwriting discount, in a separate private
transaction concurrently with this offering.

This is our initial public offering and no public market exists for our
shares. We anticipate that the initial public offering price will be between
$14.00 and $16.00 per share.

We have applied to list our common stock on the Nasdaq National Market
under the symbol "CARI."

Investing in the shares of our common stock involves risks which are
described in the "Risk Factors" section beginning on page 8 of this prospectus.

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<TABLE>
<CAPTION>
Per Share Total
--------- -----
<S> <C> <C>
Public offering price.................................... $ $
Underwriting discount.................................... $ $
Proceeds, before expenses, to our company................ $ $
</TABLE>

We have granted the underwriters the right to purchase up to an additional
847,500 shares of common stock at the public offering price less the
underwriting discount to cover over-allotments.

The above table does not include estimated net proceeds of $9,000,000
expected to be received in connection with the private sale of shares of common
stock to Cerner concurrently with this offering.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these shares of common stock or
determined if this prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.

The shares of common stock will be ready for delivery in New York, New York
on or about , 1999.

-----------
Merrill Lynch & Co. Warburg Dillon Read LLC
Wit Capital Corporation

-----------

The date of this prospectus is , 1999
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Summary.................................................................. 3
Risk Factors............................................................. 8
Disclosure Regarding Forward-looking Information......................... 17
Use of Proceeds.......................................................... 18
Dividend Policy.......................................................... 18
Capitalization........................................................... 19
Dilution................................................................. 20
Selected Consolidated Financial and Operating Data....................... 21
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 23
Business................................................................. 31
Management............................................................... 45
Security Ownership of Management......................................... 55
Transactions and Relationships With Principal Stockholders............... 57
Description of Capital Stock............................................. 61
Shares Eligible for Future Sale.......................................... 64
Underwriting............................................................. 67
Legal Matters............................................................ 70
Experts.................................................................. 70
Additional Information................................................... 71
Index to Financial Statements............................................ F-1
Unaudited Pro Forma Combined Condensed Consolidated Financial
Statements.............................................................. PF-1
</TABLE>

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You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. We are offering to sell, and seeking offers to
buy, shares of common stock only in jurisdictions where offers and sales are
permitted. The information contained in this prospectus is accurate only as of
the date of this prospectus, regardless of the time of delivery of this
prospectus or of any sale of common stock. Unless otherwise indicated, all
information in this prospectus:

. assumes no exercise of the underwriters' over-allotment option,

. reflects a 50.0625 for 1 split of the common stock effected in the
form of a stock dividend to be declared and paid prior to the
closing of this offering,

. reflects the filing of our amended and restated certificate of
incorporation with the Delaware Secretary of State prior to the
closing of this offering, and

. assumes the number of shares to be purchased by Cerner in a
private transaction concurrently with this offering will be
approximately 645,000, based on an assumed public offering price
of $15.00 per share, less the underwriting discount. This number
will be subject to adjustment based on the public offering price.

----------------

Until , 1999 (25 days after the commencement of this offering), all
dealers that buy, sell or trade our common stock, whether or not participating
in this distribution, may be required to deliver a prospectus. This delivery
requirement is in addition to the obligation of dealers to deliver a prospectus
when acting as underwriters and with respect to their unsold allotments or
subscriptions.

----------------

CareInsite(TM) is a pending trademark of our company.

2
<PAGE>

SUMMARY

This summary highlights information contained elsewhere in this
prospectus. It is not complete and may not contain all of the information that
you should consider before investing in our common stock. You should read the
entire prospectus carefully, including the "Risk Factors" section and the
consolidated financial statements and the notes to those statements.

The Company

We are developing and intend to provide an Internet-based healthcare
electronic commerce, or e-commerce, network that links physicians, payers,
suppliers and patients. We intend to market a comprehensive set of transaction,
messaging and content services to these healthcare industry participants. Our
network, which we call the CareInsite system, is being designed to provide
physicians with relevant clinical, administrative and financial information
from payers and suppliers. We believe our integration of payer-specific rules
and healthcare guidelines with patient-specific information at the point of
care will improve the quality of patient care, lead to more appropriate use of
healthcare resources, gain compliance with benefit plan guidelines and control
healthcare costs.

Healthcare expenditures in the United States totaled approximately $1.0
trillion in 1996, representing a 6.7% compound annual increase since 1990. This
trend is expected to continue. Approximately 85% of annual healthcare costs in
the United States are estimated to be represented by patient care costs as
opposed to administrative costs. We believe that the ability of managed
healthcare organizations to reduce this larger 85% component of healthcare
costs is limited today. Control of these costs is dependent upon compliance
with benefit plan guidelines designed to promote the appropriate use of
healthcare resources and adherence to best clinical practices. We believe
payers are unlikely to gain compliance with these guidelines without an
efficient channel of communication to their affiliated physicians. Our
objective is to provide a leading healthcare e-commerce channel that will
enable real time communication of clinical, administrative and financial
information at the point of care to facilitate compliance with benefit plan
guidelines and control healthcare costs.

We have entered into two significant relationships that represent the
initial execution of our business strategy. Our strategic relationship with
Cerner Corporation provides us with a perpetual, royalty-free license to
several components of Cerner's technology. These components form the foundation
for our CareInsite system. We have also entered into an agreement with The
Health Information Network Connection LLC, referred to as "THINC", an entity
founded by several major managed care organizations in the New York
metropolitan area to facilitate the confidential exchange of healthcare
information. Under this agreement, we are managing THINC's operations and will
make a comprehensive suite of healthcare e-commerce services available to the
New York metropolitan area's more than 40,000 physicians. We have not derived
any revenues from our healthcare e-commerce services to date.

We are a majority-owned indirect subsidiary of Synetic, Inc., a publicly
traded corporation. Synetic has entered into a definitive merger agreement with
Medical Manager Corporation, a publicly traded corporation, that provides for a
strategic business combination between the two companies. Medical Manager is a
leading provider of comprehensive physician practice management systems that
address the financial, administrative and clinical practice needs of
physicians. The Medical Manager practice management systems support a physician
base estimated at more than 120,000 in more than 24,000 medical practices
nationwide. In connection with this business combination, Medical Manager and
our company have entered into an agreement under which we intend to provide our
healthcare e-commerce services to Medical Manager's physicians by integrating
those services into Medical Manager's physician practice management systems.
This agreement will not become effective until completion of the business
combination between Synetic and Medical Manager. We cannot assure you that this
business combination will be completed. We intend to use Medical Manager's

3
<PAGE>

network of independent and company-owned offices with almost 2,000 sales and
technical support personnel as a platform from which to distribute, install and
support our transaction, messaging and content services to Medical Manager
physicians.

On May 24, 1999, we acquired Med-Link Technologies, Inc., a privately
held company based in Somerset, New Jersey, for $14 million in cash. Med-Link
is a regional provider of electronic data interchange services to healthcare
providers and payers in the northeastern United States that automate their
claims and other managed care transactions. Med-Link currently processes over
12 million managed care transactions annually for approximately 12,000
physicians.

Upon completion of the offering and the private sale of approximately
645,000 shares of our common stock to Cerner concurrently with this offering,
Synetic will own approximately 72.9% of the outstanding common stock of our
company. Prior to the offering, Cerner owned 19.9% of our outstanding common
stock. After completion of the offering and the private sale by our company of
approximately 645,000 shares of our common stock to Cerner concurrently with
this offering, Cerner will own approximately 19.0% of the outstanding common
stock of our company. We will also issue to Cerner 2,503,125 shares of our
common stock on or after February 15, 2001 at a price of $.01 per share if we
realize a specified level of physician usage of our services. In addition,
THINC and Cerner have warrants exercisable for up to an aggregate of 5,067,563
shares of our common stock. These warrants are exercisable 180 days after
completion of this offering.

----------------

Our principal executive offices are located at 669 River Drive, River
Drive Center II, Elmwood Park, New Jersey 07407 and our telephone number at
that address is (201) 703-3400.

4
<PAGE>

The Offering

Common stock offered by our
company............................. 5,650,000 shares

Common stock outstanding
immediately prior to the 63,375,000 shares
offering...........................

Common stock outstanding after the 69,670,000 shares, including an
offering............................ estimated 645,000 shares which
Cerner has agreed to purchase
directly from us in a separate
private transaction concurrently
with this offering.

Use of proceeds.....................
We intend to use the net proceeds
from this offering for working
capital, including financing the
cost of development and deployment
of our services, increased sales
and marketing activities, and for
general corporate purposes. We may
use a portion of the net proceeds
to fund acquisitions. See "Use of
Proceeds."

Dividend policy..................... We do not anticipate paying any
cash dividends in the foreseeable
future. See "Dividend Policy."

Proposed Nasdaq National Market
symbol.............................. "CARI "

Risk factors........................ You should consider the risks
involved in an investment in our
common stock. See "Risk Factors."

The foregoing information excludes:

. an aggregate of up to 5,067,563 shares of common stock representing
approximately 7.3 % of our common stock outstanding after the
offering which may be issued from time to time upon the exercise of
warrants held by THINC and Cerner;

. 2,503,125 shares of common stock representing approximately 3.6% of
our common stock outstanding after the offering which will be
issued on or after February 15, 2001 to Cerner at a price of $.01
per share if we realize a specified level of physician usage of our
services; and

. 4,000,000 shares of common stock which may be issued upon the
exercise of options outstanding on the date of this prospectus
granted pursuant to our employee stock option plan or our officer
stock option plan and an additional 3,500,000 shares of common
stock reserved for issuance pursuant to these plans. The weighted
average exercise price of all options outstanding on the date of
this prospectus is the initial public offering price per share.

5
<PAGE>

Summary Consolidated Financial Data
(in thousands, except share data)

On December 24, 1996, Synetic acquired Avicenna Systems Corporation. This
acquisition marked the inception of Synetic's healthcare e-commerce business.
The "Pro Forma As Adjusted" consolidated balance sheet data below is based on
62,500,000 shares of common stock outstanding on March 31, 1999, as adjusted to
give effect to (1) the sale of the 5,650,000 shares of our common stock offered
to the public hereby and the receipt of the estimated net proceeds after
deducting underwriting discounts and commissions and the estimated offering
expenses, (2) our acquisition of Med-Link and the related sale by us of 875,000
shares of our common stock to Synetic and Cerner for $14,000, which we used to
acquire Med-Link, and (3) the sale by us of an estimated 645,000 shares of our
common stock to Cerner in a separate private transaction concurrently with this
offering. See note (1) to our consolidated financial statements for an
explanation of the determination of the number of shares used to compute basic
and diluted net loss per share. See also "Transactions and Relationships with
Principal Stockholders -- Certain Agreements." The summary consolidated
financial data for our company as of March 31, 1999, for the nine-month periods
ended March 31, 1998 and 1999 and for the cumulative period from Inception
(December 24, 1996) through March 31, 1999 are derived from our unaudited
consolidated financial statements which, in the opinion of our management,
include all normal and recurring adjustments necessary to present fairly the
financial position and the results of operations of our company for those
periods. The operating results for the nine months ended March 31, 1999 are not
necessarily indicative of the operating results to be expected for the full
year. The following summary consolidated financial data should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations," our consolidated financial statements and notes
thereto and other financial information included elsewhere in this prospectus.

<TABLE>
<CAPTION>
Cumulative
Period from from
inception Nine months ended inception
(12/24/96) Year March 31, (12/24/96)
through Ended ------------------- through
06/30/97 06/30/98 1998 1999 03/31/99
----------- -------- -------- --------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Service revenue (related
party)................. $ -- $ -- $ -- $ 213 $ 213
Cost of services
(related party)........ -- -- -- 213 213

Costs and expenses
Research &
development.......... 7,652 4,762 3,976 8,720(/1/) 21,134(/1/)
Sales & marketing..... 1,150 1,733 1,232 1,427 4,310
General &
administrative....... 1,379 3,887 2,589 2,944 8,210
Litigation costs...... -- -- -- 2,500(/2/) 2,500(/2/)
Other income, net..... (9) (47) (7) (110) (166)
Acquired in-process
research &
development.......... 32,185(/3/) -- -- -- 32,185(/3/)
-------- -------- -------- --------- --------
Total costs &
expenses........... 42,357 10,335 7,790 15,694 68,386
-------- -------- -------- --------- --------
Net loss................ $(42,357) $(10,335) $ (7,790) $ (15,481) $(68,173)
======== ======== ======== ========= ========
Net loss per share --
basic & diluted....... $ (0.85) $ (0.21) $ (0.16) $ (0.29) $ (1.33)
Weighted average shares
outstanding -- basic &
diluted................ 50,063 50,063 50,063 54,208 51,444
</TABLE>

(Footnotes on following page)

6
<PAGE>

<TABLE>
<CAPTION>
03/31/99
-------------------
Pro Forma
06/30/97 06/30/98 Actual As Adjusted
-------- -------- ------- -----------
(unaudited)
<S> <C> <C> <C> <C>
Balance Sheet Data:
Working capital (deficit)............. $(1,592) $ 775 $ 4,342 $ 91,133
Total assets.......................... 3,476 10,833 43,935 145,598
Stockholders' equity.................. 1,566 7,798 41,250 142,068
</TABLE>
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(1) Includes a write-off of $2,381 of capitalized software costs which relate
to the abandonment of our development efforts with respect to certain of
our products and services. Those efforts were abandoned as a result of
encountering a high risk development issue associated with integrating
those products and services with the acquired Cerner technology.

(2) Represents charges relating to expenses incurred in conjunction with the
Merck litigation in the quarter ended March 31, 1999. See "Risk Factors --
Litigation by Merck & Co., Inc. and Merck-Medco Managed Care, L.L.C.
against our company."

(3) Represents a non-recurring charge related to the write-off of acquired in-
process research and development costs in conjunction with the purchase of
Avicenna Systems Corporation and CareAgents, Inc.

7
<PAGE>

RISK FACTORS

You should carefully consider the risks described below before making a
decision to invest in our common stock. Some of the following factors relate
principally to our business and the industry in which we operate. Other factors
relate to our company's relationship with Synetic and our strategic partners.
Finally, other factors relate principally to your investment in our common
stock. The risks and uncertainties described below are not the only ones facing
our company. Additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also impair our business and operations.

If any of the matters included in the following risks were to occur, our
business, financial condition, results of operations, cash flows or prospects
could be materially adversely affected. In such case, the trading price of our
common stock could decline, and you could lose all or part of your investment.

Evaluating our business is difficult because our business model is unproven; we
only recently began to generate revenues and we have incurred net losses since
inception

Our company began operations in December 1996 and we have not yet
delivered any of our healthcare e-commerce services. Therefore, our historical
financial information is of limited value in projecting our future operating
results. We did not generate our first revenues, which were related to the
provision of management services to THINC, until the quarter ended March 31,
1999. As of March 31, 1999, we had an accumulated deficit of $68.2 million. We
expect to continue to incur significant development, deployment and sales and
marketing expenses in connection with our business. We may also incur expenses
in connection with acquisitions or other strategic relationships which we may
enter into. As a result, we expect that we will continue to incur operating
losses for at least the next two fiscal years and we caution that we may never
achieve or sustain profitability. In addition, it is difficult to value our
business and evaluate our prospects because our revenue and income potential is
unproven and our business model is still emerging. The provision of services
using Internet technology in the healthcare e-commerce industry is a developing
business that is inherently riskier than businesses in industries where
companies have established operating histories.

We will not become profitable unless we achieve sufficient levels of physician
penetration and market acceptance of our services

Our business model depends on our ability to generate usage by a large
number of physicians with a high volume of healthcare transactions and to sell
healthcare e-commerce services to payers and other healthcare constituents. The
acceptance by physicians of our transaction, messaging and content services
will require adoption of new methods of conducting business and exchanging
information. We cannot assure you that physicians will integrate our services
into their office workflow, or that the healthcare market will accept our
services as a replacement for traditional methods of conducting healthcare
transactions. The healthcare industry uses existing computer systems that may
be unable to access our Internet-based solutions. Customers using existing
systems may refuse to adopt new systems when they have made extensive
investment in hardware, software and training for existing systems or if they
perceive that our CareInsite system will not adequately protect proprietary
information. Failure to achieve broad physician penetration or successfully
contract with healthcare participants would have a material adverse effect on
our business, financial condition and results of operations.

Achieving market acceptance for our services will require substantial
marketing efforts and expenditure of significant funds to create awareness and
demand by participants in the healthcare industry. We believe that we must gain
significant market share with our services before our competitors introduce
alternative services with features similar to ours. We cannot assure you that
we will be able to succeed in positioning our services as a preferred method
for healthcare e-commerce, or that any pricing strategy that we develop will be
economically viable or acceptable to the market. Failure to successfully market
our services would have a material adverse affect on our business, financial
condition and results of operations.

8
<PAGE>

We intend to leverage our relationship with Medical Manager to increase
the number of physicians to whom we can sell our services. However, our
agreement with Medical Manager does not become effective until completion of
the business combination between Synetic and Medical Manager, which is subject
to approval by Synetic's and Medical Manager's stockholders, regulatory
approval and certain other customary conditions. Either Synetic or Medical
Manager may terminate their agreement to merge in certain events, including if
the merger is not completed by November 30, 1999, and Medical Manager may
terminate the merger agreement if the average closing price of Synetic's common
stock during a ten-day period preceding the vote of Medical Manager
stockholders is less than $56.00 per share. The closing price of Synetic's
common stock on June 2, 1999 was $83.375 per share. If this agreement does not
become effective, we will not receive the expected benefits of this agreement
relating to physician penetration.

Our business prospects will suffer if we are not able to quickly and
successfully deploy our CareInsite system

We believe that our business prospects will suffer if we do not deploy
our services quickly. We have not deployed our architecture or processed any
transactions over our CareInsite system. We currently intend to deploy access
to our services by the end of 1999, although we cannot assure you that we will
be able to do so at that time, or at all. In order to deploy our services, we
must integrate our architecture with physicians', payers' and suppliers'
systems. We will need to expend substantial resources to integrate our
CareInsite system with the existing computer systems of large healthcare
organizations. We have limited experience in doing so, and we may experience
delays in the integration process. These delays would, in turn, delay our
ability to generate revenue from our services and may have a material adverse
effect on our business, financial condition and results of operations. Once we
have deployed our CareInsite system, we may need to expand and adapt it to
accommodate additional users, increased transaction volumes and changing
customer requirements. This expansion and adaptation could be expensive. We may
be unable to expand or adapt our network infrastructure to meet additional
demand or our customers' changing needs on a timely basis and at a commercially
reasonable cost, or at all. Any failure to deploy, expand or adapt our
CareInsite system quickly could have a material adverse effect on our business,
financial condition and results of operations.

We rely on strategic relationships that may not provide anticipated benefits

To date, we have entered into strategic relationships with Cerner and
THINC. We have also entered into a strategic agreement with Medical Manager,
the effectiveness of which agreement is subject to completion of the business
combination between Synetic and Medical Manager. These relationships are in the
early stages of development. We may enter into additional strategic
relationships in the future. We cannot assure you that any of these
relationships will provide us with the ability to successfully develop or sell
our services. In addition, we may not be able to establish relationships with
or provide our services to key participants in the healthcare industry if we
have established relationships with their competitors. Consequently, it is
important that we are perceived as independent of any particular customer or
partner. Also, some of our current and potential partners may decide to compete
with us. If any of our current or future strategic relationships are disrupted,
or if we do not realize the expected benefits from these relationships, our
business, financial condition and results of operations may be materially
adversely affected.

Recently, a number of Internet healthcare companies have announced
strategic relationships, including Healtheon Corporation's announced plan to
merge with WebMD, Inc. As a result, we expect to compete with other companies,
including those that may have greater financial resources than our company, for
the right to enter into relationships with strategic partners. This competition
for strategic partners in the healthcare e-commerce industry could affect our
company's ability to consummate future relationships on acceptable terms, or at
all.

9
<PAGE>

We may make acquisitions and integrating them into our business could be
expensive, time consuming and may strain our resources

We may make acquisitions of companies which we believe have attractive
technologies or distribution channels. Integrating newly acquired organizations
and technologies into our company could be expensive, time consuming and may
strain our resources. The healthcare industry is consolidating and we expect
that we will face intensified competition for acquisitions. We cannot assure
you that we will succeed in consummating any such strategic relationships or
acquisitions, or that such transactions will ultimately provide us with the
ability to offer the services described. In addition, we cannot assure you that
we will be able to successfully manage or integrate any resulting business,
including the business of Med-Link. Consequently, we may not achieve
anticipated revenue and cost benefits.

We do not currently have a substantial customer base and our revenues will
initially come from a few payers in one geographic market

We do not currently have a substantial customer base. In addition, we
expect that initially we will generate a significant portion of our revenue
from providing our products and services in the New York metropolitan area and
from a small number of payers. If we do not generate as much revenue in this
market or from these payers as we expect, our revenue will be significantly
reduced which would have a material adverse effect on our business, financial
condition and results of operations.

We may face significant competition in providing healthcare e-commerce products
and services

The market for healthcare e-commerce services is rapidly developing and
is becoming increasingly competitive. Several service companies, some of which
may have greater financial, technological and marketing resources than we do,
have announced that they are developing a combination of one or more healthcare
e-commerce services that may be competitive with ours. We expect to compete
with various industry participants, including software vendors, emerging e-
commerce companies and electronic data interchange providers, who operate
networks used for electronic communication of business transactions such as
orders, confirmations and invoices between organizations. These networks are
often referred to as EDI networks. Some of our competitors have services that
are currently in operation.

Traditional healthcare software vendors such as Medic and IDX primarily
focus on the administrative functions in the healthcare setting. Electronic
data interchange network providers and claims clearinghouses like Envoy, which
was recently acquired by Quintiles Transnational, and NDC provide connectivity
to edit and transmit data on medical and pharmacy claims. These companies are
beginning to offer services which may be competitive with our clinical e-
commerce services. Companies like Healtheon, which recently entered into a
definitive agreement to acquire WebMD, and other emerging e-commerce companies
may offer a range of services which may compete with ours. Any organizations
that create stand-alone healthcare software products may migrate into the
healthcare e-commerce business. Our competitors may be first to market new
services or may also independently develop services and/or technology that is
substantially equivalent to or superior to ours. There can be no assurance that
such companies will not develop and successfully market healthcare e-commerce
products and services in a manner which would have a material adverse effect on
our business, financial condition and results of operations.

We may experience significant delays in generating revenues from our services
because potential customers could take a long time to evaluate the purchase of
our services

A key element of our strategy is to market our services directly to large
healthcare organizations. We do not control many of the factors that will
influence physicians', payers' and suppliers' buying decisions. We expect that
the sales and implementation process will be lengthy and will involve a
significant technical evaluation and commitment of capital and other resources
by physicians, payers and suppliers. The sale and

10
<PAGE>

implementation of our services are subject to delays due to physicians',
payers' and suppliers' internal budgets and procedures for approving large
capital expenditures and deploying new technologies within their networks.

Rapidly changing technology may impair our ability to develop and market our
services

All businesses which rely on Internet technology, including the
healthcare e-commerce business that we are developing, are subject to, among
other risks and uncertainties:

. rapid technological change;

. changing customer needs;

. frequent new product introductions; and

. evolving industry standards.

Internet technologies are evolving rapidly, and the technology used by
any e-commerce business is subject to rapid change and obsolescence. These
market characteristics are exacerbated by the emerging nature of the market and
the fact that many companies are expected to introduce new Internet products
and services in the near future. In addition, use of the Internet may decrease
if alternative protocols are developed or if problems associated with increased
Internet use are not resolved. As the communications, computer and software
industries continue to experience rapid technological change, we must be able
to quickly and successfully modify our services so that they adapt to such
changes. We cannot assure you that we will not experience difficulties that
could delay or prevent the successful development and introduction of our
healthcare e-commerce services or that we will be able to respond to
technological changes in a timely and cost-effective manner. Moreover,
technologically superior products and services could be developed by
competitors. These factors could have a material adverse effect upon our
business, financial condition and results of operations.

We currently have no patents and may be unable to adequately protect our
proprietary rights

Our future success and ability to compete in the healthcare e-commerce
business may be dependent in part upon our proprietary rights to products and
services which we develop. We expect to rely on a combination of patent,
copyright, trademark and trade secret laws and contractual restrictions to
protect our proprietary technology and to rely on similar proprietary rights of
any of our content and technology providers. We currently have no patents
covering any of our technology, whereas some of our competitors have patents
which may cover some aspects of their technology. We intend to file patent
applications to protect certain of our proprietary technology. We cannot assure
you that such applications will be approved or, if approved, will be effective
in protecting our proprietary technology. We enter into confidentiality
agreements with all of our employees, as well as with our clients and potential
clients seeking proprietary information, and limit access to and distribution
of our software, documentation and other proprietary information. There can be
no assurance that the steps we take or the steps such providers take would be
adequate to prevent misappropriation of our respective proprietary rights.

We may be subject to substantial claims if we infringe upon the proprietary
rights of third parties

We expect that we could be subject to intellectual property infringement
claims as the number of our competitors grows and the functionality of our
applications overlaps with competitive offerings. Although we intend to take
steps to minimize the likelihood that we are infringing the proprietary rights
of any third parties, we cannot assure you that patent infringement or other
similar claims will not be asserted against us or one of our content or
technology providers or that such claims will not be successful. We could incur
substantial costs and diversion of management resources with respect to the
defense of any such claims. Furthermore, parties making such claims against us
or a content or technology provider could secure a judgment awarding
substantial damages, as well as injunctive or other equitable relief which
could effectively block our ability to

11
<PAGE>

provide products or services in certain of our markets. Such a judgment could
have a material adverse effect on our business, financial condition and results
of operations. In addition, we cannot assure you that licenses for any
intellectual property of third parties that might be required for our products
or services will be available on commercially reasonable terms, or at all.

Litigation by Merck & Co., Inc. and Merck-Medco Managed Care, L.L.C. against
our company

On February 18, 1999, Merck & Co., Inc. and Merck-Medco Managed Care,
L.L.C. filed a complaint in the Superior Court of New Jersey against our
company, Synetic, Martin J. Wygod, Chairman of our company and Synetic, and
three officers and/or directors of our company and Synetic, Paul C. Suthern,
Roger C. Holstein and Charles A. Mele. The plaintiffs assert that our company,
Synetic and the individual defendants are in violation of certain non-
competition, non-solicitation and other agreements with Merck and Merck-Medco,
and seek to enjoin us and them from conducting our healthcare e-commerce
business and from soliciting Merck-Medco's customers. The Synetic and Wygod
agreements provide an expiration date of May 24, 1999. The other individuals'
agreements provide for expiration in December 1999, in the case of Mr. Suthern,
March 2000, in the case of Mr. Mele, and September 2002, in the case of Mr.
Holstein.

A hearing was held on March 22, 1999 on an application for a preliminary
injunction filed by Merck and Merck-Medco. On April 15, 1999, the Superior
Court denied this application. We believe that Merck's and Merck-Medco's
positions in relation to us and the individual defendants are without merit and
we intend to vigorously defend the litigation. However, the outcome of complex
litigation is uncertain and cannot be predicted at this time. Any unanticipated
adverse result could have a material adverse effect on our company's financial
condition and results of operations.

Our business will suffer if we fail to deal effectively with Year 2000
technology risks

We are not currently aware of any Year 2000 compliance problems relating
to our information technology or non-information technology systems that we
believe would have a material adverse effect on our business, financial
condition and results of operations. There can be no assurance that we will not
discover Year 2000 compliance problems that will require substantial revisions
to our systems, products or services. In addition, there can be no assurance
that third-party software, hardware or services incorporated into our material
information technology and non-information technology systems will not need to
be revised or replaced, all of which could be time consuming and expensive. Any
failure to fix our information technology systems or to replace third-party
software, hardware or services on a timely basis could result in lost revenues,
increased operating costs, the loss of customers and other business
interruptions, any of which could have a material adverse effect on our
business, results of operations and financial condition.

In addition, there can be no assurance that physicians, payers,
suppliers, Internet access companies, third-party service providers, vendors,
business partners and others outside our control will be Year 2000 compliant.
The failure by such entities to be Year 2000 compliant could result in a
systemic failure beyond our control, such as a prolonged Internet or
communications failure, which could also prevent us from delivering our
services to customers, decrease the use of the Internet or prevent users from
accessing our service. Such a failure could have a material adverse effect on
our business, results of operations and financial condition. Also, a general
Year 2000 systemic failure could require healthcare companies to spend large
amounts of money to correct any such failures, reducing the amount of money
that might otherwise be available to be spent on services such as ours.

As the Year 2000 issue has many elements and potential consequences, some
of which are not reasonably foreseeable, the ultimate impact of the Year 2000
on our operations could differ materially from our expectations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Year 2000."

12
<PAGE>

Our business will suffer if the integrity and security of our systems is
inadequate

We believe that once we begin to deliver our healthcare e-commerce
services, our business could be harmed if we or our present or future customers
were to experience any system delays, failures or loss of data. We currently
intend to initially process substantially all our customer transactions and
data at our facilities in Cambridge, Massachusetts. Although we intend to have
safeguards for emergencies, the occurrence of a catastrophic event or other
system failure at our facilities could interrupt our operations or result in
the loss of stored data. In addition, we will depend on the efficient operation
of Internet connections from customers to our systems. These connections, in
turn, depend on the efficient operation of Web browsers, Internet service
providers and Internet backbone service providers. In the past, Internet users
have occasionally experienced difficulties with Internet and online services
due to system failures. Any disruption in Internet access provided by third
parties could have a material adverse effect on our business, results of
operations and financial condition. Furthermore, we will be dependent on
hardware suppliers for prompt delivery, installation and service of equipment
used to deliver our services.

Despite the implementation of security measures, our infrastructure may
be vulnerable to damage from physical break-ins, computer viruses, programming
errors, attacks by hackers or similar disruptive problems. A material security
breach could damage our reputation or result in liability to us. We will retain
confidential customer and patient information in our processing center. An
experienced computer user who is able to access our computer systems could gain
access to confidential patient and company information. Furthermore, we may not
have a timely remedy to secure our system against any hacker who has been able
to penetrate our system. Therefore, it is critical that our facilities and
infrastructure remain and are perceived by the marketplace to be secure. The
occurrence of any of these events could result in the interruption, delay or
cessation of service, which could have a material adverse effect on our
business, results of operations and financial condition.

A significant barrier to electronic commerce and communications are the
issues presented by the secure transmission of confidential information over
public networks. We will rely on encryption and authentication technology
licensed from third parties to secure Internet transmission of and access to
confidential information. There can be no assurance that advances in computer
capabilities, new discoveries in the field of cryptography, or other events or
developments will not result in a compromise or breach of the methods we will
use to protect customer transaction data. A party who is able to circumvent our
security measures could misappropriate or alter proprietary information or
cause interruptions in our operations. If any such compromise of our security
or misappropriation of proprietary information were to occur, it could have a
material adverse effect on our business, financial condition, and results of
operations. We may be required to expend significant capital and other
resources to protect against such security breaches or to alleviate problems
caused by security breaches. We may also be required to spend significant
resources and encounter significant delays in upgrading our systems to
incorporate more advanced encryption and authentication technology as it
becomes available. Concerns over the security of the Internet and other online
transactions and the privacy of users may also inhibit the growth of the
Internet and other online services generally, and our services in particular,
especially as a means of conducting commercial and/or healthcare-related
transactions. There can be no assurance that our security measures will prevent
security breaches or that failure to prevent such security breaches will not
have a material adverse effect on our business, prospects, financial condition,
and results of operations.

Our operations will also be dependent on the development and maintenance
of software. Although we intend to use all necessary means to ensure the
efficient and effective development and maintenance of software, both
activities are extremely complex and thus frequently characterized by
unexpected problems and delays.

13
<PAGE>

We will need to expand our management information systems and personnel to meet
the increased demands of our business

Although our existing management information systems are sufficient to
meet our current needs, we intend to acquire new systems to meet the
requirements of our expanded operations. These systems need, among other
requirements, to capture complex information. There can be no assurance that
these new management information systems, when installed, will be sufficient to
meet our needs. In addition, we may experience interruptions of service when we
transition from our existing systems to new ones. Our ability to achieve our
financial and operational objectives also depends on our ability to continue to
hire, retain and motivate highly qualified technical and customer support
personnel. A competitive environment exists for qualified personnel and we
cannot assure you that we will be able to expand our personnel to meet any
increased demands of our business.

Government regulation of the Internet or healthcare e-commerce services could
adversely affect our business

Our services may be subject to extensive and frequently changing
regulation at federal, state and local levels. The Internet and its associated
technologies are also subject to government regulation. Many existing laws and
regulations, when enacted, did not anticipate the methods of healthcare e-
commerce we are developing. We believe, however, that these laws and
regulations may nonetheless be applied to our healthcare e-commerce business.
Accordingly, our healthcare e-commerce business may be affected by current
regulations as well as future regulations specifically targeted to this new
segment of the healthcare industry.

We expect to conduct our healthcare e-commerce business in substantial
compliance with all material federal, state and local laws and regulations
governing our operations. However, the impact of regulatory developments in the
healthcare industry is complex and difficult to predict, and there can be no
assurance that we will not be materially adversely affected by existing or new
regulatory requirements or interpretations. It is also possible that such
requirements or interpretations could limit the effectiveness of the use of the
Internet for the methods of healthcare e-commerce we are developing or even
prohibit the sale of one or more of our services. Application of any such
regulations or requirements to our business could have a material adverse
effect on our business, financial condition or results of operations. See
"Business--Government Regulation."

Changes in the regulatory and economic environment and consolidation in the
healthcare industry could adversely affect our business

The healthcare industry is highly regulated and is subject to changing
political, economic and regulatory influences. These factors affect the
purchasing practices and operation of healthcare organizations. Changes in
current healthcare financing and reimbursement systems could cause us to make
unplanned enhancements of applications or services, or result in delays or
cancellations of orders or in the revocation of endorsement of our services by
healthcare participants. Federal and state legislatures have periodically
considered programs to reform or amend the U.S. healthcare system at both the
federal and state level. These programs may contain proposals to increase
governmental involvement in healthcare, lower reimbursement rates or otherwise
change the environment in which healthcare industry participants operate.
Healthcare industry participants may respond by reducing their investments or
postponing investment decisions, including investments in our services. We do
not know what effect any of these proposals would have on our business.

Many healthcare industry participants are consolidating to create
integrated healthcare delivery systems with greater market power. As the
healthcare industry consolidates, competition to provide products and services
to industry participants will become more intense and the importance of
establishing a relationship with each industry participant will become greater.
These industry participants may try to use their market power to negotiate
price reductions for our products and services. If we were forced to reduce our
prices, our operating results could suffer if we cannot achieve corresponding
reductions in our expenses.

14
<PAGE>

Our company will be controlled by Synetic and Synetic will be able to elect all
directors and approve all corporate transactions; this relationship may give
rise to conflicts of interest

Immediately prior to the offering, Synetic was the indirect owner of
80.1% of our outstanding common stock. Upon completion of the offering and the
concurrent private sale of approximately 645,000 shares of our common stock to
Cerner, Synetic will own approximately 72.9% of our outstanding common stock
and will therefore retain effective control of our company and will be able to
control the vote on matters submitted to our stockholders and will also be able
to elect all of our directors. In addition, the majority of our directors and
officers are also directors or officers of Synetic and may have conflicts of
interest with respect to certain transactions that may affect our company, such
as transactions involving business dealings between our company and Synetic,
acquisition opportunities, the issuance of additional shares of our common
stock and other matters involving conflicts which cannot now be foreseen.
Officers and directors of our company also beneficially own and have been
granted options to purchase shares of Synetic common stock.

The level of ownership of our outstanding common stock by Synetic may
have the effect of discouraging or making more difficult, absent the support of
Synetic, a proxy contest, a merger involving our company, a tender offer, an
open-market purchase program or other purchases of our common stock that could
give our stockholders the opportunity to realize a premium over the then-
prevailing market price of their shares of common stock. See "Transactions and
Relationships with Principal Stockholders."

We may need to obtain future capital

We expect that the money generated from this offering, combined with our
current cash resources, will be sufficient to meet our requirements for
approximately 24 months. However, we may need to raise additional financing to
support expansion, develop new or enhanced applications and services, respond
to competitive pressures, acquire complementary businesses or technologies or
take advantage of unanticipated opportunities. We may need to raise additional
funds by selling debt or equity securities, by entering into strategic
relationships or through other arrangements. However, there can be no assurance
that we will be able to raise any additional amounts on reasonable terms, or at
all, when they are needed.

Future sales of shares of our common stock could affect our stock price

Prior to this offering, there has been no public market for our common
stock. No information is currently available and no prediction can be made as
to the timing or amount of future sales of shares, or the effect, if any, that
market sales of shares or the availability of shares for sale will have on the
market price prevailing from time to time. Nevertheless, sales of substantial
amounts of our common stock, including shares issuable upon exercise of stock
options or warrants, in the public market after the lapse of the legal and
contractual restrictions, including lock-up agreements, described below, or the
perception that such sales may occur, could materially and adversely affect the
prevailing market prices for our common stock and our ability to raise equity
capital in the future. See "Shares Eligible for Future Sale."

As a result of legal and contractual restrictions as described under the
caption "Shares Eligible for Future Sale," additional shares will be available
for sale in the public market as follows:

. no shares of common stock, other than those sold hereby and not
held by affiliates, will be available for immediate sale in the
public market on the date of this prospectus,

. any shares of common stock sold hereby and purchased by affiliates
will be eligible for sale 90 days after the date of this
prospectus, subject to the volume, manner of sale and reporting
requirements of Rule 144,

15
<PAGE>

. 50,062,500 shares of our common stock held by Synetic, excluding
shares of our common stock purchased in connection with our
acquisition of Med-Link, will be eligible for sale upon expiration
of the lock-up agreements 180 days after the date of this
prospectus, subject to the volume, manner of sale and reporting
requirements of Rule 144,

. 12,437,500 shares of our common stock acquired by Cerner prior to
this offering, excluding shares of our common stock purchased in
connection with our acquisition of Med-Link, will be eligible for
sale, subject to the volume, manner of sale and reporting
requirements of Rule 144, after January 2, 2000. These shares may
also be sold pursuant to Cerner's registration rights after
January 2, 2001, if not previously sold pursuant to Rule 144 or
another exemption from registration under the Securities Act,

. approximately 645,000 shares of our common stock to be purchased
by Cerner in the private transaction concurrently with this
offering will be eligible for sale one year after the date of this
prospectus, subject to the volume, manner of sale and reporting
requirements of Rule 144, and

. 875,000 shares of our common stock purchased by Synetic and Cerner
in connection with our acquisition of Med-Link will be eligible
for sale after May 23, 2000, subject to the volume, manner of sale
and reporting requirements of Rule 144.

In addition, THINC and Cerner own warrants exercisable for an aggregate
of 5,067,563 shares of our common stock, which warrants cannot be exercised
until 180 days after the completion of this offering. We will also issue to
Cerner 2,503,125 shares of our common stock on or after February 15, 2001 at a
price of $.01 per share if we realize specified levels of physician usage of
our services.

Although we have agreed, in connection with this offering and subject to
certain exceptions, not to sell or otherwise dispose of any shares of our
common stock or other securities that can be converted into or exchanged for
shares of our common stock during the 180-day period after the date of this
prospectus without the prior written consent of Merrill Lynch, we may issue and
file a registration statement with respect to shares of our common stock at any
time in connection with investments in, acquisitions of, or mergers,
combinations or other strategic relationships with, other companies. See
"Underwriting."

We plan to file a registration statement to register 7,500,000 shares of
common stock reserved for issuance under our stock option plans. See
"Management -- Compensation Pursuant to Plans and Arrangements of the
Company -- Stock Option Plans." Once registered, persons acquiring such shares
upon exercise of their options, whether or not they are affiliates, will be
permitted to resell their shares in the public market without regard to the
Rule 144 holding period.

There has been no public market for our common stock

Prior to this offering, there has been no public market for our common
stock. We have filed an application to list the common stock for trading on the
Nasdaq National Market System. We do not know the extent to which investor
interest in our company will lead to the development of a trading market for
the common stock or how the common stock will trade in the future. Our company
and the underwriters will negotiate to determine the initial public offering
price. You may not be able to resell your shares at or above the initial public
offering price due to a number of factors, including:

. actual or anticipated quarterly variations in our operating
results;

. changes in expectations as to our future financial performance or
changes in financial estimates, if any, of securities analysts;

. announcements of new products or services or technological
innovations;

16
<PAGE>

. announcements relating to strategic relationships;

. customer relationship developments;

. conditions generally affecting the Internet or healthcare
industries;

. success of our operating strategy;

. competition from healthcare information software vendors,
healthcare electronic data interchange network companies,
nationwide and regional providers of information technology
consulting services and new technology; and

. the operating and stock price performance of other comparable
companies.

The price for our common stock may be volatile

The stock market recently has experienced significant volatility that
often has been unrelated or disproportionate to the operating performance of
particular companies. These broad market and industry fluctuations may
adversely affect the trading price of our common stock, regardless of our
actual operating performance.

You will suffer substantial dilution and our current stockholders will benefit
from this offering

New investors in this offering will experience an immediate and
substantial dilution of $13.61 per share, assuming an initial public offering
price of $15.00 per share and the concurrent private sale of an estimated
645,000 shares of our common stock to Cerner at a price of $15.00 per share,
less the underwriting discount. This offering will also create a public market
for the resale of shares held by existing investors, and substantially increase
the market value of those shares. In addition, the issuance by our company of
additional securities, including common stock or securities convertible into
common stock, the exercise of warrants currently held by Cerner and THINC, or
the exercise of employee stock options or officer stock options, could result
in substantial dilution of the percentage ownership of our stockholders at the
time of any such issuance and substantial dilution of our company's earnings
per share. See "Dilution."

DISCLOSURE REGARDING FORWARD-LOOKING INFORMATION

This prospectus contains forward-looking statements relating to our
operations that are based on management's current expectations, estimates and
projections about our company, and the healthcare e-commerce industry. Words
such as "expects," "intends," "plans," "projects," "believes," "estimates,"
"anticipates" and variations of these words and similar expressions are used to
identify such forward-looking statements. These statements are not guarantees
of future performance and involve certain risks, uncertainties and assumptions
that are difficult to predict. Further, certain forward-looking statements are
based upon assumptions as to future events that may not prove to be accurate.
Therefore, actual outcomes and results may differ materially from what is
expressed or forecast in such forward-looking statements. We undertake no
obligation, and do not intend, to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
A number of important factors could cause actual results to differ materially
from those indicated by such forward-looking statements. Such factors include
those set forth in this prospectus under the heading "Risk Factors."

17
<PAGE>

USE OF PROCEEDS

We estimate the net proceeds from the sale of 5,650,000 shares of common
stock in connection with this offering will be approximately $77,817,500 based
on an assumed initial public offering price of $15.00 per share. We estimate
the net proceeds will be $89,640,125 if the underwriters' over-allotment option
is exercised in full. In addition, the net proceeds from the sale of shares of
common stock to Cerner in a separate, private transaction concurrently with
this offering will be $9,000,000. We currently intend to use the net proceeds
from this offering and the private sale to Cerner for working capital,
including financing the cost of product development and deployment, increased
sales and marketing activities, and for general corporate purposes. We may use
a portion of the net proceeds to fund, acquire or invest in complementary
businesses or technologies, although we have no present commitments with
respect to any acquisition or investment.

Pending use of the net proceeds of the offering, we intend to invest such
proceeds in U.S. government or investment-grade marketable securities.

DIVIDEND POLICY

We currently intend to retain any earnings to finance the development and
expansion of our business and do not anticipate paying any cash dividends in
the foreseeable future. Any declaration and payment of dividends would be
subject to the discretion of our board of directors. Any future determination
to pay dividends will depend on our results of operations, financial condition,
capital requirements, contractual restrictions and other factors deemed
relevant at the time by the board of directors.

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<PAGE>

CAPITALIZATION

The following table sets forth as of March 31, 1999

. the actual capitalization of our company,

. the pro forma capitalization of our company after giving effect to
the acquisition of Med-Link and the related issuance by us of 875,000
shares of our common stock to Synetic and Cerner for $14,000,000,
which we used to acquire Med-Link, and

. the pro forma as adjusted capitalization of our company after giving
effect to the receipt of the estimated net proceeds from the sale of
the 5,650,000 shares of common stock offered to the public hereby at
the assumed initial public offering price of $15.00 per share and the
concurrent sale by us of an estimated 645,000 shares of common stock
that Cerner has agreed to purchase directly from us in a separate,
private transaction.

<TABLE>
<CAPTION>
March 31, 1999 (in
thousands)
(unaudited)
------------------------------
Pro Forma
As
Actual Pro Forma Adjusted
-------- --------- ---------
<S> <C> <C> <C>
Cash and cash equivalents................... $ 5,058 $ 5,240 $ 92,058
======== ======== ========
Stockholders' equity:
Preferred Stock, $.01 par value,
30,000,000 shares authorized; none issued
and outstanding.......................... -- -- --
Common stock, $.01 par value, 300,000,000
shares authorized; 62,500,000 shares
issued and outstanding; 63,375,000 shares
issued and outstanding pro forma;
69,670,000 issued and outstanding pro
forma as adjusted (1).................... 625 634 697
Paid-in capital........................... 108,798 122,789 209,544
Deficit accumulated during the development
stage.................................... (68,173) (68,173) (68,173)
-------- -------- --------
Total stockholders' equity............... 41,250 55,250 142,068
-------- -------- --------
Total capitalization.................... $ 41,250 $ 55,250 $142,068
======== ======== ========
</TABLE>
- --------

(1) Excludes 4,000,000 shares of common stock which may be issued upon the
exercise of options outstanding on the date of this prospectus granted
pursuant to our employee stock option plan or our officer stock option plan
and an additional 3,500,000 shares of common stock reserved for issuance
pursuant to these plans. The weighted average exercise price of all options
outstanding on the date of this prospectus is the initial public offering
price per share. Also excludes an aggregate of 5,067,563 shares of common
stock which may be issued from time to time upon the exercise of the THINC
and Cerner warrants and 2,503,125 shares of common stock which will be
issued on or after February 15, 2001 to Cerner at a price of $.01 per share
if we realize a specified level of physician usage of our services. See
"Management," "Security Ownership of Management" and "Transactions and
Relationships with Principal Stockholders."

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<PAGE>

DILUTION

As of March 31, 1999, our pro forma net tangible book value was
$10,364,000 or $.16 per share. "Net tangible book value" per share represents
the amount of total tangible assets less total liabilities of our company,
divided by the total number of shares of our common stock outstanding. The pro
forma net tangible book value per share as of March 31, 1999 gives effect to
our acquisition of Med-Link and the related sale by us of 875,000 shares of our
common stock to Synetic and Cerner. After giving effect to the receipt of the
estimated net proceeds from the sale of 5,650,000 shares offered to the public
hereby at an assumed initial public offering price of $15.00 per share and from
the concurrent, private sale by us of an estimated 645,000 shares of common
stock to Cerner, our pro forma as adjusted net tangible book value as of March
31, 1999 would have been approximately $97,181,500 or $1.39 per share. This
represents an immediate increase in such pro forma net tangible book value of
$1.23 per share to the existing stockholders and an immediate dilution of
$13.61 per share to new investors. The following table illustrates this per
share dilution.

<TABLE>
<S> <C> <C>
Initial public offering price per share......................... $15.00
Pro forma net tangible book value per share before the
offering..................................................... .16
Increase per share attributable to new investors in the
offering..................................................... 1.12
Increase per share attributable to concurrent private sale of
645,000
shares of our common stock to Cerner......................... .11
Pro forma as adjusted net tangible book value per share after
the offering................................................... 1.39
------
Dilution per share to new investors............................. $13.61
</TABLE>

The following table summarizes, on the pro forma basis set forth above,
as of March 31, 1999, the relative investment of the existing stockholders, new
investors and Cerner.

<TABLE>
<CAPTION>
Total Cash
Shares Purchased Consideration
------------------ -------------------- Average Price
Number Percent Amount Percent per Share
---------- ------- ------------ ------- -------------
<S> <C> <C> <C> <C> <C>
Existing Stockholders... 63,375,000 91.0% $100,923,000 51.9% $1.59
New Investors in this
offering............... 5,650,000 8.1% 84,750,000 43.5% 15.00
Cerner in a concurrent
private transaction.... 645,000 0.9% 9,000,000 4.6% 13.95
---------- ----- ------------ -----
Total............... 69,670,000 100.0% $194,673,000 100.0%
</TABLE>

The above computations do not include 4,000,000 shares of common stock
which may be issued upon the exercise of options outstanding on the date of
this prospectus granted pursuant to our employee stock option plan or our
officer stock option plan and an additional 3,500,000 shares of common stock
reserved for issuance pursuant to these plans. The weighted average exercise
price of all options outstanding on the date of this prospectus is the initial
public offering price per share. See "Management." These computations also do
not include 5,067,563 shares of common stock that may be issued from time to
time upon the exercise of the warrants held by THINC and Cerner at a weighted
average exercise price of $4.00 per share and 2,503,125 shares of common stock
which may be issued on or after February 15, 2001 to Cerner at a price of $.01
per share if our business realizes certain performance levels.

20
<PAGE>

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
(in thousands, except share data)

The selected financial data for our company set forth below as of June
30, 1997 and June 30, 1998 and for the period from Inception (December 24,
1996) through June 30, 1997 and for the year ended June 30, 1998 have been
derived from our audited consolidated financial statements included elsewhere
in this prospectus. The selected financial data related to the statement of
operations for the predecessor business of Avicenna Systems Corporation set
forth below for the year ended December 31, 1995, for the period January 1,
1996 through December 23, 1996 and for the cumulative period from Inception
(September 20, 1994) through December 23, 1996 of Avicenna Systems Corporation
have been derived from the audited financial statements of Avicenna Systems
Corporation included elsewhere in this prospectus. The selected financial data
for the predecessor business of Avicenna Systems Corporation set forth below
for the period from Inception (September 20, 1994) through December 31, 1994
and all the balance sheet data of Avicenna Systems Corporation have been
derived from the audited financial statements of Avicenna Systems Corporation
not included in this prospectus. The selected financial data for our company as
of March 31, 1999, for the nine-month periods ended March 31, 1998 and 1999 and
for the cumulative period from Inception (December 24, 1996) through March 31,
1999 are derived from our unaudited consolidated financial statements which, in
the opinion of our management, include all normal and recurring adjustments
necessary to present fairly the financial position and the results of
operations of our company for those periods. The operating results for the nine
months ended March 31, 1999 are not necessarily indicative of the operating
results to be expected for the full year. The selected financial data presented
below should be read in conjunction with the financial statements and notes
thereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" for both our company and the predecessor business of
Avicenna Systems Corporation included elsewhere in this prospectus.

<TABLE>
<CAPTION>
Avicenna Systems Corporation
Predecessor Business CareInsite, Inc.
--------------------------------------- -----------------------------------------------------------
Period Cumulative Period Nine Cumulative
from Period from from months from
inception from inception inception ended inception
(9/20/94) Year 01/01/96 (09/20/94) (12/24/96) Year March 31, (12/24/96)
through ended through through through ended ----------------- through
12/31/94 12/31/95 12/23/96 12/23/96 06/30/97 06/30/98 1998 1999 03/31/99
--------- -------- -------- ---------- ---------- -------- ------- -------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Service revenue (related
party)................. $ -- $ -- $ 20 $ 20 $ -- $ -- $ -- $ 213 $ 213
Cost of services
(related party)........ -- -- -- -- -- -- -- 213 213
Costs & expenses
Research &
development........... 16 86 1,161 1,263 7,652 4,762 3,976 8,720(/1/) 21,134(/1/)
Sales & marketing...... 9 12 1,297 1,318 1,150 1,733 1,232 1,427 4,310
General &
administrative........ 7 69 860 936 1,379 3,887 2,589 2,944 8,210
Litigation costs....... -- -- -- -- -- -- -- 2,500(/2/) 2,500(/2/)
Other income, net...... -- -- -- -- (9) (47) (7) (110) (166)
Acquired in-process
research &
development........... -- -- -- -- 32,185(/3/) -- -- -- 32,185(/3/)
------ ------ ------- ------- -------- -------- ------- -------- --------
Total costs &
expenses............ 32 167 3,318 3,517 42,357 10,335 7,790 15,694 68,386
------ ------ ------- ------- -------- -------- ------- -------- --------
Net loss................ $ (32) $ (167) $(3,298) $(3,497) $(42,357) $(10,335) $(7,790) $(15,481) $(68,173)
Preferred stock
dividends.............. -- -- (241) (241) -- -- -- -- --
Net loss applicable to
common stockholders.... $ (32) $ (167) $(3,539) $(3,738) $(42,357) $(10,335) $(7,790) $(15,481) $(68,173)
====== ====== ======= ======= ======== ======== ======= ======== ========
Basic and diluted net
loss per share
applicable to common
stockholders........... $(0.08) $(0.44) $ (9.34) $ (9.86) $ (0.85) $ (0.21) $ (0.16) $ (0.29) $ (1.33)
Weighted average shares
outstanding
(basic & diluted)...... 379 379 379 379 50,063 50,063 50,063 54,208 51,444
</TABLE>

(Footnotes on following page)

21
<PAGE>

<TABLE>
<CAPTION>
Avicenna Systems Corporation
Predecessor Business CareInsite, Inc.
--------------------------------- ------------------------------
12/31/94 12/31/95 12/23/96 06/30/97 06/30/98 03/31/99
--------- --------- ---------- -------- -------- -----------
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Working capital (defi-
cit)................... $ (32) $ 998 $ (1,257) $(1,592) $ 775 $ 4,342
Total assets............ -- 1,201 1,263 3,476 10,833 43,935
Stockholders' equity
(deficit).............. (32) (206) (3,744) 1,566 7,798 41,250
</TABLE>
- --------

22
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our financial
statements and notes thereto. The following discussion contains forward-looking
statements that reflect our plans, estimates and beliefs. Our actual results
could differ materially from those discussed in forward-looking statements. See
"Risk Factors."

Overview

Our healthcare e-commerce services are still under development and no
revenues have been generated from the sale of these services. Additionally, the
market for our products and services is unproven. These factors make it
difficult to evaluate our business and prospects. We have incurred substantial
operating losses since our inception and there can be no assurance that we will
generate significant revenues or profitability in the future. We intend to
significantly increase our expenditures primarily in the areas of development,
sales and marketing, data center operations and customer support. As a result,
we expect to incur substantial operating losses for at least the next two
fiscal years.

We expect to generate a significant portion of our revenue from payers
and suppliers who are expected to pay initial set-up and ongoing maintenance
fees associated with organizing, loading and maintaining their content,
transaction fees for the transmission of payer content to physicians and
transaction fees for lab orders/results and prescription routing. We also
expect to generate revenue from physicians who are expected to pay a monthly
fee for access to a range of our services.

We believe that management has a unique understanding of the economic
leverage inherent in facilitating the automation of certain clinical,
administrative and financial processes. Accordingly, our company also has
contracted with certain payers and in the future may contract with other payers
and suppliers to guarantee them incremental cost savings from the use of
certain of our services. If any of these payers or suppliers do not realize the
guaranteed level of cost savings, we will be obligated to make a payment to
that payer or supplier, which payment may exceed our charges to that payer or
supplier. In some cases, we intend to share in any cost savings in excess of
the guaranteed cost savings. The amount and timing of transaction revenue
generated under these arrangements may be impacted by our guarantee of cost
savings.

On December 24, 1996, Synetic acquired Avicenna Systems Corporation, a
privately held company that marketed and built Intranets for managed healthcare
plans, integrated healthcare delivery systems and hospitals. The acquisition of
Avicenna marked the inception of Synetic's healthcare electronic commerce
business. On January 23, 1997 Synetic acquired CareAgents, Inc., a privately
held company engaged in developing Internet-based clinical commerce
applications. On November 24, 1998, Synetic formed CareInsite, Inc. (formerly
Synetic Healthcare Communications, Inc.). On January 2, 1999, Synetic
contributed the stock of CareAgents to Avicenna. Concurrently, Avicenna
contributed the stock of CareAgents and substantially all of Avicenna's other
assets and liabilities to our company. Synetic continues to hold its interest
in our company through Avicenna. Synetic has also contributed $10,000,000 in
cash to our company. The transactions resulting in our formation have been
accounted for using the carryover basis of accounting and our company's
financial statements include the accounts and operations of Avicenna and
CareAgents for all periods presented from the date each entity was acquired. In
October, 1998, we entered into agreements in principle with THINC and Cerner.
Definitive agreements with THINC and Cerner were entered into in January 1999.

Effect of Recent Transactions

In January 1999, our company, THINC, and THINC's founding members,
Greater New York Hospital Association, Empire Blue Cross and Blue Shield, Group
Health Incorporated and HIP Health Plans entered into definitive agreements and
consummated a transaction for a broad strategic alliance. Under this
arrangement, among other things, our company:

23
<PAGE>

. acquired a 20% ownership interest in THINC in exchange for
$1,500,000 in cash and a warrant to purchase an aggregate of
4,059,118 shares of common stock of our company at an exercise
price of $4.00 per share, referred to as the THINC warrant;

. agreed to extend up to $2,000,000 and $1,500,000 in senior loans
to THINC;

. entered into a Management Services Agreement with THINC pursuant
to which our company will manage all operations of THINC,
including, as part of our services, providing THINC with certain
content and messaging services, and THINC will provide our company
with the right to deploy our prescription and laboratory
communication services on the THINC network on behalf of the
payers;

. licensed to THINC our content and messaging services for use over
the THINC network; and

. entered into Clinical Transaction Agreements with each of Empire,
Group Health Incorporated and HIP, who we refer to together as the
"THINC Payers," to provide online prescription and laboratory
communication services.

The estimated fair value of the THINC warrant at the date issued was
approximately $1,700,000, as determined using the Black-Scholes option pricing
model. We will account for our investment in THINC using the equity method of
accounting. For the twelve months ended December 31, 1998, THINC incurred a net
loss of approximately $4,837,000. We anticipate that THINC will continue to
incur losses over the next eighteen months. The carrying value of our
investment in THINC exceeds our pro rata share of the net assets of THINC. This
excess of $2,880,000 will be amortized over a ten-year period.

In January 1999, our company also entered into definitive agreements and
consummated a transaction with Cerner for a broad strategic alliance. Under
this arrangement, our company, among other things, obtained a perpetual,
royalty-free license to certain Cerner technology in exchange for a 19.9%
equity interest in our company. Such equity interest is subject to certain
restrictions on transfer and other adjustments. In addition, we have issued to
Cerner a warrant to purchase up to 1,008,445 shares of common stock at
$4.00 per share, exercisable only in the event THINC exercises its warrant.
Also, we will issue to Cerner 2,503,125 shares of our common stock on or after
February 15, 2001 at a price of $.01 per share if we realize a specified level
of physician usage of our services. The software acquired from Cerner was
valued at approximately $20,800,000 based on the value of the equity
consideration as determined using an income approach valuation methodology. In
connection with our strategic relationship with Cerner, we sold Cerner a
beneficial interest to 2% of THINC. As beneficial owner, Cerner will receive
any dividends, income and liquidation or disposition proceeds related to their
2% interest. However, we will remain the owner of record, will exercise voting
rights and will have the right to sell, transfer, exchange, encumber or
otherwise dispose of this 2% interest in THINC. Additionally, Cerner has agreed
to fund $1,000,000 of our $2,000,000 senior loan to THINC. We have also entered
into a marketing agreement with Cerner that allows for the marketing and
distribution of our services to the physicians and providers associated with
more than 1,000 healthcare organizations who currently utilize Cerner's
clinical and management information system. In addition, Cerner committed to
make available engineering and systems architecture personnel and expertise to
accelerate the deployment of our services, as well as ongoing technical support
and future enhancements to the Cerner technology.

On May 24, 1999, we completed the acquisition of Med-Link, a provider of
electronic data interchange services based in Somerset, New Jersey. Med-Link
had net sales of approximately $3,076,000 and a net loss of approximately
$1,876,000 for the twelve months ended December 31, 1998. The purchase price
for the outstanding capital stock of Med-Link was $14,000,000 in cash. The
acquisition was funded through the sale of 875,000 shares of our common stock
at a price of $16.00 per share for total proceeds of $14,000,000. Of these
875,000 shares sold, Synetic purchased 700,875 shares and Cerner purchased
174,125 shares. The acquisition will be accounted for using the purchase method
of accounting.

24
<PAGE>

Results of Operations -- CareInsite

Nine Months Ended March 31, 1999 Compared to Nine Months Ended March 31, 1998

Service revenue (related party) of $213,000 consisted of management
services which we provided to THINC pursuant to the CareInsite/THINC operating
agreement effective in January 1999.

Cost of services (related party) of $213,000 consisted primarily of
employee compensation and benefits expense for those employees directly
supporting the THINC business.

Research and development expenses consist primarily of employee
compensation, the cost of consultants and other direct expenses incurred in the
development of our product. These expenses were $8,720,000 for the nine months
ended March 31, 1999 and $3,976,000 for the nine months ended March 31, 1998.
Research and development expenses for the nine months ended March 31, 1999
include a $2,381,000 write-off of capitalized software costs which relate to
the abandonment of our development efforts with respect to certain of our
products and services. Those efforts were abandoned as a result of encountering
a high risk development issue associated with integrating those products and
services with the acquired Cerner technology. Excluding this write-off of
capitalized software, total expenditures for research and development,
including amounts capitalized, were $14,108,000 for the nine months ended March
31, 1999 and $6,516,000 for the nine months ended March 31, 1998. The increase
in total expenditures was related to the purchase of third party licenses, as
well as increases in development personnel and outside consultants. Of the
total expenditures, $7,769,000 was capitalized during the nine months ended
March 31, 1999 and $2,540,000 was capitalized during the nine months ended
March 31, 1998. Our policy is to capitalize software development costs once
technological feasibility has been established.

Sales and marketing expenses consist primarily of salaries and benefits,
travel for sales, marketing and business development personnel, and promotion
related expenses such as advertising, marketing materials, and tradeshows.
Sales and marketing expenses were $1,427,000 for the nine months ended March
31, 1999 and $1,232,000 for the nine months ended March 31, 1998. The increase
reflects the addition of payer oriented marketing staff partially offset by the
elimination of the remaining advertising and Intranet sales and marketing
personnel. Included in sales and marketing expenses are charges from Synetic of
$494,000 for the nine months ended March 31, 1999 and $422,000 for the nine
months ended March 31, 1998. These charges represent an allocation of
compensation costs for Synetic's personnel who devote a majority of their time
to our company, and primarily relate to business development and marketing
support services.

General and administrative expenses consist primarily of compensation for
legal, finance, management and administrative personnel. General and
administrative expenses were $2,944,000 for the nine months ended March 31,
1999 and $2,589,000 for the nine months ended March 31, 1998. The increase in
general and administrative expenses of $355,000 resulted primarily from
increased costs associated with supporting the growth in our research and
development efforts. Included in general and administrative expenses are
charges from Synetic of $253,000 for the nine months ended March 31, 1999 and
$141,000 for the nine months ended March 31, 1998. These charges represent an
allocation of compensation costs for Synetic's personnel who devote a majority
of their time to our company, and primarily relate to administrative and legal
services. The increase in these allocated expenses is due to increased staffing
to support our business. We expect to hire additional personnel and incur
additional costs related to becoming a public company. Accordingly, we intend
to increase the absolute dollar level of general and administrative expenses in
future periods.

We recorded $2,500,000 in litigation charges for the nine months ended
March 31, 1999, related to our ongoing defense against assertions that we
violated certain agreements with Merck & Co., Inc. and Merck-Medco Managed
Care, L.L.C. See "Risk Factors -- Litigation by Merck & Co., Inc., and Merck-
Medco Managed Care, L.L.C. against our company."

25
<PAGE>

Year Ended June 30, 1998 Compared to Period from Inception (December 24, 1996)
Through June 30, 1997

Research and development expenses were $4,762,000 for the year ended June
30, 1998 and $7,652,000 and for the period from inception (December 24, 1996)
through June 30, 1997. Total expenditures for research and development,
including amounts capitalized, were $9,386,000 for the year ended June 30, 1998
and $8,000,000 and for the period from inception (December 24, 1996) through
June 30, 1997. The increase in total expenditures was primarily due to the
longer fiscal period and a significant increase in research and development
personnel. This increase was partially offset by the write-off of $5,228,000 in
costs associated with the acquisitions of rights to certain intellectual
property and software technologies in the period from Inception (December 24,
1996) through June 30, 1997 for which there was no comparable write-off for the
year ended June 30, 1998. This write-off primarily related to payments for a
royalty-free perpetual license for pharmacy -- and prescription -- related
software applications, together with the supporting documentation. We licensed
these assets for use in developing certain components of our computer
applications. As we had not established the technological feasibility of our
applications prior to the date the license was acquired, and there was no
alternative future use of the licensed technology, the entire cost was charged
to research and development expense. Research and development costs capitalized
for the year ended June 30, 1998 and for the period from inception (December
24, 1996) through June 30, 1997 were $4,624,000 and $348,000, respectively.

Sales and marketing expenses were $1,733,000 for the year ended June 30,
1998 and $1,150,000 for the period from inception (December 24, 1996) through
June 30, 1997. The increase reflects the impact of the longer fiscal period
partially offset by a reduction in advertising and Intranet sales and marketing
personnel. This reduction is reflective of our change in the business model
from the development of Intranets and the generation of advertising revenue
from pharmaceutical and medical device manufacturers who advertise on these
Intranets to our focus on clinical e-commerce. Included in sales and marketing
expenses are charges from Synetic of $575,000 for the year ended June 30, 1998
and $206,000 for the period from inception (December 24, 1996) through June 30,
1997. These charges represent an allocation of compensation costs for personnel
who devote a majority of their time to our company, and primarily relate to
business development and marketing support services. The increase in these
allocated expenses is primarily due to the longer fiscal period and to a lesser
extent, increased staffing to support our business.

General and administrative expenses were $3,887,000 for the year ended
June 30, 1998 and $1,379,000 for the period from inception (December 24, 1996)
through June 30, 1997, respectively. The increase in general and administrative
expenses of $2,508,000 resulted primarily from the longer fiscal period and
increased occupancy costs. Included in general and administrative expenses are
charges from Synetic of $261,000 for the year ended June 30, 1998 and $24,000
for the period from inception (December 24, 1996) through June 30, 1997. These
charges represent an allocation of compensation costs for personnel who devote
a majority of their time to our company, and primarily relate to administrative
and legal services. The increase in these allocated expenses is primarily due
to the longer fiscal period and, to a lesser extent, increased staffing to
support our business.

Purchased research and development for the period from inception
(December 24, 1996) through June 30, 1997 was $32,185,000. This relates to the
write-off of the portion of the purchase price allocated to acquired in-process
research and development for the Avicenna and Care Agents acquisitions.

Results of Operations -- Avicenna (predecessor business)

Period from January 1, 1996 through December 23, 1996 Compared to Year Ended
December 31, 1995

Research and development expenses were $1,161,000 for the period from
January 1, 1996 through December 23, 1996 and $86,000 for the year ended
December 31, 1995. The increase in total expenditures was primarily due to a
significant increase in the number of research and development personnel
resulting in increased compensation, benefits, recruitment and other personnel
related expenses.

26
<PAGE>

Sales and marketing expenses were $1,297,000 for the period from January
1, 1996 through December 23, 1996 and $12,000 for the year ended December 31,
1995. The increase is due to the increase in staffing along with deploying
marketing programs, advertising and travel relating to the Intranet sales
business.

General and administrative expenses were $860,000 for the period from
January 1, 1996 through December 23, 1996 and $69,000 for the year ended
December 31, 1995. Most of the increase in expenditures was due to additional
general and administrative personnel working in legal, finance and
administrative functions. Additional cost increases include consulting, public
relations, rent, and depreciation.

Acquired In-Process Research and Development -- CareInsite

In connection with the acquisitions of Avicenna and CareAgents, we
allocated a portion of each purchase price to acquired in-process research and
development. The amount allocated to acquired in-process research and
development for each of these acquisitions was determined based on an income
approach valuation methodology. For both Avicenna and CareAgents a nine year
forecast of revenues and costs attributable to the acquired technology was
prepared. The nine year projection period was consistent with the expected
useful lives of the technology under development. The resulting operating cash
flows were then reduced by working capital and capital expenditures and
discounted to present value based on a discount rate of 30% for Avicenna and
50% for CareAgents. These different discount rates were used because, at the
time of acquisition, Avicenna had commenced operations, had more than 30
employees and had received financing. In contrast, CareAgents, at the time of
acquisition, had not commenced operations, had no employees other than its
stockholders, and had not received any financing. These amounts have been
expensed on the respective acquisition dates as the in-process research and
development had not reached technological feasibility and had no alternative
future use. A description of the acquired in-process research and development
and the estimates made by us is set forth below.

Avicenna. Avicenna's business plan was to design and market Intranets to
provider organizations to provide communication and reference capabilities to
these organizations. Doctors in these organizations would communicate via e-
mail and forum groups with centralized medical reference information with the
objective of reducing costs in a managed care environment. The fundamental
technology plan was to develop a client/server based application to allow
hospital affiliated doctors to access a local Intranet that housed medical
reference information, in-house policies and procedures, and communication
among the various parties. This required development of electronic search,
medical reference material storage and communication capabilities such as
forums and e-mail. The revenue model had been, prior to acquisition, primarily
one based on pharmaceutical and medical device manufacturer's advertising fees
on these Intranets. Avicenna also envisioned creating a search capability that
would allow doctors to quickly access relevant reference information on a
variety of medical topics from databases that were licensed to Avicenna. These
databases would be customized in format by Avicenna.

As of the acquisition date, Avicenna was in the early stages of its
development and the systems under development had not yet reached technological
feasibility. There was a working public Intranet site and they had begun to
implement the search techniques. Their primary mechanism to allow users to
search their Intranet sites and access content provided by hospitals,
advertisers, and others was to develop a method of customizing that content via
a software utility known as "Framework." Framework was in the initial stage of
development with the substantive system design, coding, and testing work
remaining incomplete. Framework was the fundamental piece of code that would
enable users to be able to both search and reference the content contained on
an Avicenna Intranet and thereby realize their business model.

As of the December 24, 1996 acquisition date, Avicenna had incurred
approximately $1,263,000 in research and development costs to develop the
technology to its status described above. It was estimated that over $3,000,000
of costs remained to complete the projects described above in the following
calendar year and that additional significant costs remained in subsequent
years to further enhance and maintain the capabilities of

27
<PAGE>

the Avicenna system. Subsequent to the date of acquisition, we have modified
the acquired technology from both Avicenna and CareAgents and incorporated them
into a broader system, the CareInsite system.

CareAgents. CareAgents' business plan was to design and market Internet
based clinical commerce applications that allowed the various healthcare
participants to exchange information and conduct basic medical transactions
with each other. Participants included patients, providers, and suppliers. The
fundamental technology plan was to create an Internet and standards based
connection between the participants and then provide specific transaction
capabilities using both internally and externally developed application
software.

CareAgents' technology was in the very early stages of development with
basic user requirements, a business plan, preliminary system architecture with
process flow diagrams and prototyping efforts comprising the work completed to
date. In excess of $8,000,000 in costs remained over the next two years to
mature the technology to the point of technological feasibility and then
complete for first product deployment. No work had been completed on a detailed
engineering design or on building or testing any substantive code.

Liquidity and Capital Resources -- CareInsite

Our operations since Inception (December 24, 1996) have been funded
through capital contributions from Synetic. As of March 31, 1999, we had
$5,058,000 of cash and cash equivalents.

Cash used in operating activities was $12,447,000 for the nine months
ended March 31, 1999, $9,052,000 for the year ended June 30, 1998 and
$5,011,000 for the period from Inception (December 24, 1996) through June 30,
1997. The cash used during this period was primarily attributable to the losses
associated with the development of our business activities.

Cash used in investing activities was $9,243,000 for the nine months
ended March 31, 1999, $6,721,000 for the year ended June 30, 1998 and
$1,371,000 for the period from Inception (December 24, 1996) through June 30,
1997 and related primarily to capital expenditures.

Cash provided by financing activities was $26,433,000 for the nine months
ended March 31, 1999, $15,842,000 for the year ended June 30, 1998 and
$6,628,000 for the period from Inception (December 24, 1996) through June 30,
1997. Such amounts represent capital contributions made by Synetic.

In addition, pursuant to our strategic relationship with THINC, we have
committed to extend up to $2,000,000 and $1,500,000 in senior loans to THINC.
In connection with our strategic relationship with Cerner, Cerner has agreed to
fund $1,000,000 of our $2,000,000 loan to THINC. See "Transactions and
Relationships with Principal Stockholders."

In addition, Cerner has agreed to purchase directly from us approximately
645,000 shares of our common stock in a separate private transaction concurrent
with this offering. The net proceeds from the sale of shares of common stock to
Cerner in such transaction will be $9,000,000. See "Transactions and
Relationships with Principal Stockholders -- Cerner."

On May 24, 1999, we completed the acquisition of Med-Link for $14,000,000
in cash. The acquisition was funded through the sale of 875,000 shares of our
common stock at a price of $16.00 per share for total proceeds of $14,000,000.
Of these 875,000 shares, Synetic purchased 700,875 shares and Cerner purchased
174,125 shares.

Cash used in operating activities by Med-Link for the twelve months ended
December 31, 1998 was approximately $1,008,000 which was funded by its parent.

28
<PAGE>

We currently anticipate that the net proceeds from the offering and
proceeds from the sale of shares to Cerner in a concurrent private transaction,
together with our available cash resources, will be sufficient to meet our
presently anticipated working capital, capital expenditure and business
expansion requirements, including the requirements of Med-Link, for
approximately the next 24 months. There can be no assurance we will not require
additional capital prior to the expiration of an 24-month period. Even if such
additional funds are not required, we may seek additional equity or debt
financing. We cannot assure you that such financing will be available on
acceptable terms, if at all, or that such financing will not be dilutive to our
stockholders.

Year 2000 -- CareInsite

Many currently installed computer systems and software products are coded
to accept or recognize only two digit entries for the year in the date code
field. These systems and software products will need to accept four digit year
entries to distinguish 21st century dates from 20th century dates. As a result,
computer systems and/or software used by many companies and governmental
agencies may need to be upgraded to comply with such Year 2000 requirements or
risk system failure or miscalculations causing disruptions of normal business
activities.

State of Readiness. We have made a preliminary assessment of the Year
2000 readiness of our information technology systems, including the hardware
and software that enable us to develop and deliver our healthcare e-commerce
services as well as our non-information technology systems. Our assessment plan
consists of:

. quality assurance testing of our internally developed proprietary
software;

. contacting third-party vendors and licensors of material hardware,
software and services that are both directly and indirectly
related to developing our healthcare e-commerce network;

. contacting vendors of material non-IT systems;

. assessment of repair or replacement requirements;

. repair or replacement; and

. implementation.

We have been informed by our vendors of material hardware and software
components of our IT systems that the products used by us are currently Year
2000 compliant. We have also been informed by our non-IT system vendors that
the products used by us are currently Year 2000 compliant.

Costs. To date, we have not incurred any material expenditures in
connection with identifying or evaluating Year 2000 compliance issues. Most of
our expenses have related to, and are expected to continue to relate to, the
operating costs associated with time spent developing a Year 2000 compliant
healthcare e-commerce channel.

29
<PAGE>

Contingency plan. We are continuing to assess and test our systems for
Year 2000 compliance. We have also developed contingency plans for system
failure, service disruption and data corruption issues due to Year 2000
problems. In the event that there is a system problem due to a Year 2000 date,
we will immediately attempt to diagnose and fix the problems. At the same time,
we will change (a) the system clock back to 1999 while separately logging all
transactions so affected and/or (b) the dates within transactions to 1999 while
separately logging all transactions so affected. In the event that a Year 2000
problem occurs at an external entity, that entity will be informed of the
problem and we will continue to review and repair the dates until the problem
is fixed. We cannot assure you that we will be able to successfully diagnose
and/or fix any Year 2000 problems that occur or that the cost of doing so will
not be material.

Recent Accounting Pronouncements

In June 1997, the Financial Accounting Standards Board, or "FASB," issued
Statement of Financial Accounting Standards, or "SFAS," No. 131, "Disclosures
about Segments of an Enterprise and Related Information." We are required to
adopt SFAS No. 131 for the year ending June 30, 1999. SFAS No. 131 requires
disclosure of certain information regarding operating segments, products and
services, geographic areas of operation and major customers. Adoption of SFAS
No. 131 is expected to have no material impact on our financial condition or
results of operations.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." We are required to adopt SFAS No. 133 for
the year ending June 30, 2000. SFAS No. 133 establishes methods of accounting
for derivative financial instruments and hedging activities related to those
instruments as well as other hedging activities. Because we currently hold no
derivative financial instruments and do not currently engage in hedging
activities, adoption of SFAS No. 133 is expected to have no material impact on
our financial condition or results of operations.

In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position, or "SOP," 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." SOP 98-1 requires
that entities capitalize certain costs related to internal-use software once
certain criteria have been met. We are required to implement SOP 98-1 for the
year ending June 30, 2000. Adoption of SOP 98-1 is expected to have no material
impact on our financial condition or results of operations.

In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position, or "SOP," 98-5, "Reporting on the Costs of Start-
Up Activities." SOP 98-5 requires that entities expense start-up costs as
incurred. We are required to implement SOP 98-5 for the year ending June 30,
2000. Adoption of SOP 98-5 is expected to have no material impact on our
financial condition or results of operations.

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BUSINESS

We are developing and intend to provide an Internet-based healthcare
electronic commerce network for interactive use by physicians, payers,
suppliers and patients. We intend to market a comprehensive set of transaction,
messaging and content services to physicians, to payers such as managed care
organizations and pharmacy benefit managers, or PBMs, to suppliers such as
pharmacies and clinical laboratories, and to patients. Physicians will be able
to use a web browser to access relevant clinical, administrative and financial
information of payers and suppliers through our CareInsite system to make more
informed decisions at the point of care. We believe our integration of payer-
specific rules and healthcare guidelines with patient-specific information at
the point of care will improve the quality of patient care, lead to more
appropriate use of healthcare resources, gain compliance with benefit plan
guidelines and control healthcare costs.

We currently provide services to The Health Information Network
Connection LLC, referred to as THINC, an entity founded in 1996 by several
major managed care organizations in the New York metropolitan area to
facilitate the confidential exchange of healthcare information. Under our
agreement, we will manage THINC's operations and make a comprehensive suite of
healthcare e-commerce services available to the New York metropolitan area's
more than 40,000 physicians. We believe that our relationship with THINC in New
York will serve as a springboard for launching our services on a national
basis. As part of this relationship, we also acquired a 20% ownership interest
in THINC.

We have recently entered into a strategic relationship with Cerner
Corporation, a publicly traded corporation that is a leading supplier of
clinical and management information systems to more than 1,000 healthcare
organizations worldwide. Through this relationship, we have a perpetual,
royalty-free license to certain of Cerner's technology, consisting of the
clinical and administrative information technology contained in Cerner's Health
Network Architecture, including their Millennium Architecture, for use in our
CareInsite system. Cerner has agreed that CareInsite will be its exclusive
vehicle for providing a full suite of healthcare e-commerce services that
connect physicians' offices with managed care organizations, PBMs, clinical
laboratories, pharmacies and other providers. Cerner has also agreed to market
our services to its customers. In addition, Cerner has acquired a 19.9%
interest in our company.

Our parent company, Synetic, has entered into a definitive merger
agreement with Medical Manager Corporation that provides for a strategic
business combination between the two companies. Medical Manager is a leading
provider of comprehensive physician practice management systems that address
the financial, administrative and clinical practice needs of physicians. The
Medical Manager practice management systems support a physician base estimated
at more than 120,000 in more than 24,000 medical practices nationwide. Medical
Manager has a distribution network of independent and company-owned offices
with almost 2,000 sales and technical support personnel who provide service,
training and support to physician offices in major markets in the United
States.

In connection with this business combination, Medical Manager and our
company have entered into an agreement under which we will be the exclusive
provider of certain network, web hosting and transaction services to Medical
Manager. Under this agreement, which will not become effective unless the
business combination between Synetic and Medical Manager is completed, we
intend to provide our healthcare e-commerce services to Medical Manager's
physician base estimated at more than 120,000 by integrating those services
into Medical Manager's physician practice management systems. We intend to use
Medical Manager's sales and support network as a platform from which to
distribute, install and support our transaction, messaging and content services
to Medical Manager physicians.

On May 24, 1999, we acquired Med-Link for $14 million in cash. Med-Link
is a regional provider of electronic data interchange services to healthcare
providers and payers in the northeastern United States that automate their
claims and other managed care transactions. Med-Link currently processes over
12 million managed care transactions annually for approximately 12,000
physicians.

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We believe our services have several advantages over the services offered
by our competitors, several of which have services that are currently in
operation. We believe that:

. our integration of payer-specific benefit rules and healthcare
guidelines with patient-specific information at the point of care
provides a unique ability to control the costs and improve the
quality of healthcare;

. our management's experience in clinical process automation,
healthcare transaction processing and benefit management enables
us to design and implement a healthcare e-commerce network that is
responsive to the needs of physicians, payers, suppliers and
patients; and

. our CareInsite system is being built with existing, well-proven
software and system interfaces, including the licensed Cerner
technology, that can be integrated with other healthcare
information systems in an efficient and scalable manner.

Industry Background

Healthcare expenditures in the United States totaled approximately $1.0
trillion in 1996, representing a 6.7% compound annual increase since 1990.
Increases in healthcare costs have been driven principally by technological
advances in the healthcare industry and by the aging of the population, as
older Americans utilize more healthcare resources on a per capita basis. This
increasing trend in aggregate healthcare costs is expected to continue.

In the past 15 years, the U.S. healthcare industry has undergone
significant changes. Among the most significant of these changes has been a
shift away from fee-for-service indemnity plans into health maintenance
organizations, or HMOs, and other managed healthcare benefit plans. These
payers have used a variety of managed care techniques to control administrative
costs including, but not limited to, lowering reimbursement rates, shifting
costs from payers to patients, restricting coverage for services, limiting
access to a select group of providers, negotiating discounts with healthcare
providers, case management functions, and shifting the economic risk for the
delivery of care to providers through alternative reimbursement models, such as
capitation and risk pools. While these techniques have been initially helpful
in controlling healthcare costs, we believe that these techniques have over
time become less effective in reducing costs. Managed healthcare organizations
today are experiencing rising healthcare costs and we believe their ability to
reduce patient care costs, which represent approximately 85% of annual
healthcare costs in the United States, is limited.

We believe that future healthcare cost management is increasingly
dependent upon compliance with benefit plan guidelines designed to promote the
appropriate use of healthcare resources and adherence to best clinical
practices to improve the quality of care and control patient care costs. We
believe payers are unlikely to gain compliance with these guidelines and
practices without an efficient channel of communications to their affiliated
physicians. Today, electronic communication among the physician, payer and
supplier is typically limited to administrative transactions. These
communications typically occur at specified times of day, usually several hours
after medical care has been given or treatment has been prescribed. We believe
that compliance with benefit guidelines can be better achieved through
Internet-based healthcare e-commerce systems that enable real time
communication at the point of care of clinical information as well as basic
administrative and financial information.

The dramatic growth of the Internet as an important new medium to collect
and distribute information, communicate, interact and engage in commerce has
emerged as a way to overcome the historical technical barriers for connecting
the participants in the fragmented healthcare industry. These technical
barriers are diminishing as:

. universal, low-cost Internet access is replacing private networks;

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. common navigation via browser technology is replacing proprietary
desktop client software; and

. the Internet's open architecture is providing a solution for
integrating existing computer systems.

Factors Influencing Healthcare's Core Constituents

We believe the healthcare industry's core constituents -- physicians,
payers, suppliers and patients --will benefit from timely access to patient-
specific information and payer content, such as benefit rules and care
guidelines, in order to reduce the complexity of administration, increase
compliance with benefit plan guidelines, secure appropriate use of healthcare
resources and improve the quality of patient care.

Physicians. Physicians are confronted with a proliferation of health
plans, each of which has complex clinical, administrative and financial rules
and guidelines relating to matters such as eligibility for prescriptions, lab
tests, referrals and follow-up visits, scope of coverage and co-payments. These
complex rules and guidelines require administrative personnel to spend
significant time navigating the cumbersome administrative procedures of a large
number of health plans often after the medical care has been given or
prescriptions or referrals have been written. This complexity has created
demand for real-time information exchange across all patients and all payers to
streamline cumbersome and time-consuming clinical and administrative processes.

Payers. Payers, such as health maintenance organizations and pharmacy
benefit managers, are finding less incremental value in the historical levers
of managed care. In order to stem the unabated growth in healthcare costs,
managed care plans must do more than automate the administrative and financial
processes that govern the provision of services and the payment of claims.
While administrative costs account for approximately 15% of annual healthcare
expenditures, it is the cost of care itself, approximately 85% of annual
healthcare expenditures, which primarily drives the growth in healthcare
expenditures. We believe that compliance with benefit plan guidelines that
promote more efficient use of healthcare resources and adherence to best
practices will result in cost reductions and improvements in the quality of
care. Payers are seeking an efficient channel to communicate their benefit plan
rules and care guidelines to physicians at the point of care in order to
realize savings.

Suppliers. Pharmacies, clinical laboratories and other suppliers are
being forced to become increasingly efficient in managing their business as
managed care organizations have negotiated significant reductions in price and
demanded measurable improvements in quality. Pharmacies continue to incur
substantial inefficiencies in the process of managing orders with physicians
and patients. We believe that as many as ten percent of the nation's
approximately 2.8 billion annual prescriptions require telephone intervention
between the pharmacist and patient or physician. We also believe that fewer
than 20% of laboratory orders and/or results in the ambulatory care environment
are submitted or transmitted through electronic systems. Physicians have been
slow to adopt these systems because they are proprietary in nature and are
usually limited to results reporting. Consequently, clinical laboratories incur
unnecessary administrative costs associated with processing and reporting
orders and also incur significant losses related to tests for which
reimbursement is not authorized.

Patients. As the payer exerts increasing influence over plan design,
service coverage, and provider access, patients are demanding ever more
objective measures of quality and cost. This is evidenced by the unprecedented
demand for healthcare information on the Internet, confirming both the absence
of information from traditional sources, and desire for additional sources of
objective, credible and trustworthy information.

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Strategy

Our objective is to provide an Internet-based healthcare e-commerce
network for interactive use by physicians, payers, suppliers and patients in
order to control healthcare costs and improve patient care. Our relationships
with THINC and Cerner represent the initial execution of our strategy and
enhance our ability to continue and expand upon this strategy. Our strategy
includes the following elements.

Provide transaction, messaging and content services responsive to the needs of
physicians

We intend to provide physicians with transaction, messaging and content
services. These services are intended to complement the clinical work flows and
existing computer systems which characterize the physician office environment.
Our prescription, laboratory and managed care communication services respond to
the physician's need to provide patient care consistent with payer guidelines.
Specialized messaging services provide the office staff with alert and advisory
applications which facilitate patient treatment compliance, prescription
renewals and laboratory ordering results and automate time consuming paper and
telephonic processes. Content services, in the form of indexed and searchable
directories and databases, provide physicians with convenient access to payer-
specific information and general medical reference material. Together, these
services provide much needed context for informed decision making.

Our services are designed to work for all payers and suppliers, since
physician adoption requires services which work for virtually all patients. Our
strategy, by definition, is to remain "content-neutral." In other words, we do
not create our own content for physicians -- this is the role of our payers and
suppliers. Rather, we contract with payers and suppliers to transmit their
content in the form of clinical, administrative and financial guidelines over
our network and display these rules, in the form of alerts, advisories and
annotations to the physician at the point of care.

As part of our relationship with THINC, we intend to deploy on behalf of
THINC and offer to the New York Metropolitan area's 40,000 physicians, a
comprehensive suite of transaction, messaging and content services. As a result
of this relationship, physicians will have the ability to conduct nine
different prescription, laboratory and managed care transaction services that
we believe will simplify and automate their interaction with area health plans.
We also intend to offer our services nationwide to Medical Manager's physician
base estimated at more than 120,000 pursuant to our agreement with Medical
Manager.

Contract with key payers and suppliers to make patient-specific rules available
to physicians

Our marketing strategy is to contract with the managed care
organizations, pharmacy benefit managers, pharmacies and clinical laboratories
who benefit from the automation of specific clinical, administrative or
financial processes. Payers define the rules that govern the course of care
available to patients, and contract with physicians and suppliers to meet
specific cost and quality standards. Suppliers respond to physician orders,
dispensing prescriptions and conducting laboratory tests. By integrating
patient-specific information with benefit plan and supplier specific rules
through our CareInsite system at the point of care, we believe these
institutions will realize administrative and medical resource savings, improved
patient care and more appropriate resource utilization.

We have contracted with each of Empire Blue Cross and Blue Shield, Group
Health Incorporated and HIP, the payer participants in THINC, to provide our
prescription and laboratory communication services. We have also entered into
contracts with each of National Prescription Administrators (NPA) and Caremark,
Inc., pharmacy benefit managers, to provide our prescription communication
services, and with Prudential HealthCare, a payer, to provide our managed care
communication services. We are engaged in discussions with other leading payers
and suppliers with respect to our services. See "Transactions and Relationships
with Principal Stockholders -- Certain Agreements -- THINC."

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Build and deploy the CareInsite system

Our technology strategy is focused upon building and deploying the
CareInsite system, which permits the integration of patient-specific
information with payer- and other supplier-specific guidelines. The CareInsite
system is intended to:

. host or connect to multiple payer- or supplier-specific
guidelines, such as procedure level eligibility, benefit plan
coverage, formularies and order sets;

. host or connect to patient-specific profiles, such as lab results
or medication histories;

. analyze an incoming request or order versus payer- or supplier-
specific guidelines;

. transmit payer- or supplier-specific annotations, alerts and
advisories when the orders or requests are at variance with
guidelines; and

. transmit payer- or supplier-specific content and messages to
authorized healthcare participants.

We believe our perpetual, royalty-free license to the Cerner technology
will allow us to accelerate the building and deployment of our CareInsite
system. This technology is central to the CareInsite system's ability to
register and identify patients, house patient-specific information, analyze
requests, and communicate payer rules in the form of alerts, advisories and
annotation messages.

Maximize distribution to physicians with high transaction volumes

Our distribution strategy is to target the high-volume physicians who
account for the majority of transactions. We work closely with payers and
suppliers to identify these physicians. In addition, we work closely with
providers of desktop software to physicians. Our strategy is to complement,
rather than compete with, vendors who market and provide software and network
services to physicians. We intend to contract with these vendors, such as
Cerner and THINC, to gain distribution of our services. We intend also to
provide physicians with direct access to our networks, as well as indirect
access via links from other web portals. Our primary sales vehicle is our
direct sales force, which targets groups of physicians.

As part of the THINC agreement, we are responsible for maximizing
adoption of these services by the New York metropolitan area's 40,000
physicians. Each of THINC's founding payers is responsible for providing us
with a list of target physicians, and taking appropriate steps to ensure that
physicians understand and use the services. To maximize distribution, we have
entered into a marketing agreement with Greater New York Hospital Association
to market these services to its hospital members. We have entered into a
distribution agreement with Cerner for integrating our services into Cerner's
physician desktop software, and are pursuing discussions with other leading
providers of physician desktop software.

Pursue strategic relationships and acquisitions

We intend to continue to pursue opportunistic strategic relationships,
including customer/vendor agreements, joint ventures and acquisitions. We
believe that making strategic acquisitions and developing strategic industry
relationships will enhance our ability to penetrate additional markets through
new distribution channels and develop and provide additional services.

The THINC, Cerner and Medical Manager arrangements evidence our intent to
pursue strategic relationships, joint ventures, and partnerships to accelerate
growth of our network and build substantial value for physicians, payers, and
suppliers.

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Company Services

We intend to utilize the Internet to provide a broad array of browser
initiated healthcare e-commerce solutions which facilitate the confidential,
on-line exchange of healthcare information for all constituents in the
healthcare industry. Our healthcare e-commerce services include the
transaction, content and messaging services described below.

Transaction Services. Our transaction services include prescription,
laboratory and managed care communication services. Our prescription and
laboratory communication services are focused upon assisting physicians to more
efficiently support diagnoses and plan, prescribe and follow treatment,
consistent with payer guidelines. Our managed care communication services will
be focused upon automating the telephonic and paper processes physicians and
payers conduct in order to verify coverage and reimbursement, process medical
claims, and manage patient access to procedures and providers. We believe that
significant market opportunities exist for these services given the size of
such markets and the potential for improved efficiencies.

Prescription Communication Services. Our prescription communication
services, called RxInsite, are targeted to physicians, pharmacy benefit
managers, pharmacies and payers. While communication of payer and pharmacy
benefit manager rules to the pharmacy at the point of dispensing through
existing electronic data interchange networks has yielded substantial
administrative savings, payers and pharmacy benefit managers need an efficient
means to communicate their rules to physicians at the point of care in order to
further control drug expenditures and improve the quality of care. We believe
that payers and pharmacy benefit managers may realize significant savings
through greater prescribing of generic drugs, increased use of preferred
formulary drugs, and greater compliance with best clinical practices and
treatment guidelines. Since no single payer or pharmacy benefit manager
typically represents a majority of a physician's patients, these organizations
need a common network to communicate with physicians.

Our RxInsite services will provide physicians the ability to write
prescriptions in the context of patient medication histories and payer clinical
rules. As a result, they can improve patient care, reduce potentially harmful
drug interactions, lessen the number of telephone calls from payers and
pharmacies, and improve patient satisfaction. Payers and pharmacy benefit
managers who use our services may gain the ability to communicate their
patients' dispensed medication histories, drug utilization review results,
formulary and treatment guidelines to the physician through the CareInsite
system. As a result they may realize the savings and improvement in patient
care that accompany compliance with their guidelines. Pharmacies may reduce
administrative costs as prescriptions are clarified and corrected before they
are submitted to the pharmacy for dispensing.

Laboratory Communication Services. Our laboratory communications
services are targeted to physicians, payers and clinical laboratories. These
services will facilitate the electronic transmission of laboratory orders and
results between the physician and the clinical laboratory. This will enable the
physician to order diagnostic tests online from the clinical laboratory within
the context of a specific patient's lab coverage. In a managed care
environment, payers are seeking to ensure quality of patient care and to
minimize overall healthcare costs by eliminating unnecessary or redundant tests
and establishing testing protocols. Similarly, clinical laboratories, managing
deep discount and capitation contracts, are seeking to provide care as
efficiently and appropriately as possible. These services will provide payers
the ability to communicate payer-specific information and treatment guidelines
which should lead to significant reductions in test costs. Clinical
laboratories also are expected to gain the ability to obtain significant
savings through process automation of the orders and results process. Moreover,
they should be able to more effectively manage payer rules, minimize costs
under capitation contracts and reduce the incidence of overdue payments and bad
debt.

Managed Care Communication Services. Our managed care communication
services are comprised of a comprehensive set of administrative and financial
network services as described below, and are designed to

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gain authorization from payers for procedures, visits and referrals to network
physicians and providers and to facilitate reimbursements.

Claims Services. Healthcare claims are the most commonly communicated
transactions between physicians and payers today. Our claims services are
designed to allow physicians to submit claims to payers for payment, inquire as
to the status of claims previously submitted and receive electronic remittance
advice which provides payment information as well as an explanation of the
settlement of the related claim. Our claims services will reduce administrative
paperwork, resulting in savings for payers, and expedite the reimbursement
process, which are intended to result in lower average number of outstanding
accounts receivable days for physicians.

Eligibility Services. Verification as to whether services rendered to a
patient are eligible for reimbursement is the most basic of e-commerce
applications, but one which is largely provided today via telephone and fax.
Given the proliferation of managed care organizations and the increasing
complexity of their rules and guidelines, we believe that there will be an
increasing demand for timely and accurate electronic eligibility determination.
Physicians would benefit by being able to verify the terms of reimbursement
prior to providing services to the patient. Payers would benefit by being able
to eliminate the cost of processing claims and paying for claims from
ineligible patients.

Referral and Pre-Certification Authorization Services. Referral
authorization transactions facilitate physician-to-physician referrals by
providing the physician with the payer's referral rules at the point of care.
Pre-certification authorization transactions involve the determination as to
whether a patient can be pre-certified for hospitalization or in-hospital
procedures. These services will reduce the incidence of referral or pre-
certification errors, which thereby reduce unauthorized treatment.

Content Services. Our content services will provide physicians with
online access to both available medical reference material, and the private
content unique to payers. We continue to license publicly available content
resources, including medical databases and other general reference material. We
intend to contract with payers to re-purpose for publication via the CareInsite
system through the Internet their private-content, benefit plan information,
provider directories, formularies, policies and procedures, treatment
guidelines and other patient education and wellness information, and make it
available in an indexed and easily searchable format. We believe our services
will be differentiated from our competitors in our unique ability to integrate
content into our messaging and transaction applications in order to provide
physicians with the requisite context for informed decision making.

Messaging Services. Our messaging services will provide physicians with
online access to patient and payer specific inquiries, alerts and advisories as
well as e-mail and broadcast message applications. Messaging applications
facilitate communication between physician, payer, supplier and patient. In
particular, messaging applications are intended to simplify time consuming
processes for the physicians' staff. Prescription messaging applications
include prescription renewal and interchange programs which automate telephonic
processes between patient, physician and pharmacy. Laboratory messaging
programs will provide the ability to not only view results, but also order
subsequent tests as suggested by payer rules and treatment guidelines. We
believe our services will be differentiated from our competitors in our unique
ability to integrate messaging into our transaction applications.

Sales and Marketing

Our sales and marketing efforts will be focused upon four target
audiences:

. payers, including pharmacy benefits managers,

. suppliers, including clinical laboratories and pharmacies,

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. physicians, including physician practice management groups, and

. business development partners, including physician software and
network service vendors.

Our key objectives are to maximize the number of physicians registered to use
the service, maximize the number of patient lives covered by participating
payers and pharmacy benefit managers, and maximize the number of participating
suppliers. We will market our services through multiple channels, including
building on our model in the greater New York area, working closely with payer
and supplier customers to maximize physician enrollment, working with physician
office management information systems and hospital information systems vendors
and electronic data interchange networks and through strategic relationships.

Once contracts are in place, our customer service strategies are
essential to our ability to maximize physician use of our services and minimize
payer and supplier attrition. We expect to provide toll free telephone support
to physician and physician office staff members seven days a week, 24 hours per
day. We intend to provide online resources and help functions which should
facilitate solutions to most frequently asked questions. In addition to our
customer service center, we intend to provide account management services to
our payer, supplier and distribution partners. These personnel provide
implementation support to customers, and provide an ongoing channel of
communication between our company and our customers to ensure that our services
consistently meet customer needs.

Physicians. We will market our services to physicians in several ways.
Employing the target data from payer and supplier customers, we intend to
employ a direct sales force to contract with large groups of physicians. In
addition, we intend to adopt a strategy of complementing, rather than competing
with traditional providers of desktop software and network services to
physicians, by pursuing marketing relationships with those vendors.

Payers. We will contract with payers to maximize the number of patient
lives accessible by participating physicians. We also intend to work closely
with payers to maximize physician enrollment. Together, we will seek to
identify groups of high volume physicians that represent the majority of
potential transactions. In addition, we will work closely with payers to
maximize physician adoption of these services.

Suppliers. We will contract with clinical laboratories and pharmacies
which represent the bulk of transaction volume on a local and national basis.
We also intend to work closely with payer customers to identify and contract
with the preferred clinical laboratories and pharmacies that comprise their
managed care networks. In turn, we will work with these suppliers to maximize
physician enrollment by identifying those physicians which represent the
majority of their prescription and laboratory transactions.

Relationship with THINC. We have entered into definitive agreements for a
broad strategic alliance in January 1999 with THINC, and its founding members,
Greater New York Hospital Association, Empire Blue Cross and Blue Shield, Group
Health Incorporated, and HIP Health Plans. Under this arrangement, among other
things, we will manage the operations of THINC, including all aspects of
marketing and sales, implementation, customer service and technical operations.
In addition, THINC will provide managed care transaction services on behalf of
Empire, Group Health Incorporated and HIP, including online medical claims
submission, status, remittance advice, eligibility, referral and pre-
certification authorizations. We have also licensed to THINC our content and
messaging services for use over the THINC network, and have entered into
agreements with each of Empire, Group Health Incorporated and HIP to provide
online prescription and laboratory communication services. See "Transactions
and Relationships with Principal Stockholders -- Certain Agreements -- THINC."

As part of our management services agreement with THINC, we are committed
to marketing these services to all other payers and suppliers in the New York
metropolitan area.

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Relationship with Medical Manager. Under our agreement with Medical
Manager, which will not become effective unless the business combination
between Synetic and Medical Manager is completed, we intend to provide our
healthcare e-commerce services to Medical Manager's physician base estimated at
more than 120,000 physicians and intend to use Medical Manager's sales and
support network as a platform from which to distribute, install and support our
transaction, messaging and content services to Medical Manager physicians.
Under the agreement, Medical Manager has agreed to help advertise, market and
sell our services to Medical Manager customers and dealers. In addition,
Medical Manager has agreed to focus its efforts to advertise, market and sell
our services to certain physicians with high transaction volumes.

Technology Platform

Our system is comprised of a network of computers, related equipment and
application software that uses the Internet to link the key participants in the
healthcare industry. We expect that the CareInsite system will facilitate a
broad range of healthcare transactions, such as enabling a physician to order
prescriptions and lab tests and to verify a particular patient's eligibility
for treatment under his or her health plan, and will facilitate medical claims
processing, compiling medical data and informing physicians of particular
patient histories.

The CareInsite system is a comprehensive online transaction processing
environment focused on the key physician oriented aspects of healthcare e-
commerce. The CareInsite system is being designed to request, receive,
rationalize, and present patients' clinical records, drug and medical reference
content, treatment guidelines, and financial status and payer rules related to
treatment preferences to the physician at the point of care. Underlying these
processes are the capabilities to acquire, validate, and maintain patient- and
plan-specific directories, house, and execute payer- and provider-specific
rules, as well as to analyze and report results.

The magnitude and complexity of the healthcare data model and rules
engines required to establish precise, relevant communication among healthcare
payers, providers, and eventually consumers at various points of care exceeds
the development capability of start-up Internet-focused enterprises. We
obtained a perpetual, royalty-free license to certain Cerner technology, which
provides the foundation for our transaction processing environment and which we
believe will enable us to accelerate the roll out of our services. We will also
continue to leverage commercially available software, make acquisitions, create
joint ventures with strategic partners and pursue internal software
development.

Our technological innovation is the integration of the licensed Cerner
technology with the capability to deliver patient's health benefit rules at the
point of care. We leverage Cerner's proven person-focused data model, its
Master Patient Index supported by industry-leading patient matching procedures
and a portfolio of Web-enabled clinical applications. These applications are
currently accessed by more than 15,000 physicians who use them to support
clinical workflow in the hospital and integrated delivery network environment.
We build upon the Cerner Health Network Architecture to create the CareInsite
system which provides the ability to communicate our customers' benefit plan
rules, such as prior authorization, treatment guidelines, formularies and plan
specific order sets within physician's workflow at the point of care.

The CareInsite system incorporates industry leading capabilities with
respect to the following attributes:

Compatibility. Our technology solution is being designed to work with
virtually any physician's desktop system. The CareInsite system is designed to
work from within either Microsoft's or Netscape's browsers. We work with
vendors to integrate our transactions into physicians' workflow. We believe
that many of our competitors will have difficulty interfacing with existing
systems of multiple payers. The industry-wide challenge of building interfaces
to integrate with providers' and payers' existing systems is significantly
simplified because of Cerner's Interface Services, which include an application
that supports the interfacing of

39
<PAGE>

computer applications and its library of foreign system interfaces that have
been built, tested and are maintained to interact with over 1,000 healthcare
provider and payer-based systems. Our system employs the licensed Cerner
technology to provide access to information from servers it does not control or
own by implementing open interface protocols and providing tools that simplify
interface creation and data integration. Moreover, our platform exploits
Cerner's common data/process model, which uses new standards to seamlessly
integrate functions into the workflow of client applications.

Security. A security database defines the relationship among all elements
in the system and maintains the required information to support all functions,
including login, availability of data, user-privileges, user activity and
inactivity monitoring, access control, transaction routing, billing, and error
messages. The security database is being designed to address unauthorized
disclosure of information, unauthorized modification of information, loss of
data integrity, and denial of service. The CareInsite system employs a variety
of techniques in order to provide a comprehensive and secure system, including
128-bit data encryption technology, firewall technology among all subnetworks
throughout the system, and systems to immediately identify break-in attempts
and automate lock-out if breaches are suspected. In addition, our system builds
upon the proven patient data security services of the Cerner systems.

Scalability. Scalability, the ability of a networked computer system to
support an increasing number of system users without adversely affecting system
performance, is inherent in the design and selection of software components for
the CareInsite system. CareInsite's applications are designed to be used by
thousands of physicians in a particular region of the country simultaneously.
CareInsite's applications and data center are designed to be rapidly scaled to
support all of CareInsite's users with rapid response times. The key software
components of the CareInsite system have been tested and benchmarked to verify
this scalability.

Rapid Application Development. Our development of a single architecture,
common data model, use of industry standards wherever available, and object-
oriented approach to development is designed to maximize the speed with which
thoroughly tested, complex healthcare applications can be brought to market. We
use a method of software development called "time-boxed incremental delivery
life cycle model" for our software development, with certification and quality
assurance processes for each delivery into our service. Under this method, we
provide new releases of our software at regular intervals.

High Availability. We intend to maintain a highly reliable systems
architecture operating in our data center. The reliability is achieved by
duplication of key components, including networking devices, networking and
telecommunications connections and storage devices. In addition, high
availability of these operations will also be assured through the use of:

. uninterrupted power supply equipment;

. building-independent cooling and environmental systems;

. automatic fail-over of critical network services; and

. 24 hour a day monitoring of network connectivity, traffic,
hardware and software status.

Our data center will be in operation seven days a week, 24 hours a day.

Disaster Recovery. While we believe our facilities and operations will
include redundancy, back-up and security to ensure minimal exposure to systems
failure or unauthorized access, a comprehensive and prudent disaster recovery
plan will also be put in place. Incremental backups of both software and
databases will be performed on a daily basis and a full system backup will be
performed monthly. Backup tapes will be stored at an offsite location along
with copies of schedules/production control procedures, procedures for recovery
using an off-site data center, all off-site documentation, run books, call
lists, critical forms and supplies. We also intend to maintain power backup
throughout the enterprise should a power outage occur within the data center.

40
<PAGE>

Competition

The market for healthcare e-commerce is in its infancy and is undergoing
rapid technological change. Competition will potentially come from several
areas, including traditional healthcare software vendors, electronic data
interchange network providers, emerging e-commerce companies or others.
Traditional healthcare software vendors typically provide some form of
physician office practice management system. These include companies like Medic
and IDX. These organizations primarily focus on the administrative functions in
the healthcare setting. Electronic data interchange network providers and
claims clearinghouses like Envoy, which was recently acquired by Quintiles
Transnational, and NDC provide connectivity to edit and transmit data on
medical and pharmacy claims. These companies are beginning to offer services
which may be competitive with our clinical e-commerce services. Companies like
Healtheon, which recently entered into a definitive agreement to acquire WebMD,
and other emerging e-commerce companies offer a range of services which are
competitive to ours. Any organizations that create stand-alone healthcare
software products may migrate into the healthcare e-commerce business. Due to a
high degree of system and application interconnectivity, we believe that we
will share common customers with many of these organizations. We also believe
that in most instances, our services are incremental and complementary
applications to the existing services offered by these companies. Some of our
competitors have services that are currently in operation. Some of our
competitors also have greater financial, technological and marketing resources
than we do. Further, some of our competitors have entered into strategic
relationships that make them more competitve, including Quintiles' recent
acquisition of Envoy and Healtheon's proposed plan to merge with WebMD.

Government Regulation

Participants in the healthcare industry are subject to extensive and
frequently changing regulation at the federal, state and local levels. The
Internet and its associated technologies are also subject to government
regulation. Many existing laws and regulations, when enacted, did not
anticipate the methods of healthcare e-commerce we are developing. We believe,
however, that these laws and regulations may nonetheless be applied to our
healthcare e-commerce business.

Current laws and regulations which may affect the healthcare e-commerce
industry relate to the following:

. confidential patient medical record information,

. the electronic transmission of information from physicians'
offices to pharmacies, laboratories and other healthcare industry
participants,

. the use of software applications in the diagnosis, cure,
treatment, mitigation or prevention of disease,

. health maintenance organizations, insurers, healthcare service
providers and/or employee health benefit plans, and

. the relationships between or among healthcare providers.

We expect to conduct our healthcare e-commerce business in substantial
compliance with all material federal, state and local laws and regulations
governing our operations. However, the impact of regulatory developments in the
healthcare industry is complex and difficult to predict. We cannot assure you
that we will not be materially adversely affected by existing or new regulatory
requirements or interpretations. These requirements or interpretations could
also limit the effectiveness of the use of the Internet for the methods of
healthcare e-commerce we are developing or even prohibit the sale of a subject
product or service.

Healthcare service providers, payers, and plans are also subject to a
wide variety of laws and regulations that could affect the nature and scope of
their relationships with us. Laws regulating health

41
<PAGE>

insurance, health maintenance organizations and similar organizations, as well
as employee benefit plans, cover a broad array of subjects, including
confidentiality, financial relationships with vendors, mandated benefits,
grievance and appeal procedures, and others. State and federal laws have also
implemented so-called "fraud and abuse" rules that specifically restrict or
prohibit certain types of financial relationships between us or our customers
and healthcare service providers, including physicians and pharmacies. Laws
governing healthcare providers, payers and plans are often not uniform between
states, and could require us to undertake the expense and difficulty of
tailoring our business procedures, information systems, or financial
relationships in order for our customers to be in compliance with applicable
laws and regulations. Compliance with such laws could also interfere with the
scope of our services, or make them less cost-effective for our customers.

Because of the Internet's popularity and increasing use, new laws and
regulations with respect to the Internet are becoming more prevalent. Such laws
and regulations have covered, or may cover in the future, issues such as:

. security, privacy and encryption,

. pricing,

. content,

. copyrights and other intellectual property,

. contracting and selling over the Internet,

. distribution, and

. characteristics and quality of services.

Moreover, the applicability to the Internet of existing laws in various
jurisdictions governing issues such as property ownership, sales and other
taxes, libel and personal privacy is uncertain and may take years to resolve.
Demand for our applications and services may be affected by additional
regulation of the Internet. For example, until recently current Health Care
Financing Administration guidelines prohibited transmission of Medicare
eligibility information over the Internet. Any new legislation or regulation
regarding the Internet, or the application of existing laws and regulations to
the Internet, could adversely affect our business. Additionally, while we do
not currently operate outside of the United States, the international
regulatory environment relating to the Internet market could have an adverse
effect on our business, especially if we should expand internationally.

The growth of the Internet, coupled with publicity regarding Internet
fraud, may also lead to the enactment of more stringent consumer protection
laws. These laws may impose additional burdens on our business. The enactment
of any additional laws or regulations in this area may impede the growth of the
Internet, which could decrease our potential revenues or otherwise cause our
business to suffer.

We are subject to extensive regulation relating to the confidentiality
and release of patient records. Additional legislation governing the
distribution of medical records has been proposed at both the state and federal
level, and new federal laws or regulations are likely to be enacted within the
next six to nine months, pursuant to the Health Insurance Portability and
Accountability Act of 1996, which requires the Secretary of Health and Human
Services to promulgate rules governing the use and disclosure of individually
identifiable healthcare information no later than September, 1999, in the event
that Congress does not enact legislation on the subject. It may be expensive to
implement security or other measures designed to comply with any new
legislation. Moreover, regulations governing use and disclosure of healthcare
information may restrict our ability to deliver patient records under certain
circumstances or for certain purposes, or in a particular format, such as
electronically.

42
<PAGE>

Other legislation currently being considered at the federal level could
affect our business. For example, the Health Insurance Portability and
Accountability Act of 1996 also mandates the use of standard transactions,
standard identifiers, security and other provisions by the year 2000, for
healthcare information that is electronically transmitted, processed, or
stored. We are designing our services to comply with these proposed
regulations; however, these regulations are subject to significant modification
prior to becoming final, which could cause us to use additional resources and
lead to delays in order to revise our services. In addition, our ability to
electronically transmit information in carrying out business activities depends
on other healthcare providers and payers complying with these regulations.

Employees

As of June 1, 1999 we had a total of 134 full-time employees of whom
there were 71 in technical development and engineering, 18 in sales and
marketing, 19 in customer service and 26 in finance and administration.
Currently, 28 of our employees are involved full-time in providing services to
THINC. Pursuant to the terms of a services agreement between our company and
Synetic, certain employees of Synetic may also provide services from time to
time to our company. See "Transactions and Relationships with Principal
Stockholders -- Certain Agreements -- Services Agreement." None of our
employees are represented by labor unions and we have never experienced a work
stoppage. We believe our relationship with our employees to be good. Our
ability to achieve our financial and operational objectives depends on our
ability to continue to attract, integrate, retain and motivate highly qualified
technical and customer support personnel. A competitive environment exists for
qualified personnel in the New Jersey and Boston, Massachusetts area.

Facilities

Our principal executive office is located in Elmwood Park, New Jersey, in
approximately 10,000 square feet of leased office space under a lease agreement
that expires on December 31, 2002. We also maintain approximately 46,000 square
feet of leased office space in Cambridge, Massachusetts under a lease that
expires on February 28, 2002 and approximately 8,800 square feet of leased
office space in Somerset, New Jersey under a lease that expires on March 31,
2001. We believe that our facilities are adequate for our current operations
and that additional leased space can be obtained if needed.

Legal Proceedings

In the normal course of business, we may become involved in various
claims and legal proceedings. In addition, we were named as a defendant in a
complaint filed by Merck & Co., Inc. and Merck-Medco Managed Care, L.L.C. in
February 1999 as described below.

Litigation by Merck & Co., Inc. and Merck-Medco Managed Care, L.L.C. against
our company

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<PAGE>

In November 1993, Merck & Co., Inc. acquired 100% of the equity of Medco
Containment Services, Inc., the predecessor to Merck-Medco Managed Care,
L.L.C., for approximately $6.6 billion in a merger transaction. Synetic was a
publicly traded subsidiary of Medco until May 1994, when Medco sold its entire
interest in Synetic to Synetic and SN Investors, L.P., a limited partnership.
The general partner of SN Investors, L.P. is SYNC, Inc., whose sole stockholder
is Mr. Wygod. Prior to May 1994, Mr. Wygod was Chairman of Medco. The other
individual defendants in this litigation are also former officers and/or
directors of Medco.

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<PAGE>

MANAGEMENT

Directors and Executive Officers

Set forth below is information concerning the current directors and
executive officers of CareInsite. The ages listed below are as of June 1, 1999.

<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Martin J. Wygod......... 59 Chairman of the Board; Director
Paul C. Suthern......... 47 President and Chief Executive Officer; Director
Richard S. Cohan........ 46 Executive Vice President -- Operations
Roger C. Holstein....... 46 Executive Vice President -- Sales & Marketing; Director
James R. Love........... 43 Executive Vice President--Chief Financial Officer; Director
David M. Margulies...... 47 Executive Vice President -- Chief Scientist; Director
David C. Amburgey....... 35 Senior Vice President -- General Counsel and Secretary
Steven L. Zatz.......... 42 Senior Vice President -- Medical Director
Charles A. Mele......... 42 Director
</TABLE>

Martin J. Wygod became the Chairman of the Board of our company in March
1999. Mr. Wygod has been Chairman of the Board of Synetic since May 1989. From
May 1989 to February 1993, Mr. Wygod also served as Synetic's President and
Chief Executive Officer and until May 1994 was an executive officer of Synetic.
Until May 1994, Mr. Wygod was Chairman of the Board of Medco for more than five
years, and until January 1993 he also served as Chief Executive Officer of
Medco. He is also engaged in the business of racing, boarding and breeding
thoroughbred horses, and is President of River Edge Farm, Inc.

Paul C. Suthern became Chief Executive Officer and President and a
Director of our company in March 1999. Mr. Suthern has been President and Chief
Executive Officer of Synetic since March 1998 and was an executive officer of
Synetic from February 1993 until July 1996, Vice Chairman of Synetic from July
1996 to March 1998 and also Chief Executive Officer from October 1993 until
January 1995. Mr. Suthern was also President and Chief Operating Officer of
Medco Containment Services, Inc. from November 1992 through December 1994 and
Assistant to Medco's Chairman from December 1991 to November 1992. Prior
thereto, he was Executive Vice President -- Operations for more than five
years.

Richard S. Cohan became Executive Vice President -- Operations of our
company in March 1999. Mr. Cohan joined Synetic in May 1998 as Senior Vice
President. Prior to joining Synetic, he was Executive Vice President, Health
Network Services of National Data Corporation where he led the practice
management systems and transactional services groups for pharmacy, physician
and dental markets for more than five years.

Roger C. Holstein became Executive Vice President -- Sales & Marketing
and a Director of our company in March 1999. Mr. Holstein has been Executive
Vice President -- Marketing and Sales of Synetic since 1997. He was a Special
Consultant to Medco from 1996 to 1998. Prior to such time, Mr. Holstein acted
as Senior Executive Vice President -- Chief Marketing Officer of Medco from
1994 to 1995 and Senior Executive Vice President--Marketing and Sales of Medco
from 1991 to 1994.

James R. Love became the Executive Vice President -- Chief Financial
Officer of our company in May 1999 and a Director of our company in March 1999.
Mr. Love became Executive Vice President --Finance and Administration of
Synetic in March 1999. Prior to joining Synetic, Mr. Love was a Managing
Director, since 1993, in the investment banking group of Merrill Lynch & Co. At
Merrill Lynch, he was most recently responsible for the diversified companies
group and the healthcare products group.

Dr. David M. Margulies became Executive Vice President -- Chief Scientist
and a Director of our company in March 1999. Dr. Margulies has been Executive
Vice President -- Chief Scientist of Synetic since January 1997. He was founder
and President of CareAgents. From 1990 to mid-1996, Dr. Margulies was

45
<PAGE>

Executive Vice President and Chief Scientist of the Cerner Corporation, a
leading supplier of enterprise-level clinical applications. Prior to such time,
he was Vice President and Chief Information Officer at Boston Children's
Hospital and on the medical faculties of the Harvard Medical School and
Columbia College of Physicians and Surgeons.

David C. Amburgey became Senior Vice President -- General Counsel and
Secretary of our company in March 1999. Mr. Amburgey has been Vice President --
Legal and Assistant General Counsel of Synetic since March 1999 and Assistant
General Counsel and Assistant Secretary of Synetic since April 1997. Prior to
joining Synetic, Mr. Amburgey was an attorney with the law firm of Shearman &
Sterling since 1993.

Dr. Steven L. Zatz became Senior Vice President -- Medical Director of
our company in June 1999. Prior to joining our company, Dr. Zatz was senior
vice president of RR Donnelley Financial in charge of its health care business
from June 1998 to May 1999. From August 1995 to May 1998, Dr. Zatz was the
president of Physicians' Online. Previously, Dr. Zatz was senior vice president
of U.S. Healthcare and the president of US Quality Algorithms, Inc. (USQA), the
quality management subsidiary of U.S. Healthcare from April 1990 to July 1995.
Prior to joining U.S. Healthcare, Dr. Zatz was a director of Medical Services
in the Group Department of the Prudential Insurance Company of America from
April 1989 to April 1990.

Charles A. Mele became a Director of our company in March 1999. Mr. Mele
has been Executive Vice President -- General Counsel of Synetic since March
1998 and was Vice President-General Counsel from July 1995 to March 1998. Mr.
Mele was an executive officer of Synetic from May 1989 until December 1994 and
was an executive officer of Medco for more than five years, until March 1995.
Mr. Mele is also a director of Group 1 Software, Inc., a computer software
company.

No family relationship exists among any of the directors or executive
officers, except that Martin J. Wygod, Chairman of the Board of our company,
and Paul C. Suthern, Chief Executive Officer and President of our company, are
brothers-in-law. No arrangement or understanding exists between any director or
executive officer and any other person pursuant to which any director or
executive officer was selected as a director or executive officer of our
company. All executive officers are elected annually by the Board and serve at
the discretion of the Board. The individuals above who are employed by Synetic
will continue to hold those positions. Messrs. Wygod, Suthern and Mele are also
directors of Synetic.

Board Composition

Our Board currently has six members, all of whom are currently executive
officers and/or directors of Synetic. We have undertaken, in connection with
our application to list our common stock on the Nasdaq National Market, to add
two independent Board members within 90 days following the offering and to
appoint such independent directors to serve on our audit committee. Each
director holds office until his successor is duly elected and qualified or
until his resignation or removal if earlier. Synetic has agreed, subject to
completion of the business combination between Synetic and Medical Manager, to
use its reasonable best efforts to cause a person designated by Medical Manager
to be appointed to our Board.

Committees of the Board

Our Board has established an audit committee and a compensation
committee.

Audit Committee. The audit committee's primary responsibilities are to
meet with and consider suggestions from members of management and our
independent public accountants concerning the financial operations of our
company. The audit committee also reviews the audited financial statements of
our company and considers and recommends the employment of, and approves the
fee arrangement with, independent public accountants for audit functions and
advisory and other consulting services. The audit committee will be comprised
of two independent directors to be appointed after consummation of the
offering.

46
<PAGE>

Compensation Committee. The compensation committee's responsibilities are
to make determinations with respect to salaries and bonuses payable to our
executive officers and to administer our stock option plans. The compensation
committee will be comprised of two independent directors to be appointed after
consummation of the offering.

Compensation of Directors

Our directors who are employees of our company will not receive
additional compensation for serving as directors of the company. Directors who
are not employees of either our company or Synetic will receive compensation
equal to $30,000 per year in either cash, shares of our common stock or a
combination thereof.

Executive Compensation

The following table presents information concerning compensation paid for
services to Synetic and our company to our CEO and the other executive officers
of our company who earned more than $100,000 for Fiscal 1998. It is anticipated
that the base salaries following the offering will initially be generally
comparable to present levels of base salary.

Summary Compensation Table

<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Securities
----------------------- Underlying All Other
Name and Salary Bonus Synetic Compensation
Principal Position Year ($) ($) Options/SARs ($)
- ------------------ ---- ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Paul C. Suthern.......... 1998 97,692(1) -- 194,000 --
President & CEO 1997 -- -- -- --
1996 160,000 -- -- --

Roger C. Holstein........ 1998 112,404 225,000(2) -- 1,750(3)
Executive Vice
President --
Sales and Marketing

David M. Margulies....... 1998 175,000 -- 272,728(5) --
Executive Vice
President -- Chief
Scientist 1997 72,019(4) -- 272,728(5) --

David C. Amburgey........ 1998 103,846 40,000 25,000 --
Senior Vice President --

General Counsel and
Secretary
</TABLE>
- --------

(1) Mr. Suthern became President and CEO of Synetic in March 1998.

(2) Represents a one time bonus paid to Mr. Holstein upon his execution of his
employment agreement with Synetic. For a description of his employment
agreement, see "Employment Agreements; Holstein Employment Agreement."

(3) Comprised of company matching contributions to the Porex Technologies Corp.
401(k) Savings Plan.

(4) Dr. Margulies became an employee of our company after our acquisition of
CareAgents, Inc. on January 23, 1997. As such, only compensation paid
subsequent to January 23, 1997 is reflected above.

(5) These options were originally granted January 23, 1997 and were canceled
and replaced January 7, 1998.

The following table presents information concerning the options to
purchase Synetic common stock granted during the last fiscal year to our CEO
and the other executive officers of our company, who earned more than $100,000
in the last fiscal year for services rendered to Synetic and our company. We
have adopted stock option plans which contain substantially similar terms and
conditions to certain of Synetic's stock option plans. For a description of
such plans, see "Management -- Compensation Pursuant to Plans and Arrangements
of the Company -- Stock Option Plans."

47
<PAGE>

Option/SAR Grants in Last Fiscal Year

<TABLE>
<CAPTION>
% of Total
Number of Options/
Securities SARs
Underlying Granted to Exercise
Options/ Employees or Base Grant Date
SARs in Fiscal Price Expiration Present
Name Granted (#) Year(2) ($/Sh) Date Value ($)(3)
- ---- ----------- ---------- -------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Paul C. Suthern.... 10,000(1)(4) 0.40% 38.750 7/1/12 145,856
184,000(1) 7.40% 36.875 1/7/08 2,553,898
------- ----- ---------
194,000 7.80% 2,699,754
Roger C. Holstein.. -- -- -- -- --
David M.
Margulies......... 272,728(5) 10.97% 36.875 1/7/08 2,818,841
David C. Amburgey.. 25,000(1) 1.01% 36.875 1/7/13 315,242
</TABLE>
- --------

(1) These options vest and become exercisable at the rate of 20% per year,
commencing on the first anniversary of the date of grant and were granted
on the following dates: 10,000 on July 1, 1997 and 184,000 on January 7,
1998 for Mr. Suthern and 25,000 on January 7, 1998 for Mr. Amburgey. The
options to purchase Synetic common stock will continue to vest and remain
exercisable, subject to such officer's continued employment with Synetic or
our company and the terms and conditions of Synetic's stock option plans.

(2) Based upon the total number of stock options granted to all employees of
Synetic.

(3) The estimated grant date present value as of the most recent fiscal year
end reflected in the above table is determined using the Black-Scholes
model. The material assumptions and adjustments incorporated in the Black-
Scholes model in estimating the value of the options reflected in the above
table include the following: (i) the respective option exercise price,
specified above, equal to the fair market value of the underlying stock on
the date of grant; (ii) the exercise of options within one year of the date
that they become exercisable; (iii) a risk-free interest rate of 6.3% per
annum; and (iv) volatility of 0.2986 calculated using daily prices of
Synetic common stock during the period from the date of purchase of shares
of common stock from Merck & Co. Inc. by Synetic and SN Investors on
December 14, 1994 to June 30, 1998. The ultimate values of the options will
depend on the future market price of Synetic common stock, which cannot be
forecast with reasonable accuracy. The actual value, if any, an optionee
will realize upon exercise of an option will depend on the excess of the
market value of Synetic common stock over the exercise price on the date
the option is exercised. There is no assurance that the value realized by
an optionee will be at or near the value estimated by the Black-Scholes
model or any other model applied to value the options.

(4) These options were awarded to Mr. Suthern while serving as Vice Chairman of
the Board of Synetic under Synetic's 1991 Director Stock Option Plan.

(5) These options vest and become exercisable at the rate of 40%, commencing on
the second anniversary of the date of grant and 20% on each subsequent
anniversary and were granted on January 7, 1998. This grant represents the
replacement of a grant of an option originally issued on January 23, 1997.
For a description of the consequences of a termination of his employment on
such options, see "Employment Agreements; Margulies Employment Agreement."

The following table presents information concerning the value realized
upon the exercise of options to purchase Synetic common stock and the fiscal
year-end value of options to purchase Synetic common stock held by our CEO and
the other executive officers of our company who earned more than $100,000 for
Fiscal 1998.

48
<PAGE>

During the fiscal year ended June 30, 1998, no options to purchase
Synetic common stock were exercised by our CEO and the other executive officers
of our company who earned more than $100,000 for Fiscal 1998.

Aggregated Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values

<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-
Options/SARs at Money Options/SARs at
FY-End (#) FY-End ($)(1)
------------------------- -------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Paul C. Suthern............. 234,000 266,000 8,944,500 6,471,500
Roger C. Holstein........... 108,000 400,000 2,371,750 8,175,000
David M. Margulies.......... -- 272,728 -- 4,670,467
David C. Amburgey........... 15,000 85,000 277,500 1,538,125
</TABLE>
- --------

(1) Based upon the Fiscal 1998 closing price of Synetic common stock of $54.00.

Employment Agreements

Margulies Employment Agreement. Synetic entered into an employment
agreement with David M. Margulies, M.D. as of January 23, 1997 in connection
with Synetic's acquisition of CareAgents. Dr. Margulies' employment agreement
provides for an employment period of five years, subject to monthly renewal
thereafter. Dr. Margulies' base salary is $175,000, which may be increased by
the Board of Directors of Synetic in its sole discretion. Dr. Margulies is
entitled to participate in any group insurance, hospitalization, medical,
health and accident, disability, fringe benefit and tax-qualified retirement
plans or programs of Synetic. Dr. Margulies' agreement does not fix Dr.
Margulies' responsibilities or title, other than to provide that he will
provide services to Synetic, CareAgents and their respective affiliates and
subsidiaries, as specified by the Chief Executive Officer or the Board of
Directors of Synetic from time to time.

If his employment is terminated:

. by Synetic for "cause" (as such term is defined in the agreement,
generally consisting of a breach of any material provision of the
agreement, willful misconduct relating to Synetic or its
affiliates, failure to perform his duties in any material respect,
willful violation of laws applicable to the business of Synetic or
its affiliates, commission of a common law fraud or conviction of
a felony or crime involving moral turpitude); or

. due to the resignation of Dr. Margulies for any reason,

Synetic will have no obligation to Dr. Margulies other than the payment of his
earned and unpaid compensation to the effective date of termination.
Termination of employment for any of these reasons will constitute a
"Termination Event" under the Escrow Agreement dated as of January 23, 1997,
among several employees of CareAgents, including Dr. Margulies, Synetic and the
United States Trust Company of New York, as escrow agent, pursuant to which
shares of Synetic common stock owned by Dr. Margulies are held in escrow to
secure, among other things, his obligations under the Margulies employment
agreement. If his employment is terminated:

. by Synetic as a result of Dr. Margulies' permanent disability;

. as a result of Dr. Margulies' death; or

. by Synetic without "cause,"

49
<PAGE>

Synetic will have no obligation to Dr. Margulies other than the payment of his
earned and unpaid compensation to the effective date of termination and as
specified in the stock option agreement described below.

Pursuant to a stock option agreement between Synetic and Dr. Margulies,
Dr. Margulies has been granted nonqualified stock options to purchase 272,728
shares of Synetic common stock. The options become exercisable in the following
manner: 40% on January 7, 2000 and an additional 20% on each of January 7,
2001, January 7, 2002 and January 7, 2003. Upon termination of his employment,
the options will terminate to the extent not vested, unless such termination of
employment is without "cause" or as a result of permanent disability or death,
in which case the options will continue to vest as if he remained in the employ
of Synetic through the earlier of the next date on which additional options
would vest or the occurrence of any circumstance or event that would constitute
"cause."

Dr. Margulies' employment agreement contains confidentiality obligations
that survive indefinitely and non-solicitation and non-competition obligations
which apply for a certain period of time following termination of employment.
All obligations of Synetic may be assigned to any of its affiliates without the
consent of Dr. Margulies.

Holstein Employment Agreement. Synetic entered into an employment
agreement with Roger C. Holstein as of November 6, 1997. Mr. Holstein's
employment agreement provides for an employment period of five years, subject
to monthly renewal thereafter. Mr. Holstein's base salary is $175,000, which
may be increased by the Board of Directors of Synetic in its sole discretion,
except that when revenues from the healthcare communications business exceed
$30,000,000, the Board of Directors will increase Mr. Holstein's compensation
to a level commensurate with his contribution, as determined in its reasonable
judgement. Mr. Holstein's employment agreement provided for a one-time payment
of $225,000 to Mr. Holstein upon the signing of the agreement. Mr. Holstein is
entitled to participate in any group insurance, hospitalization, medical,
health and accident, disability, fringe benefit and tax-qualified retirement
plans or programs or vacation leave of Synetic. Mr. Holstein's employment
agreement fixes Mr. Holstein's title as Executive Vice President of Synetic,
and provides that his responsibilities will be determined by the Chairman of
the Board of Directors and the Chief Executive Officer of Synetic from time to
time.

If his employment is terminated:

. by Synetic for "cause" (as such term is defined in the agreement,
which is substantially similar to the definition contained in the
Margulies Agreement); or

. due to the resignation of Mr. Holstein for any reason other than
"cause" (as such term is defined in the agreement, generally
consisting of a breach of any material provision, demotion or
relocation),

Synetic will have no obligation to Mr. Holstein other than the payment of his
earned and unpaid compensation to the effective date of termination.

If his employment is terminated:

. by Synetic as a result of Mr. Holstein's permanent disability; or

. as a result of Mr. Holstein's death,

Synetic will have no obligation to Mr. Holstein other than the payment of his
earned and unpaid compensation to the effective date of termination and with
respect to stock options, as specified in the following paragraph.

If his employment is terminated:

. by Synetic without "cause;" or

. by Mr. Holstein for "cause,"

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Synetic will have an obligation:

. to pay Mr. Holstein his earned and unpaid compensation to the
effective date of termination and a monthly severance payment
equal to one twelfth of his then applicable base salary (less
required deductions) for a period ending two years from the date
of such termination or until the occurrence of a circumstance or
event that would constitute "cause"; and

. with respect to stock options, as specified in the next paragraph.

In addition, Mr. Holstein has the right to terminate his employment upon 30
days' written notice to Synetic at any time after a 12-month period following
the occurrence of "change of control." A "change of control" will occur if:

. any person, entity or group (excluding Mr. Martin J. Wygod)
acquires at least 50% of the voting power of the outstanding
voting securities of Synetic and following such acquisition Mr.
Wygod ceases to hold one or more of the positions of the Chairman
of the Board of Directors of Synetic, Chief Executive Officer of
Synetic or a senior executive officer of the acquirer of the 50%
voting power (in each case, with duties and responsibilities
substantially equivalent to those prior to such acquisition);

. the occurrence of a reorganization, merger or consolidation or
sale of or other disposition of all or substantially all of
Synetic's assets and following such an event Mr. Wygod ceases to
hold the positions described above; or

. the occurrence of a complete liquidation or dissolution of
Synetic.

In the event of such a termination, his stock options will be treated in the
manner described in the following paragraph.

In the event of termination of Mr. Holstein's employment agreement by
Synetic without "cause" or by Mr. Holstein for "cause," the options to purchase
500,000 shares of Synetic common stock held by Mr. Holstein will remain
outstanding and continue to vest as though Mr. Holstein remained in the employ
of Synetic through the earlier of the second anniversary of the date of
termination and the occurrence of a circumstance or event that would constitute
"cause." In the event of termination of Mr. Holstein's employment agreement by
Mr. Holstein due to a "change in control" or as a result of Mr. Holstein's
death or permanent disability, the options will remain outstanding and continue
to vest as though Mr. Holstein remained in the employ of Synetic through the
earlier of:

. the later of November 6, 2002 and the last date on which such
options actually vest; and

. the occurrence of a circumstance or event that would constitute
"cause."

Mr. Holstein's employment agreement contains confidentiality obligations
that survive indefinitely and non-solicitation and non-competition obligations
which apply for a certain period of time following termination of employment.
All obligations of Synetic may be assigned to any of its affiliates without the
consent of Mr. Holstein.

Compensation Pursuant to Plans and Arrangements of the Company

Set forth below is information with respect to certain benefit plans and
employment arrangements of our company pursuant to which non-cash compensation
was paid or distributed for Fiscal 1998, or is proposed to be paid or
distributed in the future, to the directors and executive officers of our
company. Our executive officers may continue to be included in Synetic's
benefit plans and employment arrangements. Our company would bear a portion of
the costs incurred in connection with such participation.

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<PAGE>

Under Section 162(m) of the Internal Revenue Code of 1986, as amended,
the deduction for federal income tax purposes by publicly held corporations for
amounts in excess of $1 million paid to certain executive officers is limited
unless such excess compensation is "performance-based" (as defined in Section
162(m)), subject to certain exceptions. Except for the grant of stock options,
currently scheduled compensation of our executive officers will not result in
any excess compensation. We intend to take steps to ensure that compensation
realized upon the exercise of stock options will be "performance-based" as
defined in Section 162(m).

CareInsite's Stock Option Plans

We have adopted the CareInsite, Inc. 1999 Officer Stock Option Plan and
the CareInsite, Inc. 1999 Employee Stock Option Plan. Our shareholders have
also approved these plans. The following description of each of the plans is
qualified in its entirety by the full text of the plans which is set forth as
an Exhibit to this registration statement. The maximum number of shares of our
common stock that will be subject to options under our employee stock option
plan is 4,000,000 and the maximum number of shares of our common stock that
will be subject to options under our officer stock option plan is 3,500,000,
subject to adjustment in accordance with the terms of the plans. Our employee
stock option plan limits the number of options that may be granted thereunder
to an eligible optionee in any one-year period to no more than 250,000 and our
officer stock option plan limits such number to no more than 450,000. These
amounts are subject to adjustment in accordance with the terms of the plans.

Each of the plans will be administered by our compensation committee
except as described below, provided that under certain circumstances the
compensation committee may, subject to certain conditions, delegate authority
under our employee stock option plan to certain designated officers. All of the
members of the compensation committee will be nonemployee directors and
"outside directors" within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934 and Section 162(m) of the Internal Revenue Code of 1986,
as amended, respectively. Until such time as our compensation committee is
established, the stock option committee of Synetic may grant options under the
plans, so long as such action is separately approved by our board of directors.
The grants to be made on the date of this offering will be approved by our
board of directors as well as the stock option committee of Synetic. The
compensation committee will have the authority, within limitations as set forth
in the plans, to determine the persons to whom options may be granted, the
number of shares of common stock to be covered by each option, the time or
times at which the options may be granted or exercised and the terms and
provisions of the options to be granted.

Eligibility for the grant of options under our officer stock option plan
is limited to officers of our company, its subsidiaries and its affiliates, so
long as they perform services for our company, its subsidiaries or its
affiliates. Eligibility for the grant of options under our employee stock
option plan is limited to key employees and certain consultants, agents and key
contractors of our company, its subsidiaries and its affiliates, so long as
they continue to perform services for our company, its subsidiaries or its
affiliates. Options granted under the plans may be either incentive stock
options within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended, or non-qualified stock options, as determined by the compensation
committee. The exercise price for an incentive stock option may not be less
than 100% (or 110% if the optionee owns or is deemed to own more than 10% of
the total combined voting power of all classes of stock of our company or a
subsidiary or the parent) of the fair market value of the common stock on the
date of grant, as determined in accordance with the plans. Non-qualified stock
options granted under the plans must have an exercise price of at least 85%
(100% in the case of designated eligible optionees whose compensation may be
subject to the limitation on tax deductible compensation imposed by Section
162(m) of the Internal Revenue Code of 1986 as amended) of the fair market
value of the common stock on the date of grant (as determined in accordance
with the plans). If there is a change in control (as defined below), the
compensation committee may provide that options granted under the plans will
become exercisable in whole or in part, whether or not the options are
otherwise exercisable. A change in control is generally defined in both plans
as the occurrence of:

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<PAGE>

. any person (excluding Synetic and its subsidiaries, our company
and its subsidiaries and certain affiliates of our company, and
the employee benefit plans maintained by Synetic or our company
and its subsidiaries and certain affiliates) becoming the
beneficial owner of 50% or more of the voting power of (a) our
company's voting securities, or (b) Synetic's voting securities so
long as Synetic is the beneficial owner of 50% or more our voting
securities;

. during a 24-month period the individuals who, at the beginning of
such period, constituted our company's board of directors cease to
be a majority of such board of directors unless such new directors
were elected or recommended by the individuals who, at the
beginning of such period, constituted our company's board of
directors;

. during a 24-month period the individuals who, at the beginning of
such period, constituted Synetic's board of directors cease to be
a majority of such board of directors unless such new directors
were elected or recommended by the individuals who, at the
beginning of such period, constituted Synetic's board of
directors, but only if, at the time such individuals cease to be a
majority of Synetic's board of directors, Synetic is the
beneficial owner of 50% or more of our voting securities;

. the approval by the stockholders of our company of a merger or
consolidation of our company, without the consent of a majority of
the individuals who, immediately prior to such merger or
consolidation, constituted our company's or Synetic's board of
directors;

. the approval by the stockholders of Synetic of a merger or
consolidation of Synetic, without the consent of a majority of the
individuals who, immediately prior to such merger or
consolidation, constituted Synetic's board of directors, but only
if at the time of such approval Synetic is the beneficial owner of
50% or more of our voting securities;

. stockholder approval of a sale of all or substantially all of the
assets of (a) our company, or (b) Synetic, so long as Synetic is
the beneficial owner of 50% or more of our voting securities; or

. adoption of a plan of liquidation of (a) our company, or (b)
Synetic, so long as Synetic is the beneficial owner of 50% or more
of our voting securities.

No option will become exercisable due to a change in control of Synetic,
unless, immediately preceding such change in control, Synetic was in "control"
of our company. In addition, the compensation committee may determine at the
time of grant or thereafter that an option shall become exercisable in full or
in part upon the occurrence of such circumstances or events as the compensation
committee determines merit special consideration.

Each of the plans may be terminated and may be modified or amended by our
board of directors or compensation committee at any time; provided, however,
that:

. no modification or amendment will be effective without stockholder
approval if such approval is required by law or under the rules of
the Nasdaq National Market or any stock exchange on which our
common stock is listed; and

. no such termination, modification or amendment may adversely alter
or affect the terms of any then outstanding options previously
granted without the consent of the affected optionee.

On the effective date of this offering, our company will grant options
under our stock option plans to purchase 4,000,000 shares of our common stock,
including the grants to individuals listed in the table below. The exercise
price of these options is the initial public offering price in the offering.
Forty percent of these options will vest at the end of a thirty month period
from the date of grant, and the remainder will vest in increments of twenty
percent at the end of each subsequent twelve-month period, with the options
being fully vested sixty-six months from the date of grant.

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<PAGE>

<TABLE>
<CAPTION>
Name Number of Options
---- -----------------
<S> <C>
Martin J. Wygod........................................ 450,000
Chairman of the Board; Director
Paul C. Suthern........................................ 200,000
President and CEO
Richard S. Cohan....................................... 100,000
Executive Vice-President--Operations
Roger C. Holstein...................................... 100,000
Executive Vice President--Sales and Marketing;
Director
James R. Love.......................................... 75,000
Executive Vice President--Chief Financial Officer;
Director
David M. Margulies..................................... 100,000
Executive Vice President--Chief Scientist; Director
David C. Amburgey...................................... 75,000
Senior Vice President--General Counsel and Secretary
Steven L. Zatz......................................... 160,000
Senior Vice President--Medical Director
All current executive officers as a group.............. 1,260,000
All current directors who are not executive officers,
as a group............................................ 100,000
All employees, including current officers, but
excluding directors and executive officers, as a
group................................................. 2,640,000
</TABLE>

Synetic's Stock Option Plans

The executive officers of our company have been granted options to
purchase shares of Synetic common stock pursuant to Synetic's stock option
plans. See "Management --Executive Compensation." The Synetic option plans are
administered by a stock option committee of Synetic and contain terms and
conditions which are substantially similar to the terms of our stock option
plans. Subject to the terms and conditions of Synetic's stock option plans, the
Synetic options will continue to vest and remain outstanding so long as the
respective officers remain in the employ of our company.

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<PAGE>

SECURITY OWNERSHIP OF MANAGEMENT

Prior to the offering, Synetic owned 80.1% of our outstanding common
stock through its wholly owned subsidiary, Avicenna Systems Corporation. Prior
to the offering, all other outstanding shares of our common stock were owned by
Cerner. Synetic's address is River Drive Center II, 669 River Drive, Elmwood
Park, New Jersey, 07407 and Cerner's address is 2800 Rock Creek Parkway, Suite
601, Kansas City, Missouri, 64117. None of our directors or executive officers
beneficially own any of our common stock. The following table, however, sets
forth information with respect to the beneficial ownership of Synetic common
stock as of June 1, 1999 by our directors, our executive officers and all of
our directors and executive officers as a group. Except as indicated by
footnote, and subject to applicable community property laws, the persons named
in the table have sole voting and investment power with respect to all shares
of Synetic common stock shown as beneficially owned by them. The number of
shares of Synetic common stock deemed outstanding used in calculating the
percentage for each listed person includes: (1) 20,566,161 shares of Synetic
common stock outstanding as of June 1, 1999, (2) the number of shares of
Synetic common stock that the respective persons named in the table below have
the right to acquire presently or within 60 days of June 1, 1999 upon exercise
of stock options and (3) the number of shares of Synetic common stock that the
respective persons named in the table below have the right to acquire upon
conversion of Convertible Debentures.

<TABLE>
<CAPTION>
Shares of Synetic
Common Stock
Beneficially Percent of
Name Owned(1) Class(6)
---- ----------------- ----------
<S> <C> <C>
Martin J. Wygod.......................... 5,611,742(2)(3)(4) 26.71%
Paul C. Suthern.......................... 342,298(3)(5) 1.64%
Richard S. Cohan......................... -- *
Roger C. Holstein........................ 209,413 1.01%
James R. Love............................ -- *
David M. Margulies....................... 28,917 *
David C. Amburgey........................ 35,059 *
Steven L. Zatz........................... -- *
Charles A. Mele.......................... 348,431(2) 1.67%
Directors and executive officers as a
group (8 persons)....................... 6,352,067 29.29%
</TABLE>
- --------

* Less than 1% of the shares outstanding of the class.

(1) The number of shares of common stock beneficially owned includes the
following number of shares of Synetic common stock that the following
persons have the right to acquire on or within 60 days of June 1, 1999 upon
exercise of stock options and upon conversion of Synetic's 5% Convertible
Subordinated Debentures Due 2007: Mr. Holstein, 208,833; Mr. Mele, 125,833;
Mr. Suthern, 307,300; Mr. Wygod, 220,000; Mr. Amburgey, 35,000 and all
directors and executive officers as a group, 896,966. The number of shares
also includes 105 shares of Synetic common stock allocated to the account
of Mr. Holstein, 247 shares of Synetic common stock allocated to the
account of Mr. Mele and 59 shares of Synetic common stock allocated to the
account of Mr. Amburgey under the Porex 401(k) Savings Plan as of March 31,
1999.

(2) Includes 186,961 shares of Synetic common stock and shares of Synetic
common stock issuable upon conversion of $500,000 principal amount of
Convertible Debentures owned by the Rose Foundation, a charitable
foundation of which Messrs. Mele and Wygod are trustees and share voting
and dispositive power.

(3) Includes 3,500 shares of Synetic common stock and shares of Synetic common
stock issuable upon conversion of $1,500,000 principal amount of
Convertible Debentures owned by the Synetic Foundation, formerly known as
the Medco Containment Services Foundation, Inc., a charitable foundation of
which Messrs. Suthern and Wygod are trustees and share voting and
dispositive power.

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<PAGE>

(4) Includes 2,000 shares of Synetic common stock beneficially owned by Mr.
Wygod's spouse, as to which shares Mr. Wygod disclaims beneficial
ownership.

(5) Includes 1,200 shares of Synetic common stock held in custodial accounts
for Mr. Suthern's children.

(6) On May 16, 1999, Synetic entered into a definitive merger agreement with
Medical Manager that calls for each outstanding share of Medical Manager
common stock to be exchanged into 0.625 newly issued shares of Synetic
common stock, subject to adjustment. Issuance of such shares if the merger
is consummated will reduce the percent ownership amounts presented.

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<PAGE>

TRANSACTIONS AND RELATIONSHIPS WITH PRINCIPAL STOCKHOLDERS

Security Ownership

Prior to the offering, 80.1% of our capital stock was owned by Synetic
through its wholly owned subsidiary, Avicenna Systems Corporation, and 19.9%
was owned by Cerner. Upon completion of the offering and the concurrent private
sale of approximately 645,000 shares of our common stock to Cerner, Synetic
will own 50,763,375 shares, or approximately 72.9% of the outstanding shares of
our common stock and Cerner will own approximately 13,256,625 shares, or
approximately 19.0% of the outstanding shares of our common stock. In addition,
THINC owns a warrant which, 180 days after the completion of the offering, may
be exercised for up to 4,059,118 shares of our common stock. If THINC exercises
this warrant, Cerner has a related warrant entitling it to purchase up to
1,008,445 shares of our common stock. In addition, we will issue to Cerner
2,503,125 shares of our common stock on or after February 15, 2001 at a price
of $.01 per share if we realize a specified level of physician usage of our
services. Synetic will have the ability to control the vote on matters
submitted to a vote of our stockholders and will also be able to elect all of
the directors of our company. Certain of our directors and executive officers
own shares of Synetic common stock. See "Security Ownership of Management."

Conflicts of Interest

Upon completion of the offering, Synetic will retain effective control of
our company and may be in a position to cause us to merge, consolidate,
liquidate or sell all or a substantial portion of our assets on terms
determined by Synetic. Certain of Synetic's officers and directors are officers
or directors of our company. Such directors and officers of our company who are
also directors or officers of Synetic are in positions which may expose them to
conflicts of interest. Such conflicts of interest may arise in connection with
transactions involving business dealings between our company and Synetic, the
allocation of acquisition opportunities, the issuance of additional shares of
our common stock or other securities of our company and other matters involving
conflicts that cannot now be foreseen.

It is contemplated that, after the offering, a majority of the directors
and officers of our company will also be directors and/or officers of Synetic
and will continue to spend a substantial amount of their business time as
directors or officers of Synetic and its other subsidiaries and may be engaged
in other business activities, consistent with their other employment
agreements, if any. For a list of those officers and directors of our company
who are also directors and/or officers of Synetic, and the positions they hold
with each company, see "Management--Directors and Executive Officers."

Stockholders Agreement

We are party to a stockholders agreement with Synetic, Avicenna and
Cerner, dated January 2, 1999, which terminates on the later of January 2, 2004
and the date upon which Cerner ceases to own any of our common stock. Among
other things, the stockholders agreement prohibits Synetic or Avicenna from
entering into transactions with us other than at arm's length, specifies
restrictions on the transfer of shares of our common stock by Cerner, other
than to its affiliates, and provides that, after January 2, 2001, Cerner may
make two demands for registration of our common stock, subject to customary
limitations.

Certain Agreements

Our company and Synetic have entered into or will enter into a number of
agreements for the purpose of defining the ongoing relationship between the two
companies. Additional or modified agreements, arrangements and transactions may
be entered into by us and Synetic after the completion of the offering. Any
such future agreements, arrangements and transactions will be determined
through negotiations between our

57
<PAGE>

company and Synetic, as the case may be. Following the offering, we will
continue to be controlled by Synetic and consequently such negotiations will
not be arm's-length.

The following is a summary of certain existing or proposed agreements
between our company and Synetic. We believe these agreements were, or will be,
made on terms no less favorable to us than could have been obtained from
unaffiliated third parties. See Note 6 of the Notes to Consolidated Financial
Statements.

Tax Sharing Agreement. Upon completion of the offering, our company will
cease to file a consolidated federal income tax return with Synetic, but will
continue to file a combined tax return with Synetic for California income tax
purposes. Our company and Synetic will enter into a tax sharing agreement
providing that, for periods prior to the offering and during which our company
was included in Synetic's consolidated federal income tax returns, our company
will be required to pay Synetic an amount equal to our federal income tax
liabilities for these periods, determined as if our company had filed federal
income tax returns on a separate company basis. Additionally, for periods both
before and after the offering, in situations where our company files a combined
return with Synetic for state income tax purposes, such as for California, we
will be required to pay Synetic an amount equal to our state income tax
liabilities, determined as if our company had filed state income tax returns on
a separate company basis. If our company experiences a net operating loss
resulting in no federal or state income tax liability for a taxable period in
which it was included in Synetic's consolidated federal or combined state
income tax returns, our company will be entitled to a payment from Synetic
equal to the reduction, if any, in the federal or state income tax liability of
the Synetic consolidated group by reason of the use of our company's net
operating loss. Further, under the tax sharing agreement, if we receive a net
tax benefit for certain equity based compensation arrangements involving
Synetic stock, or for the payment by Synetic of certain litigation expenses and
damages pursuant to the terms of an indemnification agreement between us and
Synetic as described below, then we are required to pay an amount equal to
those tax benefits to Synetic when they are actually realized by us. The tax
sharing agreement also will provide for Synetic to conduct tax audits and tax
controversies on our behalf for periods, and with respect to returns, in which
we are included in the Synetic consolidated or combined returns.

Services Agreement. Our company and Synetic have entered into a services
agreement dated as of January 1, 1999, pursuant to which Synetic will provide
our company with certain administrative services which may include payroll,
accounting, business development, legal, tax, executive services and
information processing and other similar services. Our company will pay the
actual costs of providing these services. Such costs will include an allocable
portion of the compensation and other related expenses of employees of Synetic
who serve as officers of our company. This agreement will be terminable by
either party upon 60 days' prior written notice in certain events, or by
Synetic, at any time, if Synetic ceases to own at least 50% of the voting stock
of our company. The services agreement shall terminate by its terms, if not
previously terminated or renewed, on January 1, 2004.

Indemnification Agreement. Our company and Synetic will enter into an
indemnification agreement, under the terms of which our company will indemnify
and hold harmless Synetic, on an after tax basis, with respect to any and all
claims, losses, damages, liabilities, costs and expenses that arise from or are
based on the operations of the business of our company before or after the date
of the consummation of the offering. Similarly, Synetic will indemnify and hold
harmless our company, on an after tax basis, with respect to any and all
claims, losses, damages, liabilities, costs and expenses that arise from or are
based on the operations of Synetic other than the business of our company
before or after the date of the consummation of the offering. With respect to
the Merck litigation, this agreement provides that Synetic will bear both the
actual costs of conducting the litigation and any monetary damages that may be
awarded to Merck and Merck-Medco in the litigation. We will record any amounts
funded by Synetic under this agreement as a capital contribution. The agreement
further provides that any damages awarded to our company and Synetic in the
litigation will be for the account of Synetic. Finally, the agreement provides
that Synetic shall not be responsible for any losses suffered by CareInsite
resulting from any equitable relief obtained by Merck and Merck-Medco against
CareInsite, including, but not limited to, any lost profits, other losses,
damages, liabilities, or costs or expenses arising from such equitable relief.

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<PAGE>

The following is a summary of certain agreements we have entered into
with THINC and Cerner.

THINC. In January 1999, our company, THINC, and THINC's founding
members, Greater New York Hospital Association, Empire, Group Health
Incorporated and HIP Health Plans entered into definitive agreements and
consummated a transaction for a broad strategic alliance. Under this
arrangement, among other things, our company:

. acquired a 20% ownership interest in THINC in exchange for
$1,500,000 in cash and a warrant to purchase an aggregate of
4,059,118 shares of common stock of our company, referred to as
the THINC warrant;

. agreed to extend up to $2,000,000 and $1,500,000 in senior loans
to THINC;

. licensed to THINC our content and messaging services for use over
the THINC network; and

Our Clinical Transaction Agreement with Group Health Incorporated
specifies that we do not have the right to provide prescription communication
services to Group Health Incorporated unless either we enter into an agreement
with Group Health Incorporated's pharmacy benefit manager outlining a
methodology for the implementation of such services or Group Health
Incorporated elects to proceed without such an agreement. Group Health
Incorporated's current pharmacy benefit manager is Merck-Medco. To date, we
have not entered into any such agreement with Merck-Medco and Group Health
Incorporated has not made such election. See "Risk Factors -- Litigation by
Merck & Co., Inc. and Merck-Medco Managed Care, L.L.C. against our company."

In connection with our entering into a strategic relationship with
Cerner, we sold to Cerner a beneficial interest to 2% of THINC. As beneficial
owner, Cerner will receive any dividends, income and liquidation or
disposition proceeds related to their 2% interest. However, we will remain the
owner of record, will exercise the voting rights and will have the right to
sell, transfer, exchange, encumber or otherwise dispose of this 2% interest in
THINC. Cerner has agreed to fund $1,000,000 of our $2,000,000 senior loan to
THINC.

As part of this arrangement, THINC entered into Managed Care Transaction
Contracts with each of the THINC payers whereby the THINC payers agreed to use
the THINC network for their online medical claims submission, eligibility,
benefit plan detail, roster distribution, remittance advice distribution,
claims inquiry, referral/pre-certification and authorization, and encounter
submission transactions.

The THINC warrant is exercisable 180 days following the occurrence of an
initial public offering of CareInsite's common stock or, if an initial public
offering has not occurred, at the end of term of the THINC warrant, into an
aggregate of 4,059,118 shares of the common stock of our company. The exercise
price per share of the THINC warrant is the lesser of:

. the price per share of common stock issued in the initial public
offering of our common stock, if an initial public offering has
occurred; and

. $4.00 per share.

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<PAGE>

The THINC warrant expires on January 1, 2006, subject to certain
exceptions. The THINC warrant and the shares of our common stock issuable upon
the exercise of the THINC warrant are subject to certain restrictions on
transfer.

Cerner. In January 1999, our company also entered into definitive
agreements and consummated a transaction with Cerner for a broad strategic
alliance. Cerner is a supplier of clinical and management information systems
for healthcare organizations. Under this arrangement, our company, among other
things, obtained a perpetual, royalty-free license to certain Cerner technology
in exchange for a 19.9% equity interest in our company. Such equity interest is
subject to certain restrictions on transfer and other adjustments. In addition,
we have issued to Cerner a warrant to purchase up to 1,008,445 shares of common
stock at $4.00 per share, exercisable only in the event THINC exercises its
warrant. Also, we will issue to Cerner 2,503,125 shares of our common stock on
or after February 15, 2001 at a price of $.01 per share if we realize a
specified level of physician usage of our services. In connection with our
strategic relationship with Cerner, we sold Cerner the economic rights to 2% of
THINC. Additionally, Cerner has agreed to fund $1,000,000 of our $2,000,000
senior loan to THINC. Our company and Cerner have entered into a non-
competition agreement and, as a result, agreed that our company will be their
exclusive vehicle for providing a full suite of prescription, laboratory and
managed care transaction and messaging services that connect physician's
offices with managed care organizations, pharmacy benefit managers, clinical
laboratories, pharmacies and other providers. We also entered into a marketing
agreement that allows for the marketing and distribution of our services to the
physicians and providers associated with more than 1,000 healthcare
organizations who currently utilize Cerner's clinical and management
information system. Our company and Cerner also agreed to promote each other's
services and products to their respective customers. In addition, Cerner
committed to make available to our company engineering and systems architecture
personnel and expertise to accelerate the deployment of CareInsite's services,
as well as ongoing technical support and future enhancements to the licensed
Cerner technology.

Medical Manager. In May 1999, Medical Manager and our company entered
into an agreement with a term of five years, which can be renewed for two
successive five year terms subject to the parties reaching agreement on certain
renewal terms. Under this agreement, we will be the exclusive provider of
certain network, web hosting and transaction services to Medical Manager. In
exchange, we will pay to Medical Manager certain fees on transactions performed
on behalf of Medical Manager customers. Our agreement with Medical Manager does
not become effective until completion of the business combination between
Synetic and Medical Manager. The merger between Synetic and Medical Manager
remains subject to approval by Synetic's and Medical Manager's stockholders,
regulatory approval and certain other customary conditions. Either Synetic or
Medical Manager may terminate their agreement to merge in certain events,
including if the merger is not completed by November 30, 1999, and Medical
Manager may terminate the merger agreement if the average closing price of
Synetic's common stock during a ten-day period preceding the vote of Medical
Manager stockholders is less than $56.00 per share. The closing price of
Synetic's common stock on June 2, 1999 was $83.375 per share. Once effective,
the agreement is also subject to early termination in the event either party
breaches its material obligations under the agreement, in the case of
bankruptcy of either party, in the event that a competitor of Medical Manager
acquires more than 50% ownership interest of our company resulting in a change
of control of our company or by mutual consent of our company and Medical
Manager.

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<PAGE>

DESCRIPTION OF CAPITAL STOCK

The following description of the capital stock of the Company is subject
to the Delaware General Corporation Law and to provisions contained in the
Company's Certificate of Incorporation and By-Laws, copies of which are
exhibits to this prospectus. Reference is made to such exhibits for a detailed
description of the provisions thereof summarized below.

Our authorized capital consists of 300,000,000 shares of common stock,
par value $.01 per share, and 30,000,000 shares of preferred stock, $0.01 par
value per share. Immediately prior to the offering, 63,375,000 shares of our
common stock were issued and outstanding. Immediately following the offering
and the concurrent private sale of approximately 645,000 shares of our common
stock to Cerner, 69,670,000 shares of our common stock will be issued and
outstanding. Holders of common stock have no preemptive or other subscription
rights.

Common Stock

Holders of record of common stock are entitled to one vote per share on
all matters upon which shareholders have the right to vote. There are no
cumulative voting rights or preemptive rights. Therefore, holders of more than
50% of the shares of common stock are able to elect all our directors eligible
for election each year. All issued and outstanding shares of our common stock
are, and the common stock to be sold in the offering, when issued and paid for,
will be, validly issued, fully paid and non-assessable. Holders of our common
stock are entitled to such dividends as may be declared from time to time by
our Board of Directors out of funds legally available for that purpose. We do
not anticipate paying any cash dividends in the foreseeable future. See
"Dividend Policy." Upon dissolution, holders of our common stock are entitled
to share pro rata in the assets of our company remaining after payment in full
of all of our liabilities and obligations, including payment of the liquidation
preference, if any, of any preferred stock then outstanding. There are no
redemption or sinking fund provisions applicable to the common stock.

Preferred Stock

There are no shares of preferred stock outstanding. Series of the
preferred stock may be created and issued from time to time by our board of
directors, with such rights and preferences as they may determine. Because of
its broad discretion with respect to the creation and issuance of any series of
preferred stock without stockholder approval, the Board of Directors could
adversely affect the voting power of common stock. The issuance of preferred
stock may also have the effect of delaying, deferring or preventing a change in
control of our company.

Certain Provisions of the Certificate of Incorporation and Delaware Law

Our certificate of incorporation provides that, to the fullest extent
permitted by law, so long as our company is controlled by, or under common
control with, Synetic, directors or officers of our company who are also
directors or officers of Synetic shall:

. be obligated to present to our company a potential acquisition, which
may be made by either our company or Synetic, of a business engaged
in the business of providing electronic commerce prescription,
laboratory and managed care communication services that connect
physicians with payers, pharmacies and laboratories; and

. have no obligation to present to our company a potential acquisition
which may be made by either our company or Synetic of a business
which is not engaged in the business of providing electronic commerce
prescription, laboratory and managed care communication services that
connect physicians with payers, pharmacies and laboratories.

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<PAGE>

As used in the paragraph above, an entity shall be deemed to be "engaged"
in any business from which it derived more that 10% of its net revenues for the
fiscal year most recently completed prior to such measurement, and an entity
shall not be deemed to be engaged in the business transacted using such
communication services or the businesses of the persons and entities connected
by such communication services.

We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. In general, the statute prohibits a publicly held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless:

. prior to such date, the board of directors approved either the
business combination or the transaction that resulted in the
stockholder becoming an interested stockholder,

. upon consummation of the transaction that resulted in such person
becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding, for
purposes of determining the number of shares outstanding, shares
owned by certain directors or certain employee stock plans), or

. on or after the date the stockholder became an interested
stockholder, the business combination is approved by the board of
directors and authorized by the affirmative vote (and not by
written consent) of at least two-thirds of the outstanding voting
stock excluding that stock owned by the interested stockholder.

A "business combination" includes a merger, asset sale or other
transaction resulting in a financial benefit to the interested stockholder. An
"interested stockholder" is a person who (other than the corporation and any
direct or indirect majority-owned subsidiary of the corporation), together with
affiliates and associates, owns (or, as an affiliate or associate, within three
years prior, did own) 15% or more of the corporation's outstanding voting
stock. The application of Section 203 could have the effect of delaying or
preventing a change of control of our company.

Indemnification

Our by-laws require us to indemnify each of our directors and officers to
the fullest extent permitted by law and limits the liability of our directors
and stockholders for monetary damages in certain circumstances.

Article Eleven of our certificate of incorporation provides that no
director shall have any personal liability to the Company or its stockholders
for any monetary damages for breach of fiduciary duty as a director, provided
that such provision does not limit or eliminate the liability of any director:

. for any breach of such director's duty of loyalty to the Company
or its stockholders,

. for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law,

. under Section 174 of the Delaware General Corporation Law
(involving certain unlawful dividends or stock repurchases) or

. for any transaction from which such director derived an improper
personal benefit.

Any amendment to such article will not affect the liability of any
director for any act or omission occurring prior to the effective time of such
amendment.

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<PAGE>

Reference is made to the form of indemnification agreement to be entered
into between our company and each of our directors and officers filed as
Exhibit 10.27 to this registration statement pursuant to which we will agree to
indemnify such directors and officers to the fullest extent permitted by
Delaware law, as the same may be amended from time to time.

Transfer Agent and Registrar

We have appointed Registrar and Transfer Company as the transfer agent
and registrar for our common stock.

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<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

After completion of this offering, we will have an aggregate of
69,670,000 shares of common stock outstanding, assuming no exercise of the
Underwriters' over-allotment option. All of the 5,650,000 shares of our common
stock offered in this offering will be freely tradeable without restriction or
further registration under the Securities Act, unless purchased by "affiliates"
of our company, as that term is defined in Rule 144 under the Securities Act.
Approximately 645,000 shares of common stock to be purchased by Cerner in a
private transaction concurrent with this offering are subject to contractual
restrictions on transfer described below and will be "restricted shares," as
that term is defined in Rule 144, and may not be sold in the absence of
registration other than in accordance with Rule 144 or another exemption from
registration under the Securities Act which rules are summarized below. In
addition, the 12,611,625 shares of our common stock held by Cerner, which were
acquired prior to this transaction, will be subject to the contractual
restrictions described below and will also be "restricted securities," subject
to the same Securities Act restrictions. The remaining 50,763,375 shares of
common stock outstanding upon completion of this offering are held by Synetic
and will also be "restricted securities," subject to the same Securities Act
restrictions.

As a result of the contractual restrictions described below and the
provisions of Rules 144 and 144(k) described below, additional shares will be
available for sale in the public market as follows:

. no shares of common stock, other than those sold hereby and not
held by affiliates, will be available for immediate sale in the
public market on the date of this prospectus,

. approximately 645,000 shares of our common stock to be purchased
by Cerner in a private transaction concurrent with this offering
will be eligible for sale one year after the date of this
prospectus, subject to the volume, manner of sale and reporting
requirements of Rule 144, and

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<PAGE>

In addition, THINC and Cerner own warrants exercisable for an aggregate
of up to 5,067,563 shares of our common stock, which warrants cannot be
exercised until 180 days after the completion of this offering. We will also
issue to Cerner 2,503,125 shares of our common stock on or after February 15,
2001 at a price of $.01 per share if we realize specified levels of physician
usage of our services.

Rule 144

In general, under Rule 144 as currently in effect, beginning 90 days
after the date of this prospectus, a person who has beneficially owned shares
of our common stock for at least one year would be entitled to sell within any
three-month period a number of shares that does not exceed the greater of:

. 1% of the number of shares of common stock then outstanding, which
will equal approximately 696,700 shares immediately after this
offering and the concurrent private sale of approximately 645,000
shares of our common stock to Cerner; and

. the average weekly trading volume of the common stock on the
Nasdaq National Market during the four calendar weeks preceding
the filing of a notice on Form 144 with respect to such sale.

Sales under Rule 144 are also subject to certain manner of sale
provisions and notice requirements and to the availability of current public
information about us.

Rule 144(k)
Under Rule 144(k), a person who is not one of our affiliates at any time
during the three months preceding a sale, and who has beneficially owned the
shares proposed to be sold for at least two years, including the holding period
of any prior owner other than an affiliate, is entitled to sell such shares
without complying with the manner of sale, public information, volume
limitation or notice provisions of Rule 144. Therefore, unless otherwise
restricted, "144(k) shares" may be sold immediately upon the completion of this
offering.

Stock Plans
We plan to file a registration statement to register 7,500,000 shares of
common stock reserved for issuance under our stock option plans. See
"Management -- Compensation Pursuant to Plans and Arrangements of the
Company -- Stock Option Plans." Once registered, persons acquiring such shares
upon exercise of their options, whether or not they are affiliates, will be
permitted to resell their shares in the public market without regard to the
Rule 144 holding period.

Registration Rights
Upon completion of this offering, Cerner will be entitled to certain
rights with respect to the registration of 14,265,070 shares of our common
stock, including up to 1,008,445 shares of our common stock issuable upon
exercise of its warrant, under the Securities Act after January 2, 2001.
Registration of such shares under the Securities Act would result in such
shares, except for shares purchased by affiliates, becoming eligible for sale
immediately upon the effectiveness of such registration. In addition, THINC may
exercise demand registration rights requiring us to register for sale any
shares issued pursuant to the exercise of its warrant beginning any time after
January 1, 2001.

Lock-up Agreements and Contractual Restrictions
Upon consummation of this offering and the concurrent private sale of
approximately 645,000 shares of our common stock to Cerner, Synetic and Cerner
will own approximately 72.9% and 19.0% of our outstanding common stock,
respectively. Synetic and Cerner have advised us that they currently have no
plans to reduce their respective ownership interests following this offering.
Synetic is not subject to any contractual obligation to retain its controlling
interest, except that Synetic has agreed not to sell or otherwise dispose of
any shares of our common stock for a period of 180 days after the date of this
prospectus without the prior written

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<PAGE>

consent of Merrill Lynch. Cerner has agreed not to sell or otherwise dispose of
any shares of our common stock for a period of 180 days after the date of this
prospectus without the prior written consent of Merrill Lynch.

In addition, subject to certain exceptions, we have agreed not to sell or
otherwise dispose of any shares of our common stock or other securities that
can be converted into or exchanged for our common stock during the 180-day
period after the date of this prospectus without the prior written consent of
Merrill Lynch, although we may issue and file a registration statement with
respect to shares of our common stock at any time in connection with any
investments in, acquisitions of, or mergers, combinations or other strategic
relations with, other companies.

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<PAGE>

UNDERWRITING

Subject to the terms and conditions set forth in a purchase agreement
(the "Purchase Agreement") between our company and each of the underwriters
named below, we agreed to sell to each of the underwriters, and each of the
underwriters, for whom Merrill Lynch, Pierce, Fenner & Smith Incorporated and
Warburg Dillon Read LLC, as joint book runners, and Wit Capital Corporation are
acting as representatives, have agreed to purchase from us, the number of
shares of common stock set forth opposite its name below:

<TABLE>
<CAPTION>
Number
Underwriter of Shares
----------- ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated..............................................
Warburg Dillon Read LLC............................................
Wit Capital Corporation............................................
---------
Total......................................................... 5,650,000
=========
</TABLE>

The Purchase Agreement provides that the obligations of each of the
underwriters are subject to certain conditions and that when all those
conditions are satisfied each of the underwriters will be obligated to purchase
all of the shares of common stock offered in this offering. In the event of
default by an underwriter, under the Purchase Agreement the commitments of non-
defaulting underwriters may be increased.

The representatives have advised us that the underwriters propose
initially to offer the shares of common stock to the public at the initial
public offering price set forth on the cover page of this prospectus, and to
certain dealers at such price less a concession not in excess of $ per
share of common stock. The underwriters may allow, and those dealers may
reallow, a discount not in excess of $ per share of common stock on sales
to certain other dealers. After the initial public offering, the public
offering price, concession and discount may be changed.

The following table shows the per share and total public offering price,
underwriting discount to be paid by us to the underwriters and the proceeds of
the sale of shares to the underwriters before expenses to us. This information
is presented assuming either no exercise or full exercise by the underwriters
of their over-allotment option.

<TABLE>
<CAPTION>
Without With
Per Share Option Option
--------- ------- ------
<S> <C> <C> <C>
Public offering price............................... $ $ $
Underwriting discount............................... $ $ $
Proceeds, before expenses, to our company........... $ $ $
</TABLE>

We have granted to the underwriters an option, exercisable for up to 30
days after the date of this prospectus, to purchase up to an aggregate of
847,500 additional shares of common stock at the initial public offering price
set forth on the cover of this prospectus less the underwriting discount to
cover over-allotments, if any, made on the sale of the common stock offered
hereby. If the underwriters exercise the over-allotment option, the
underwriters have agreed, subject to certain conditions, to purchase
approximately the same percentage of the additional shares that the number of
shares of common stock to be purchased by each of them as shown in the
foregoing table bears to the 5,650,000 shares of common stock offered in this
offering. The

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<PAGE>

underwriters may exercise such option only to cover over-allotments made in
connection with the sale of the shares of common stock offered hereby.

At our request, the underwriters have reserved for sale, at the initial
public offering price, 565,000 of the shares offered hereby to be sold to
certain directors, officers, employees and consultants of our company, of
Synetic and of Cerner, and to certain other persons. The number of shares of
our common stock available for sale to the general public will be reduced to
the extent these persons purchase the reserved shares. Any reserved shares
which are not orally confirmed for purchase within one day of the pricing of
this offering will be offered by the underwriters to the general public on the
same terms as the other shares offered in this offering.

A prospectus in electronic format is being made available on an Internet
web site maintained by Wit Capital Corporation. In addition, all dealers
purchasing shares from Wit Capital Corporation in this offering have agreed to
make a prospectus in electronic format available on web sites maintained by
each of them. Other than the prospectus in electronic format, the information
on Wit Capital Corporation's web site and any information contained on any
other web site maintained by Wit Capital Corporation or any dealer purchasing
shares from it is not to be part of this prospectus or the registration
statement of which this prospectus forms a part, has not been approved and/or
endorsed by our company or any underwriter in its capacity as underwriter and
should not be relied upon by investors.

Cerner has agreed to purchase directly from us in a separate, private
transaction concurrent with this offering, approximately 645,000 shares of our
common stock at a price equal to the initial public offering price per share
less the underwriting discount.

Our company, our executive officers and directors, Synetic and Cerner
have agreed that, for a period of 180 days after the date of this prospectus,
subject to certain exceptions, they will not without the prior written consent
of Merrill Lynch, directly or indirectly:

. offer, pledge, sell, agree to sell, grant any option, right or
warrant for the sale of, or otherwise dispose of or transfer, any
shares of our common stock or securities convertible into or
exchangeable or exercisable for our common stock, whether now
owned by them or acquired by them in the future, or over which
they now have or acquire power of disposition, or file a
registration statement under the Securities Act with respect to
the offering of any shares of our common stock; or

. enter into any swap or other agreement that transfers, in whole or
in part, the economic consequence of ownership of our common stock
whether any such swap or transaction is to be settled by delivery
of common stock or other securities, in cash or otherwise.

These restrictions do not apply to:

. the shares of our common stock to be sold under this prospectus;

. any shares of our common stock or options to purchase shares of
our common stock that are granted pursuant to existing employee
benefit or stock option plans referred to in this prospectus; and

. any shares of our common stock or other securities or rights that
our company issues in connection with investments in, acquisitions
of, or mergers, combinations or other strategic relationships
with, other companies.

No officers or directors of our company own any shares of our common
stock except as may be purchased in this offering.

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<PAGE>

Before this offering, there has been no public market for our common
stock. The initial public offering price will be determined through
negotiations between our company and the representatives. The factors
considered in determining the initial public offering price, in addition to
prevailing market conditions, are

. price-to-revenues ratios of publicly traded companies that the
representatives believe to be comparable to our company,

. certain financial information of our company,

. the history of, and the prospects for, our company and the
industry in which it competes,

. an assessment of our management, our past and present operations,
the prospects for, and timing of, future revenues of our company,

. the present state of our development, and

. the above factors in relation to market values and various
valuation measures of other companies engaged in activities
similar to our company.

We expect our common stock to be approved for listing on the Nasdaq
National Market, subject to notice of issuance, under the symbol "CARI."
However, there can be no assurance that an active trading market will develop
for our common stock or that our common stock will trade in the public market
subsequent to the offering at or above the initial public offering price.

The underwriters do not expect sales of the common stock to any accounts
over which they exercise discretionary authority to exceed 5% of the number of
shares of common stock being offered in this offering.

We have agreed to indemnify the underwriters against, or to contribute to
payments the underwriters may be required to make in respect of certain
liabilities, including certain liabilities under the Securities Act.

Until the distribution of the shares of common stock is completed, rules
of the Securities and Exchange Commission may limit the ability of the
underwriters and certain selling group members to bid for and purchase our
common stock. As an exception to these rules, the representatives are permitted
to engage in certain transactions that stabilize the price of our common stock.
These transactions may include bids or purchases for the purpose of pegging,
fixing or maintaining the price of our common stock.

If the underwriters create a short position in our common stock in
connection with the offering, i.e., if they sell a larger number of shares of
common stock than are set forth on the cover page of this prospectus, the
representatives may reduce that short position by purchasing common stock in
the open market. The representatives may also elect to reduce any short
position by exercising all or part of the over-allotment option described
above.

The representatives may also impose a penalty bid on certain underwriters
and selling group members. This means that if the representatives purchase
shares of common stock in the open market to reduce the underwriters' short
position or to stabilize the price of our common stock, they may reclaim the
amount of the selling concession from the underwriters and selling group
members who sold those shares as part of this offering.

If the representatives purchase the common stock to stabilize the price
or to reduce the underwriters' short position, the price of our common stock
could be higher than it might be in the absence of such purchases. The
imposition of a penalty bid might also have an effect on the price of our
common stock to the extent that it discourages resales of our common stock.

Neither our company nor any of the underwriters makes any representation
or prediction as to the direction or magnitude of any effect that any of the
transactions described above may have on the price of the

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<PAGE>

common stock. In addition, neither our company nor any of the underwriters
makes any representation that the representatives will engage in such
transactions or that such transactions, once commenced, will not be
discontinued without notice.

Merrill Lynch, from time to time, performs investment banking and other
financial services for our company, Synetic and affiliates of each of these
companies.

We will pay all of the expenses of the offering, excluding underwriting
discounts, and we estimate that these expenses will be approximately
$1,000,000.

LEGAL MATTERS

The validity of the shares of common stock offered hereby will be passed
upon for us by Shearman & Sterling, New York, New York. Certain legal matters
in connection with the offering will be passed upon for the Underwriters by
Brown & Wood LLP. Shearman & Sterling is a limited partner in SN Investors,
L.P. SN Investors is a limited partnership the general partner of which is
SYNC, Inc., whose sole stockholder is Martin J. Wygod, Chairman of our company
and Synetic. SN Investors currently holds 5,061,857 shares of Synetic common
stock.

EXPERTS

The audited financial statements of CareInsite, Inc., Avicenna Systems
Corporation and Med-Link Technologies, Inc. included in this registration
statement have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
giving said reports.

The audited financial statements of The Health Information Network
Connection, LLC included in this registration statement have been audited by
KPMG LLP, independent public accountants, as indicated in their report with
respect thereto, and are included herein in reliance upon the authority of said
firm as experts in giving said report.

The statements of law under the caption "Risk Factors -- Government
regulation of the Internet or healthcare e-commerce services could adversely
affect our business" and under the caption "Business --Government Regulation"
in this prospectus are based upon the opinion of Kegler, Brown, Hill & Ritter
Co., L.P.A., Columbus, Ohio, special regulatory counsel to the Company. Robert
D. Marotta, Esq., of counsel to such firm, holds 75,000 options to purchase
Synetic common stock.

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<PAGE>

ADDITIONAL INFORMATION

We have filed with the Commission a registration statement on Form S-1
under the Securities Act with respect to the shares of common stock offered
hereby. For the purposes hereof, the term "registration statement" means the
original registration statement and any and all amendments thereto. This
prospectus does not contain all of the information set forth in the
registration statement and the exhibits and schedules thereto. For further
information with respect to our company and such common stock, reference is
hereby made to such registration statement, including exhibits thereto, which
can be inspected and copied at the public reference facilities maintained by
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Regional Offices of the Commission at Seven World Trade Center, New York, New
York 10048 and 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material can also be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. The address of such site is
http://www.sec.gov.

Statements contained in the prospectus as to the contents of any contract
or other document are not necessarily complete, and in each instance reference
is made to the copy of such contract or other document filed as an exhibit to
the registration statement, each such statement being qualified in all respects
by such reference.

We are not currently subject to the informational requirements of the
Exchange Act. As a result of the offering of our common stock, we will become
subject to the reporting requirements of the Exchange Act. We intend to furnish
our stockholders with annual reports containing consolidated financial
statements audited by independent certified public accountants.

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<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
CareInsite, Inc. (a Development Stage Company)
Report of Independent Public Accountants................................ F-2
Consolidated Balance Sheets at June 30, 1997 and 1998 and March 31, 1999
(unaudited)............................................................ F-3
Consolidated Statements of Operations for the Period from Inception
(December 24, 1996) through June 30, 1997, the Year Ended June 30,
1998, the Nine Months Ended March 31, 1998 and 1999 (unaudited) and
Cumulative from Inception (December 24, 1996) through March 31, 1999
(unaudited)............................................................ F-5
Consolidated Statements of Changes in Stockholders' Equity for the
Period from Inception (December 24, 1996) through June 30, 1997, the
Year Ended June 30, 1998 and the Nine Months Ended March 31, 1999
(unaudited)............................................................ F-6
Consolidated Statements of Cash Flows for the Period from Inception
(December 24, 1996) through June 30, 1997, the Year Ended June 30,
1998, the Nine Months Ended March 31, 1998 and 1999 (unaudited) and
Cumulative from Inception (December 24, 1996) through March 31, 1999
(unaudited)............................................................ F-7
Notes to Consolidated Financial Statements.............................. F-8

Avicenna Systems Corporation (a Development Stage Company, acquired on
December 24, 1996)--Predecessor Business
Report of Independent Public Accountants................................ F-20
Statements of Operations for the Year Ended December 31, 1995, the
Period from January 1, 1996 through December 23, 1996 and Cumulative
from Inception (September 20, 1994) through December 23, 1996.......... F-21
Statements of Changes in Redeemable Convertible Preferred Stock and
Stockholder's Deficit for the Period from Inception (September 20,
1994) through December 31, 1994, the Year Ended December 31, 1995 and
the Period from January 1, 1996 through December 23, 1996.............. F-22
Statements of Cash Flows for the Year Ended December 31, 1995, the
Period from January 1, 1996 through December 23, 1996 and Cumulative
from Inception (September 20, 1994) through December 23, 1996.......... F-23
Notes to Financial Statements........................................... F-24

The Health Information Network Connection, LLC (a Development Stage
Company)--A company in which we own a minority equity interest
Independent Auditors' Report............................................ F-29
Balance Sheet at December 31, 1998...................................... F-30
Statements of Operations for the Year Ended December 31, 1998 and the
Cumulative Period from Inception (November 12, 1996) to December 31,
1998................................................................... F-31
Statements of Members' Deficit for the Period from Inception (November
12, 1996) to December 31, 1997 and the Year Ended December 31, 1998.... F-32
Statements of Cash Flows for the Year Ended December 31, 1998 and the
Cumulative Period from Inception (November 12, 1996) to December 31,
1998................................................................... F-33
Notes to Financial Statements........................................... F-34
Med-Link Technologies, Inc.--A company we acquired on May 24, 1999
Reports of Independent Public Accountants............................... F-41
Balance Sheets at December 31, 1997, October 15, 1998, December 31, 1998
and March 31, 1999 (unaudited)......................................... F-43
Statements of Operations and Parent Company's Investment and Advances
for the Year Ended December 31, 1996 and 1997, for the Period from
January 1, 1998 through October 15, 1998, for the Period from October
16, 1998 through December 31, 1998 and for the Three Months Ended March
31, 1998 and 1999 (unaudited).......................................... F-44
Statements of Cash Flows for the Year Ended December 31, 1996 and 1997,
for the Period from January 1, 1998 through October 15, 1998, for the
Period from October 16, 1998 through December 31, 1998 and for the
Three Months Ended March 31, 1998 and 1999 (unaudited)................. F-45
Notes to Financial Statements........................................... F-46
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

After CareInsite, Inc. amends its Certificate of Incorporation to
increase the number of authorized common shares to 300,000,000 and authorize
30,000,000 shares of preferred stock and effects a 50.0625-for-1 stock split,
we expect to be in a position to render the following audit report.

Arthur Andersen LLP

Roseland, New Jersey
March 17, 1999

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To CareInsite, Inc.:

We have audited the accompanying consolidated balance sheets of
CareInsite, Inc. (a Delaware corporation in the development stage) and
subsidiary (formerly Synetic Healthcare Communications, Inc.) as of June 30,
1997 and 1998, and the related consolidated statements of operations, changes
in stockholder's equity and cash flows for the period from Inception (December
24, 1996) through June 30, 1997 and for the year ended June 30, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of CareInsite, Inc.
and subsidiary as of June 30, 1997 and 1998, and the results of their
operations and their cash flows for the period from Inception (December 24,
1996) through June 30, 1997 and for the year ended June 30, 1998 in conformity
with generally accepted accounting principles.

F-2
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

CONSOLIDATED BALANCE SHEETS
(in thousands)

ASSETS

<TABLE>
<CAPTION>
June 30,
--------------- March 31,
1997 1998 1999
------ ------- -----------
(unaudited)
<S> <C> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents....................... $ 246 $ 315 $ 5,058
Note receivable................................. -- 2,000 --
Other current assets............................ 72 220 554
------ ------- -------
Total current assets.......................... 318 2,535 5,612
------ ------- -------
PROPERTY, PLANT AND EQUIPMENT:
Leasehold improvements.......................... 366 681 701
Machinery and equipment......................... 1,244 2,826 2,914
Furniture and fixtures.......................... 171 371 388
------ ------- -------
1,781 3,878 4,003
Less: Accumulated depreciation.................. (184) (1,025) (1,740)
------ ------- -------
Property, plant and equipment, net.............. 1,597 2,853 2,263
------ ------- -------
CAPITALIZED SOFTWARE
DEVELOPMENT COSTS............................... 348 4,972 31,330
OTHER ASSETS:
Intangible assets, net of accumulated
amortization of $405, $1,214 and $1,618 at June
30, 1997 and 1998 and March 31, 1999,
respectively................................... 1,213 404 --
Investments..................................... -- -- 4,668
Other........................................... -- 69 62
------ ------- -------
Total other assets............................ 1,213 473 4,730
------ ------- -------
$3,476 $10,833 $43,935
====== ======= =======
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-3
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
June 30,
------------------ March 31,
1997 1998 1999
-------- -------- -----------
(unaudited)
<S> <C> <C> <C>
CURRENT LIABILITIES
Accounts payable............................. $ 265 $ 594 $ 247
Accrued liabilities.......................... 1,645 1,166 1,023
-------- -------- --------
Total current liabilities.................. 1,910 1,760 1,270
-------- -------- --------
DEFERRED INCOME TAXES.......................... -- 1,275 1,415
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 30,000,000
shares authorized; none-issued and
outstanding................................. -- -- --
Common stock, $.01 par value; authorized
300,000,000 shares; 50,062,500 shares issued
and outstanding at June 30, 1997 and 1998,
and 62,500,000 shares issued and outstanding
at March 31, 1999........................... 501 501 625
Paid-in capital.............................. 53,422 69,989 108,798
Stock subscription receivable................ (10,000) (10,000) --
Deficit accumulated during the development
stage....................................... (42,357) (52,692) (68,173)
-------- -------- --------
Total stockholders' equity................... 1,566 7,798 41,250
-------- -------- --------
$ 3,476 $ 10,833 $ 43,935
======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-4
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

<TABLE>
<CAPTION>
Period From Cumulative
Inception From Inception
(Dec 24, 1996) Nine Months (Dec 24, 1996)
Through June Year Ended Ended March 31, Through
30, June 30, ----------------- March 31,
1997 1998 1998 1999 1999
-------------- ---------- ------- -------- --------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Service revenue (related
party)................. $ -- $ -- $ -- $ 213 $ 213
Costs and expenses:
Cost of services
(related party)...... -- -- -- 213 213
Research and
development.......... 7,652 4,762 3,976 8,720 21,134
Sales and marketing... 1,150 1,733 1,232 1,427 4,310
General and
administrative....... 1,379 3,887 2,589 2,944 8,210
Litigation costs...... -- -- -- 2,500 2,500
Other income, net..... (9) (47) (7) (110) (166)
Acquired in-process
research and
development.......... 32,185 -- -- -- 32,185
-------- -------- ------- -------- --------
42,357 10,335 7,790 15,694 68,386
-------- -------- ------- -------- --------
Net loss................ $(42,357) $(10,335) $(7,790) $(15,481) $(68,173)
======== ======== ======= ======== ========
Net loss per share --
basic and diluted..... $ (0.85) $ (0.21) $ (0.16) $ (0.29) $ (1.33)
======== ======== ======= ======== ========
Weighted average
shares outstanding --
basic and diluted... 50,063 50,063 50,063 54,208 51,444
======== ======== ======= ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-5
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(in thousands)

<TABLE>
<CAPTION>
Common Stock
------------- Deficit
Number Stock Accumulated Total
of Paid-In Subscription During the Stockholders'
Shares Amount Capital Receivable Development Stage Equity
------ ------ -------- ------------ ----------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Capitalization at
Inception, December 24,
1996................... 50,063 $501 $ 9,499 $(10,000) $ -- $ --
Pushdown of Avicenna
acquisition............ -- -- 28,817 -- -- 28,817
Pushdown of CareAgents
acquisition............ -- -- 3,250 -- -- 3,250
Net loss................ -- -- -- -- (42,357) (42,357)
Capital contributions
from parent............ -- -- 11,856 -- -- 11,856
------ ---- -------- -------- -------- --------
Balance, June 30, 1997.. 50,063 501 53,422 (10,000) (42,357) 1,566
Net loss................ -- -- -- -- (10,335) (10,335)
Capital contributions
from parent............ -- -- 16,567 -- -- 16,567
------ ---- -------- -------- -------- --------
Balance, June 30, 1998.. 50,063 501 69,989 (10,000) (52,692) 7,798
Settlement of stock
subscription receivable
(unaudited)............ -- -- -- 10,000 -- 10,000
Equity issued to Cerner
(unaudited)............ 12,437 124 20,676 -- -- 20,800
Issuance of warrants to
THINC (unaudited)...... -- -- 1,700 -- -- 1,700
Net loss (unaudited).... -- -- -- -- (15,481) (15,481)
Capital contributions
from parent
(unaudited)............ -- -- 16,433 -- -- 16,433
------ ---- -------- -------- -------- --------
Balance, March 31, 1999
(unaudited)............ 62,500 $625 $108,798 $ -- $(68,173) $ 41,250
====== ==== ======== ======== ======== ========
</TABLE>

The accompanying notes are an integral part of these consolidated statements.

F-6
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

<TABLE>
<CAPTION>
Period From
Inception Nine Months Cumulative
(December 24, Year Ended From Inception
1996) Through Ended March 31, (December 24, 1996)
June 30, June 30, ----------------- Through March 31,
1997 1998 1998 1999 1999
------------- -------- ------- -------- -------------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from
operating activities:
Net loss $(42,357) $(10,335) $(7,790) $(15,481) $(68,173)
Adjustments to
reconcile net loss to
net cash used in
operating activities:
Write-off of acquired
in-process purchased
research and
development costs.... 32,185 -- -- -- 32,185
Write-off of acquired
intellectual property
and software
technologies......... 5,228 -- -- -- 5,228
Depreciation and
amortization......... 589 1,650 1,086 1,119 3,358
Write-off of
capitalized software
costs................ -- -- -- 2,381 2,381
Net loss from
investment in
unconsolidated
affiliate............ -- -- -- 212 212
Changes in operating
assets and
liabilities, net of
the effects of
acquisitions:
Other assets.......... 61 (217) (292) (187) (343)
Accounts payable...... (241) 329 (87) (347) (259)
Accrued liabilities... (476) (479) (911) (144) (1,099)
-------- -------- ------- -------- --------
Net cash used in
operating
activities.......... (5,011) (9,052) (7,994) (12,447) (26,510)
-------- -------- ------- -------- --------
Cash flows used in
investing activities:
Purchases of property,
plant & equipment.... (1,023) (2,097) (777) (124) (3,244)
Software development
costs................ (348) (4,624) (2,540) (7,769) (12,741)
Investment in
unconsolidated
affiliate............ -- -- -- (1,350) (1,350)
-------- -------- ------- -------- --------
Net cash used in
investing
activities.......... (1,371) (6,721) (3,317) (9,243) (17,335)
-------- -------- ------- -------- --------
Cash flows provided by
financing activities:
Proceeds from
subscription
receivable........... -- -- -- 10,000 10,000
Capital contribution
from parent.......... 6,628 15,842 11,309 16,433 38,903
-------- -------- ------- -------- --------
Net cash provided by
financing
activities.......... 6,628 15,842 11,309 26,433 48,903
-------- -------- ------- -------- --------
Net increase in cash
and cash equivalents.. 246 69 (2) 4,743 5,058
Cash and cash
equivalents, beginning
of period............. -- 246 246 315 --
-------- -------- ------- -------- --------
Cash and cash
equivalents, end of
period................ $ 246 $ 315 $ 244 $ 5,058 $ 5,058
======== ======== ======= ======== ========
Supplemental
information for non-
cash investing and
financing activities:
Pushdown of Avicenna
acquisition from
parent................ $ 28,817 -- -- -- $ 28,817
======== ======== ======= ======== ========
Pushdown of CareAgents
acquistion from
parent................ $ 3,250 -- -- -- $ 3,250
======== ======== ======= ======== ========
Contribution of
acquired intellectual
property and software
technologies from
parent................ $ 5,228 -- -- -- $ 5,228
======== ======== ======= ======== ========
Contribution of note
receivable from
parent................ -- $ 2,000 $ 2,000 -- $ 2,000
======== ======== ======= ======== ========
Issuance of equity for
software technology
licensed from Cerner.. -- -- -- $ 20,800 $ 20,800
======== ======== ======= ======== ========
Conversion of note
receivable into a
stock investment...... -- -- -- $ 2,000 $ 2,000
======== ======== ======= ======== ========
Issuance of warrants
for an investment in
THINC................. -- -- -- $ 1,700 $ 1,700
======== ======== ======= ======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.

F-7
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Nature of Operations and Summary of Significant Accounting Policies:

The Company--

On December 24, 1996, Synetic, Inc. ("Synetic" or the "Parent") acquired
Avicenna Systems Corporation (a Development Stage Company -- "Avicenna" -- See
Note 2), a privately held company that marketed and built Intranets for managed
healthcare plans, integrated healthcare delivery systems and hospitals. The
acquisition of Avicenna marked the Inception of Synetic's healthcare electronic
commerce business. On January 23, 1997, Synetic acquired CareAgents, Inc.
("CareAgents" -- See Note 2), a privately held company engaged in developing
Internet-based clinical commerce applications. On November 24, 1998, Synetic
formed Synetic Healthcare Communications, Inc., which was subsequently renamed
CareInsite, Inc. (the "Company"). On January 2, 1999, Synetic contributed the
stock of CareAgents to Avicenna. Concurrently, Avicenna contributed the stock
of CareAgents and substantially all of Avicenna's other assets and liabilities
to the Company (the "Formation"). Synetic also agreed to contribute $10,000,000
in cash to the Company, which amount was subsequently funded. The Formation has
been accounted for using the carryover basis of accounting and the Company's
financial statements include the accounts and operations of Avicenna and
CareAgents for all periods presented from the date each entity was acquired.
Upon Formation, the Certificate of Incorporation provided for authorized
capital stock consisting of 10,000,000 shares of common stock, $.01 par value
and 1,000,000 shares were subsequently issued. The shares issued in connection
with the Formation reflect the 50.0625-for-1 stock split of the common stock to
be effected in the form of a stock dividend to be declared and paid prior to
the closing of the initial public offering ("IPO") of the Company's common
stock. All references in the financial statements to shares, share prices, per
share amounts and warrants have been adjusted retroactively for the 50.0625-
for-1 stock split.

The Company is in the development stage. The Company intends to provide a
broad range of healthcare electronic commerce services which will leverage
Internet technology to improve communication among physicians, payers,
suppliers and patients. The provision of products and services using Internet
technology in the healthcare electronic commerce industry is subject to risks,
including but not limited, to those associated with competition from existing
companies offering the same or similar services, uncertainty with respect to
market acceptance of its products and services, rapid technological change,
management of growth, availability of future capital and minimal previous
record of operations or earnings.

In October 1998, the Company entered into agreements in principle with
The Health Information Network Connection LLC ("THINC") and Cerner Corporation
("Cerner").

THINC--

In January 1999, the Company, THINC, and THINC founding members, Greater
New York Hospital Association, Empire Blue Cross and Blue Shield, Group Health
Incorporated ("GHI"), and HIP Health Plans entered into definitive agreements
and consummated a transaction for a broad strategic alliance. Under this
arrangement, among other things, the Company (i) acquired a 20% ownership
interest in THINC in exchange for $1,500,000 and a warrant to purchase an
aggregate of 4,059,118 shares of common stock of the Company, (ii) agreed to
extend up to $2,000,000 and $1,500,000 in senior loans to THINC, (iii) entered
into a Management Services Agreement with THINC pursuant to which the Company
will manage all operations of THINC, including, providing THINC with certain
content and messaging services, (iv) licensed to THINC content and messaging
services for use over the THINC network and (v) entered into Clinical
Transaction Agreements with each of Empire, GHI and HIP (the "THINC Payers") to
provide online prescription and

F-8
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

laboratory transaction services. The Company's Clinical Transaction Agreement
with GHI specifies that the Company does not have the right to provide
prescription communication services to GHI unless either the Company enters
into an agreement with GHI's pharmacy benefit manager outlining a methodology
for the implementation of such services or GHI elects to proceed without such
an agreement. GHI's current pharmacy benefit manager is Merck-Medco, a company
with whom the Company is currently involved in litigation (See Note 8). To
date, the Company has not entered into any such agreement with Merck-Medco and
GHI has not made such election.

As part of this arrangement, THINC entered into Managed Care Transaction
Contracts with each of the THINC Payers whereby the THINC Payers agreed to use
the THINC network for their online medical claims submission, eligibility,
benefit plan detail, roster distribution, remittance advice distribution,
claims inquiry, referral/pre-certification and authorization, and encounter
submission transactions.

The warrant issued to THINC is exercisable 180 days following the
occurrence of an initial public offering ("IPO") of the Company's common stock
or, if an IPO has not occurred, at the end of term of the warrant. The exercise
price per share of the warrant is the lesser of (i) the price per share of
common stock issued in the IPO, if an IPO has occurred, and (ii) $4.00 per
share. The warrant expires on January 1, 2006, subject to certain exceptions.
The warrant and the shares of the Company's common stock issuable upon the
exercise of the warrant are subject to certain restrictions on transfer. The
estimated fair value of the warrant at the date issued was approximately
$1,700,000, as determined using the Black-Scholes option pricing model. The
Company will account for its investment in THINC using the equity method of
accounting. The carrying value of the Company's investment in THINC exceeds its
pro rata share of the net assets of THINC. This excess of $2,880,000 will be
amortized over a ten-year period. Summarized information for THINC is as
follows:

<TABLE>
<CAPTION>
March 31, 1999
------------------
<S> <C>
Current assets........................................ $ 615,000
Noncurrent assets..................................... 4,767,000
Current liabilities................................... 4,664,000
Noncurrent liabilities................................ 2,331,000
<CAPTION>
Three Months Ended
March 31, 1999
------------------
<S> <C>
Net revenues.......................................... $ 4,000
Net loss.............................................. (1,245,000)
</TABLE>

Assuming CareInsites' investment in THINC had been consummated on July 1,
1997, net loss and net loss per share for the year ended June 30, 1998 and the
nine months ended March 31, 1999 would have been $(11,089,000) or $(0.22) per
share and $(15,962,000) or $(0.29) per share, respectively. This pro forma
information is not necessarily indicative of what would actually have occurred
if the investment had been made on July 1, 1997, nor is it intended to be a
projection of future results.

Cerner--

In January 1999, the Company also entered into definitive agreements and
consummated a transaction with Cerner for a broad strategic alliance. Cerner, a
publicly traded corporation, is a supplier of clinical and management
information systems for healthcare organizations. Under this arrangement, the
Company, among other things, obtained a perpetual software license to the
functionality embedded in Cerner's Health Network

F-9
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Architecture ("HNA") including HNA Millennium Architecture in exchange for a
19.9% equity interest in the Company (such equity interest is subject to
certain restrictions on transfer and other adjustments). In addition, the
Company has issued to Cerner a warrant to purchase up to 1,008,445 shares of
common stock at $4.00 per share, exercisable only in the event THINC exercises
its warrant. Also, the Company will issue to Cerner 2,503,125 additional shares
of common stock on or after February 15, 2001 at $.01 per share in the event
the Company has achieved a stated level of physician participation by 2001. The
software acquired from Cerner was valued at approximately $20,800,000 based on
the value of the equity consideration as determined using an income approach
valuation methodology. A ten year forecast of revenues and costs was prepared
with the resulting cash flows reduced by working capital and capital
expenditures and then discounted to present value based on a weighted average
discount rate of 30%. Additionally, because the shares issued to Cerner have no
ready market and contain restrictions on transferability, a 15% lack of
marketability discount was applied. In connection with the Company's strategic
relationship with Cerner, the Company sold Cerner a beneficial interest to 2%
of THINC. As beneficial owner Cerner will receive any dividends, income and
liquidation or disposition proceeds related to their 2% interest. However, the
Company will remain the owner of record, will exercise voting rights and will
have the right to sell, transfer, exchange, encumber, or otherwise dispose of
this 2% interest. Cerner has also agreed to fund $1,000,000 of the Company's
$2,000,000 senior loan to THINC. Additionally, the Company and Cerner entered
into a Marketing Agreement that allows for the marketing and distribution of
the Company's services to the physicians and providers associated with more
than 1,000 healthcare organizations who currently utilize Cerner's clinical and
management information system. In addition, Cerner committed to make available
engineering and systems architecture personnel and expertise to accelerate the
deployment of the Company's services, as well as ongoing technical support and
future enhancements to HNA.

Principles of Consolidation--

The accompanying consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiary, CareAgents, after elimination
of all significant intercompany accounts and transactions.

Interim Financial Information--

Information for the nine months ended March 31, 1998 and 1999 is
unaudited and has been prepared on the same basis as the audited financial
statements and includes all adjustments, consisting only of normal recurring
adjustments that management considers necessary for a fair presentation of the
Company's operating results for such periods. Results for the nine months ended
March 31, 1999 are not necessarily indicative of results to be expected for the
full fiscal year 1999 or for any future period.

Fair Value of Financial Instruments--

The carrying amounts of cash and cash equivalents and note receivable
approximate fair value because of the short-term maturity of these instruments.

Cash and Cash Equivalents--

The Company considers all investment instruments with a maturity of three
months or less from the date of purchase to be the equivalent of cash for
purposes of balance sheet presentation and for the consolidated statements of
cash flows.

F-10
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Property, Plant and Equipment--

Property, plant and equipment are stated at cost. For financial reporting
purposes, depreciation is provided principally on the straight-line method over
the estimated useful lives of the assets. Annual depreciation rates range from
20% to 33% for leasehold improvements and from 10% to 33% for machinery and
equipment and furniture and fixtures. Expenditures for maintenance, repair and
renewals of minor items are charged to operations as incurred. Major
betterments are capitalized.

Capitalized Software Development Costs--

The Company capitalizes costs incurred for the production of computer
software for use in the sale of each of its products and services. The
Company's products and services include prescription communication services,
laboratory communication services, managed care services (which include claims
services, eligibility services and referral and pre-certification authorization
services), content services and messaging services. Costs capitalized include
direct labor and related overhead for software produced by the Company and the
costs of software licensed from third parties related to each of its products
and services. All costs in the software development process which are
classified as research and development are expensed as incurred until
technological feasibility has been established. Once technological feasibility
has been established, such software development costs are capitalized until the
software is commercially available. Such costs are recorded at the lower of
unamortized cost or net realizable value. As of June 30, 1997, June 30, 1998
and March 31, 1999, capitalized internally generated costs were $348,000,
$4,368,000 and $4,353,000, respectively. As of June 30, 1998 and March 31,
1999, amounts capitalized for software licensed from vendors were $604,000 and
$26,977,000, respectively. There were no capitalized costs for software
licensed from third party vendors as of June 30, 1997. Software licensed from
vendors include amounts capitalized related to the perpetual software licenses
obtained from Cerner.

The Company abandoned its development efforts with respect to certain of
its products and services. Those efforts were abandoned as a result of
encountering a high risk development issue associated with integrating those
products and services with the acquired Cerner technology. Accordingly, the
capitalized software costs related to these products and services in the amount
of $2,381,000 were written off in December 1998 and included in research and
development expenses in the nine-month period ended March 31, 1999.

For the period from inception (December 24, 1996) through June 30, 1997,
$5,228,000 of costs associated with the acquisitions of certain intellectual
property and software technologies was expensed as research and development as
technological feasibility had not been reached.

Long-Lived Assets--

In accordance with Statement of Financial Accounting Standard ("SFAS")
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," the Company continually evaluates whether events and
circumstances have occurred that indicate the remaining estimated useful life
of long-lived assets requires revision or that all or a portion of the
remaining balance may not be recoverable. Management does not believe that any
such events or changes in circumstances have occurred.

F-11
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Accrued Liabilities--

Accrued liabilities consisted of the following (in thousands):

<TABLE>
<CAPTION>
June 30
-------------
1997 1998
------ ------
<S> <C> <C>
Accrued payroll and benefit costs........................... $ 233 $ 408
Accrued software costs...................................... -- 400
Accrued acquisition costs................................... 1,256 109
Accrued consulting.......................................... 25 154
Other....................................................... 131 95
------ ------
Total................................................... $1,645 $1,166
====== ======
</TABLE>

Revenue Recognition--

The Company recognizes revenues from the management services it provides
to THINC. Revenues are recognized as the services are performed.

Income Taxes--

The Company accounts for income taxes pursuant to SFAS 109, "Accounting
for Income Taxes", which uses the liability method to calculate deferred income
taxes.

The Company is included in the consolidated federal income tax return of
Synetic. The accompanying consolidated statements of operations reflect income
taxes as if the Company filed a separate tax return.

Net Loss Per Share--

Basic net loss per share and diluted net loss per share are presented in
conformity with SFAS No. 128, "Earnings per Share" and SEC Staff Accounting
Bulletin No. 98 ("SAB 98"). Under SFAS No. 128 and SAB 98, basic net loss per
share is computed by dividing net income by the weighted-average number of
common shares outstanding for the period. In accordance with SAB 98, the
Company has determined that there were no nominal issuances of the Company's
common stock prior to the proposed IPO. The calculation of diluted net loss per
share excludes shares of common stock issuable upon exercise of employee stock
options as the effect of such exercises would be anti-dilutive. Common shares
outstanding and per share amounts reflect the Formation and are considered
outstanding from inception.

Accounting for Stock-Based Compensation--

The Company accounts for its stock-based employee compensation agreements
in accordance with the provisions of Accounting Principles Board Opinion No.
25.

Use of Estimates--

F-12
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

Recently Issued Accounting Standards--

In June 1997, the Financial Accounting Standards Board, (FASB), issued
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information." The Company is required to adopt SFAS No. 131 for its year ending
June 30, 1999. SFAS No. 131 requires disclosure of certain information
regarding operating segments, products and services, geographic areas of
operation and major customers. Adoption of SFAS No. 131 is expected to have no
material impact on the Company's financial condition or results of operations.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." The Company is required to adopt SFAS No.
133 for its year ending June 30, 2000. SFAS No. 133 establishes methods of
accounting for derivative financial instruments and hedging activities related
to those instruments as well as other hedging activities. Because the Company
currently holds no derivative financial instruments and does not currently
engage in hedging activities, adoption of SFAS No. 133 is expected to have no
material impact on the Company's financial condition or results of operations.

In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position, or "SOP," 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use." SOP 98-1 requires
that entities capitalize certain costs related to internal-use software once
certain criteria have been met. The Company is required to implement SOP 98-1
for the year ending June 30, 2000. Adoption of SOP 98-1 is expected to have no
material impact on the Company's financial condition or results of operations.

In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position or "SOP" 98-5, "Reporting on the Costs of Start-Up
Activities." SOP 98-5 requires that entities expense start-up costs as
incurred. The Company is required to implement SOP 98-5 for the year ending
June 30, 2000. Adoption of SOP 98-5 is expected to have no material impact on
the Company's financial condition or results of operations.

(2) Acquisitions:

Avicenna--

On December 24, 1996, Synetic acquired the outstanding equity and
indebtedness (including employee stock options) of Avicenna, a privately-held
company located in Cambridge, Massachusetts, for 428,643 shares of Synetic's
common stock and 161,015 shares of Synetic's common stock to be issued in
connection with the exercise of employee stock options. The shares issued were
subject to certain limitations restricting the liquidity and transferability of
such shares. The fair value of the shares as determined by management, was
approximately $47.37 per share. A discount was applied to the market value of
Synetic stock to reflect the limitations restricting the liquidity and
transferability of such shares to arrive at this amount. The acquisition was
accounted for using the purchase method with the purchase price being allocated
to assets acquired and liabilities assumed based on their fair values.

F-13
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

A summary of the purchase price allocation is as follows (in thousands):

<TABLE>
<S> <C>
Cash.............................................................. $ 42
Short-term investments............................................ 240
Other assets...................................................... 216
Property, plant and equipment..................................... 759
Purchased research and development................................ 28,600
Intangible assets................................................. 1,502
Goodwill.......................................................... 116
Accounts payable.................................................. (507)
Accrued liabilities............................................... (2,151)
-------
$28,817
=======
</TABLE>

The intangible assets of $1,502,000 represent the estimated fair market
value of Avicenna's existing technical staff. The amount allocated to technical
staff was determined based on the estimated costs to recruit, train and develop
a replacement workforce. The significant assumptions include salary and benefit
levels and expected employee turnover rate. The amount allocated to acquired
in-process research and development of $28,600,000 was determined using
established valuation techniques. Remaining amounts have been allocated to
goodwill and were amortized over a two-year period.

CareAgents--

On January 23, 1997, Synetic acquired CareAgents for 106,029 shares of
Synetic's common stock. The shares issued were subject to certain limitations
restricting the liquidity and transferability of such shares. The fair value of
the shares as determined by management, was approximately $30.65 per share. A
discount was applied to the market value of Synetic stock to reflect the two-
year limitation restricting the liquidity and transferability of such shares to
arrive at this amount. CareAgents was an early development stage company
focused on Internet-based clinical commerce applications. The acquisition was
accounted for using the purchase method with the purchase price being allocated
to the assets acquired, purchased research and development of $3,585,000 and
liabilities assumed of $335,000, based on their fair values. The amount
allocated to purchased research and development of $3,585,000 was determined
using established valuation techniques.

Acquired In-Process Research and Development--

In connection with the acquisitions of Avicenna and CareAgents, an
allocation of the purchase price was made to acquired in-process research and
development. The estimates of fair value for the purchased research and
development are primarily the responsibility of management. These amounts have
been expensed on the respective acquisition dates as the in-process research
and development had not reached technological feasibility and had no
alternative future use. A description of the acquired in-process research and
development and the estimates made are as follows:

Avicenna--

The amount allocated to acquired in-process research and development of
$28,600,000 was determined based on an income approach valuation methodology.
The valuation projected revenue and costs over a nine year period with
profitability commencing in three years and increasing steadily through year
nine. The

F-14
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

assumptions on which the projections were based are subject to a high degree of
uncertainty. The more significant uncertainties were those regarding the timing
and extent of the estimated revenues associated with this technology as well as
the estimated costs to complete the development. A nine year forecast of
revenues and costs attributable to the acquired technology was prepared. The
nine year projection period was consistent with the expected useful life of the
Intranets under development. The resulting operating cash flows were then
reduced by working capital and capital expenditures and discounted to present
value based upon a discount rate of 30%.

Avicenna was in the early stages of its development and the systems under
development had not yet reached technological feasibility. There was no
alternative future use for the technology then developed.

Avicenna had incurred approximately $1,263,000 in research and
development costs to develop the technology to its then current status.
Significant costs remained to complete the technological capabilities of its
product line and then migrate those capabilities to a new business model
envisioned by Synetic.

CareAgents--

The entire purchase price of $3,585,000 was assigned to acquired in-
process purchased research and development. The purchase price allocation to
acquired in-progress research and development was determined based on an income
approach methodology. The assumptions on which the projections were based are
subject to a high degree of uncertainty. The more significant uncertainties
were those regarding the timing and extent of the estimated revenues associated
with this technology as well as the estimated costs to complete the
development, as the company was in its initial stages of development. A nine
year forecast of revenues and costs attributable to the acquired technology was
prepared. The nine year projection period was consistent with the expected
useful life of the Intranets under development. The resulting operations cash
flows were then reduced by working capital and capital expenditures and
discounted to present value based upon a discount rate of 50%.

CareAgents' technology was in the very early stages of development with
basic user requirements, a business plan, preliminary system architecture with
process flow diagrams and prototyping efforts comprising the work completed to
date. Substantial costs remained to mature the technology to the point of
technological feasibility and then complete for first product deployment. No
work had been completed on a detailed engineering design or on building or
testing any substantive code.

(3) Stockholders' Equity:

Included in capital contributions from parent for the period from
Inception (December 24, 1996) through June 30, 1997 is $5,228,000 of rights to
certain intellectual property and software technologies purchased by Synetic to
be utilized in the development of the Company's healthcare communications
business.

Included in capital contributions from parent for the year ended June 30,
1998 is an assignment by Synetic of rights to an 8% Senior Convertible Note for
$2,000,000 from a privately held company (See Note 7).

F-15
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(4) Income Taxes:

Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. At
June 30, 1998 and March 31, 1999, deferred tax liabilities of $1,275,000 and
$1,415,000, respectively, primarily relate to software development costs
capitalized for financial reporting purposes and expensed for tax purposes.

For the period from inception (December 24, 1996) through January 2,
1999, the tax benefits associated with net operating losses generated by the
Company were retained by Synetic. Accordingly, no tax benefit has been or will
be reflected in the accompanying financial statements for these net operating
losses.

(5) Stock Options:

The Company expects to adopt a stock option plan covering its employees,
officers and directors, and certain consultants, agents and key contractors.
The Company intends to grant stock options under this plan to certain
employees, officers and directors in connection with an IPO of the Company's
common stock. The Company intends to grant such stock options at fair market
value.

Historically, the employees of the Company have participated in the stock
option plans of Synetic. These plans provide for both non-qualified and
incentive stock options. Generally, options granted under these plans become
exercisable at a rate of 20% on each annual anniversary of the grant and expire
within ten to fifteen years from the date of the grant and have an exercise
price equal to 100% of the fair market value of Synetic's common stock on the
date of grant.

Synetic has elected to follow APB No. 25 in accounting for its employee
stock options. Accordingly, no compensation cost has been recognized for option
plans. Had the determination of compensation costs for employees of the Company
who participated in the stock option plans of Synetic been based on the fair
value at the grant dates for awards under these plans, consistent with the
method of SFAS No. 123, the Company's net loss would have been $(45,570,000)
and $(20,340,000) and basic and diluted loss per share would have been $(0.91)
and $(0.41) for the period from Inception (December 24, 1996) through June 30,
1997 and for the year ended June 30, 1998, respectively. At June 30, 1998, the
Company's employees had 4,173,444 and 717,739 of Synetic's stock options
outstanding and exercisable, respectively.

The pro forma results are not intended to be indicative of or a
projection of future results.

The fair value of each option grant is estimated on the date of grant by
using the Black-Scholes option-pricing model. The following weighted average
assumptions were used:

<TABLE>
<CAPTION>
1997 1998
----------- ----------
<S> <C> <C>
Expected dividend yield......................... 0% 0%
Expected volatility............................. .2722 .2986
Risk-free interest rates........................ 6.5% 6.3%
Expected option lives (years)................... .083 - 1.74 .50 - 2.00
Weighted average fair value of options granted
during the year................................ $ 10.11 $ 13.10
</TABLE>

F-16
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

(6) Related Party Transactions:

Tax Sharing Agreement--

Upon completion of the offering, the Company will cease to file a
consolidated federal income tax return with Synetic, but will continue to file
a combined tax return with Synetic for California income tax purposes. The
Company and Synetic will enter into a tax sharing agreement providing that, for
periods prior to the offering and during which the Company was included in
Synetic's consolidated federal income tax returns, the Company will be required
to pay Synetic an amount equal to our federal income tax liabilities for these
periods, determined as if the Company had filed federal income tax returns on a
separate company basis. Additionally, for periods both before and after the
offering, in situations where the Company files a combined return with Synetic
for state income tax purposes, such as for California, the Company will be
required to pay Synetic an amount equal to the Company's state income tax
liabilities, determined as if the Company had filed state income tax returns on
a separate company basis. If the Company experiences a net operating loss
resulting in no federal or state income tax liability for a taxable period in
which it was included in Synetic's consolidated federal or combined state
income tax returns, the Company will be entitled to a payment from Synetic
equal to the reduction, if any, in the federal or state income tax liability of
the Synetic consolidated group by reason of the use of the Company's net
operating loss. Further, under the tax sharing agreement, if the Company
receives a net tax benefit for certain equity based compensation arrangements
involving Synetic stock, or for the payment by Synetic of certain litigation
expenses and damages pursuant to the terms of an indemnification agreement
between the Company and Synetic as described below, then the Company is
required to pay an amount equal to those tax benefits to Synetic when they are
actually realized by the Company. The tax sharing agreement also will provide
for Synetic to conduct tax audits and tax controversies on the Company's behalf
for periods, and with respect to returns, in which the Company is included in
the Synetic consolidated or combined returns.

Services Agreement--

The Company and Synetic have entered into a services agreement dated as
of January 1, 1999, pursuant to which Synetic will provide the Company with
certain administrative services which may include payroll, accounting, business
development, legal, tax, executive services and information processing and
other similar services. The Company will pay the actual costs of providing
these services. Such costs will include an allocable portion of the
compensation and other related expenses of employees of Synetic who serve as
officers of the Company. This agreement will be terminable by either party upon
60 days prior written notice in certain events, or by Synetic, at any time, if
Synetic ceases to own at least 50% of the voting stock of the Company. The
services agreement shall terminate by its terms, if not previously terminated
or renewed, on January 1, 2004.

Allocations from Synetic to the Company were $230,000, $836,000, $562,000
and $747,000 for the period from Inception (December 24, 1996) through June 30,
1997, for the fiscal year ended June 30, 1998 and for the nine months ended
March 31, 1998 and 1999, respectively. The allocation was calculated based on
the estimated time the Synetic employees worked providing services to the
Company.

Indemnification Agreement--

The Company and Synetic will enter into an indemnification agreement,
under the terms of which the Company will indemnify and hold harmless Synetic,
on an after tax basis, with respect to any and all claims,

F-17
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

losses, damages, liabilities, costs and expenses that arise from or are based
on the operations of the business of the Company before or after the date of
the consummation of the offering. Similarly, Synetic will indemnify and hold
harmless the Company, on an after tax basis, with respect to any and all
claims, losses, damages, liabilities, costs and expenses that arise from or are
based on the operations of Synetic other than the business of the Company
before or after the date of the consummation of the offering. With respect to
the Merck litigation, this agreement provides that Synetic will bear both the
actual costs of conducting the litigation and any monetary damages that may be
awarded to Merck and Merck-Medco in the litigation. The Company will record any
amounts funded by Synetic as a capital contribution. The agreement further
provides that any damages awarded to the Company and Synetic in the litigation
will be for the account of Synetic. Finally, the agreement provides that
Synetic shall not be responsible for any losses suffered by CareInsite
resulting from any equitable relief obtained by Merck-Medco against CareInsite,
including, but not limited to, any lost profits, other losses, damages,
liabilities, or costs or expenses arising from such equitable relief.

(7) Note Receivable:

On March 24, 1998 Synetic loaned a privately held company ("Debtor")
$2,000,000 under an 8% Senior Convertible Note due March 23, 1999 (the "Note").
In connection with the formation of the Company, Synetic assigned its rights
under the Note to the Company. In January, 1999, Debtor was acquired by another
privately held company ("Successor"). In connection with this acquisition, the
Company elected to convert the Note into 291,952 shares of Successor's Series B
Preferred Stock ("Preferred"). The Preferred is convertible into common stock
(i) at the Company's option any time after the anniversary date of issuance,
and (ii) automatically immediately prior to an IPO of Successor. In 1999, the
Successor filed a registration statement for an IPO. The Preferred is included
in investments on the March 31, 1999 consolidated balance sheet.

(8) Commitments and Contingencies:

Legal Proceedings--

On February 18, 1999, Merck & Co., Inc. and Merck-Medco Managed Care,
L.L.C. filed a complaint in the Superior Court of New Jersey against the
Company, Synetic, Martin J. Wygod, Chairman of the Company and Synetic, and
three officers and/or directors of the Company and Synetic, Paul C. Suthern,
Roger C. Holstein and Charles A. Mele. The plaintiffs assert that the Company,
Synetic and the individual defendants are in violation of certain non-
competition, non-solicitation and other agreements with Merck and Merck-Medco,
and seek to enjoin the Company and them from conducting the Company's
healthcare e-commerce business and from soliciting Merck-Medco's customers. The
Synetic and Wygod agreements provide an expiration date of May 24, 1999. Mr.
Suthern's, Mr. Mele's and Mr. Holstein's agreements expire in December 1999,
March 2000 and September 2002, respectively.

A hearing was held on March 22, 1999 on an application for preliminary
injunction filed by Merck and Merck-Medco. On April 15, 1999, the Superior
Court denied this application. The Company believes that Merck's and Merck-
Medco's positions in relation to it and the individual defendants are without
merit and the Company intends to vigorously defend the litigation. However, the
outcome of complex litigation is uncertain and cannot be predicted at this
time. Any unanticipated adverse result could have a material adverse effect on
the Company's financial condition and results of operations.

The Company has recorded $2,500,000 in litigation costs associated with
the Merck and Merck-Medco litigation for the nine months ended March 31, 1999.

F-18
<PAGE>

CAREINSITE, INC.
(a Development Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)

Leases--

The Company leases office space and equipment under various
noncancellable operating leases. Rental expense was $270,000 and $1,241,000 for
the period from Inception (December 24, 1996) through June 30, 1997 and for the
fiscal year ended June 30, 1998, respectively. The minimum aggregate rental
commitments under noncancellable leases, excluding renewal options, are as
follows (in thousands):

<TABLE>
<CAPTION>
Years ending June 30,
---------------------
<S> <C>
1999.............................................................. $1,270
2000.............................................................. 1,229
2001.............................................................. 1,207
2002.............................................................. 805
Thereafter........................................................ --
</TABLE>

(9) Subsequent Event

On May 24, 1999, the Company completed the acquisition of Med-Link
Technologies, Inc. ("Med-Link"), a provider of electronic data interchange
services based in Somerset, New Jersey. Med-Link had net sales of approximately
$3,076,000 for the twelve months ended December 31, 1998. The purchase price
for the outstanding capital stock of Med-Link was $14,000,000 in cash. The
acquisition was funded through the sale of 875,000 shares of common stock at a
price of $16.00 per share for total proceeds of $14,000,000. Of these 875,000
shares sold, Parent purchased 700,875 shares and Cerner purchased 174,125
shares. The acquisition will be accounted for using the purchase method of
accounting.

F-19
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Avicenna Systems Corporation:

We have audited the accompanying statements of operations, changes in
redeemable convertible preferred stock and stockholder's deficit and cash flows
of Avicenna Systems Corporation (a Massachusetts corporation in the development
stage) for the year ended December 31, 1995, for the period from January 1,
1996 through December 23, 1996 and for the period from inception (September 20,
1994) through December 23, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the results of operations and cash flows of
Avicenna Systems Corporation for the year ended December 31, 1995, for the
period from January 1, 1996 through December 23, 1996 and for the period from
inception (September 20, 1994) through December 23, 1996 in conformity with
generally accepted accounting principles.

Arthur Andersen LLP

Roseland, New Jersey
February 22, 1999

F-20
<PAGE>

AVICENNA SYSTEMS CORPORATION
(a Development Stage Company)
(Predecessor Business)

STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)

<TABLE>
<CAPTION>
Cumulative from
Period from Inception
January 1, (September 20,
Year Ended 1996 Through 1994) Through
December 31, December 23, December 23,
1995 1996 1996
------------ ------------ ---------------
<S> <C> <C> <C>
Revenue............................. $ -- $ 20 $ 20
----- ------- -------
Operating expenses
Research and development.......... 86 1,161 1,263
Sales and marketing............... 12 1,297 1,318
General and administrative........ 69 860 936
----- ------- -------
Total operating expenses............ 167 3,318 3,517
----- ------- -------
Net loss............................ $(167) $(3,298) $(3,497)
===== ======= =======
Preferred stock dividends........... -- (241) (241)
----- ------- -------
Net loss applicable to common
stockholder........................ $(167) $(3,539) $(3,738)
===== ======= =======
Net loss per share applicable to
common stockholder --basic and
diluted............................ $(.44) $ (9.34) $ (9.86)
===== ======= =======
Weighted average common shares
outstanding -- basic and diluted... 379 379 379
===== ======= =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-21
<PAGE>

AVICENNA SYSTEMS CORPORATION
(a Development Stage Company)
(Predecessor Business)

STATEMENTS OF CHANGES IN REDEEMABLE CONVERTIBLE
PREFERRED STOCK AND STOCKHOLDER'S DEFICIT
(in thousands)

<TABLE>
<CAPTION>
Redeemable Convertible
Preferred Stock Stockholder's Deficit
------------------------ -----------------------------------------
Deficit
Common Accumulated
Stock Additional During the Total
Number of Carrying Number Carrying Paid-In Development Stockholder's
Shares Value of Shares Value Capital Stage Deficit
----------- ----------- --------- -------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Initial capitalization,
September 20, 1994..... -- $ -- 379 $ 4 $-- $ (4) $ --
Net loss................ -- -- -- -- -- (32) (32)
---------- ----------- --- --- --- ------- -------
Balance, December 31,
1994................... -- -- 379 4 -- (36) (32)
Sales of Series A
redeemable convertible
preferred stock, net of
issuance costs......... 450 1,350 -- -- -- (38) (38)
Capital contributed in
connection with
repayment of
stockholder loans...... -- -- -- -- 32 -- 32
Net loss................ -- -- -- -- -- (167) (167)
---------- ----------- --- --- --- ------- -------
Balance, December 31,
1995................... 450 1,350 379 4 32 (241) (205)
Sales of Series A
redeemable convertible
preferred stock........ 583 1,750 -- -- -- -- --
Preferred stock
dividends.............. -- 241 -- -- -- (241) (241)
Net loss................ -- -- -- -- -- (3,298) (3,298)
---------- ----------- --- --- --- ------- -------
Balance, December 23,
1996................... 1,033 $ 3,341 379 $ 4 $32 $(3,780) $(3,744)
========== =========== === === === ======= =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-22
<PAGE>

AVICENNA SYSTEMS CORPORATION
(a Development Stage Company)
(Predecessor Business)

STATEMENTS OF CASH FLOWS
(in thousands)

<TABLE>
<CAPTION>
Cumulative From
Period From Inception
January 1, 1996 (September 20, 1994)
Year Ended Through Through
December 31, 1995 December 23, 1996 December 23, 1996
----------------- ----------------- --------------------
<S> <C> <C> <C>
Cash flows from
operating activities:
Net loss............. $ (167) $(3,298) $(3,497)
Adjustments to
reconcile net loss
to net cash used in
operating
activities:
Depreciation........ 2 136 138
Changes in current
assets and
liabilities
Accounts payable.... -- 496 507
Accrued expenses.... 45 35 80
Accounts
receivable......... -- (84) (84)
Customer deposits... -- 79 79
Other............... (8) (21) (29)
------ ------- -------
Net cash used in
operating
activities........ (128) (2,657) (2,806)
------ ------- -------
Cash flows used in
investing activities:
Purchase of property
and equipment....... (136) (760) (896)
Increase in other
assets.............. (11) (99) (110)
------ ------- -------
Net cash used in
investing
activities......... (147) (859) (1,006)
------ ------- -------
Cash flows from financ-
ing activities:
Proceeds from
stockholder loans... 111 -- 132
Payments of
stockholder loans... (100) -- (100)
Proceeds from
issuance of 7%
demand note......... -- 1,000 1,000
Proceeds from sale of
redeemable
convertible
preferred stock,
net................. 1,312 1,750 3,062
------ ------- -------
Net cash provided by
financing
activities......... 1,323 2,750 4,094
------ ------- -------
Net increase/(decrease)
in cash and cash
equivalents........... 1,048 (766) 282
Cash and cash
equivalents, beginning
of period............. -- 1,048 --
------ ------- -------
Cash and cash
equivalents, end of
period................ $1,048 $ 282 $ 282
------ ------- -------
Supplemental Disclosure
of Noncash Investing
and Financing
Activities:
Contribution of loan
payable to
stockholder to
capital............. $ 32 $ -- $ 32
====== ======= =======
</TABLE>

The accompanying notes are an integral part of these statements.

F-23
<PAGE>

AVICENNA SYSTEMS CORPORATION
(a Development Stage Company)
(Predecessor Business)

NOTES TO FINANCIAL STATEMENTS

(1) Nature of Operations and Summary of Significant Accounting Policies:

The Company--

Avicenna Systems Corporation (the "Company") was incorporated on
September 20, 1994 to develop Internet technology based systems for healthcare
organizations. Prior to December 15, 1995, the Company operated as an S
Corporation for federal and state income tax purposes. On December 24, 1996,
all of the outstanding equity and indebtedness (including employee stock
options) of the Company were acquired by Synetic, Inc.

The Company is in the development stage and is devoting substantially all
of its efforts toward product research and development. The Company is subject
to a number of risks similar to those of other development companies,
including the development of commercially viable products, competition from
substitute products and larger companies, and the ability to obtain adequate
additional financing necessary to fund product development.

The accompanying financial statements reflect the application of certain
accounting practices as described in this note and elsewhere in the notes to
the financial statements. Financial statements prepared in conformity with
generally accepted accounting principles require the use of estimates. Actual
results could vary from estimates.

Reclassifications--

Certain reclassifications have been made to prior year amounts to conform
to current year presentation.

Depreciation--

The Company provides for depreciation by charges to operations in amounts
that allocate the cost of property and equipment on a straight-line basis over
their estimated useful lives of 3 years for computers and equipment and 5
years for furniture and fixtures.

Loan Payable to Stockholder--

Through December 31, 1994, a stockholder of the Company advanced the
Company approximately $21,000 for operating expenses incurred in 1994. During
1995, this stockholder advanced the Company an additional amount of
approximately $111,000. These advances were non-interest-bearing. Upon the
closing of the sale of the Series A redeemable convertible preferred stock,
$100,000 of these advances was repaid, and the remaining balance of
approximately $32,000 was contributed to capital.

Research and Development--

The Company has evaluated the establishment of technological feasibility
of its products in accordance with Statement of Financial Accounting Standards
("SFAS") No. 86, Accounting for the Costs of Computer Software To Be Sold,
Leased or Otherwise Marketed. All costs in the software development process
which are classified as research and development are expensed as incurred
until technological possibility has been established. The Company defines the
technological feasibility as the completion of a working model. The time

F-24
<PAGE>

AVICENNA SYSTEMS CORPORATION
(a Development Stage Company)
(Predecessor Business)

NOTES TO FINANCIAL STATEMENTS--(Continued)

period during which costs could be capitalized from the point of researching
technological feasibility until the time of general product release is very
short, and consequently, the amounts that could be capitalized are not material
to the Company's financial position or results of operations. Therefore, the
Company has charged all such costs to research and development in the period
incurred.

Net Loss Per Share--

Basic and diluted net loss per share is based on the average number of
shares outstanding during the year. Diluted loss per share is the same as basic
as the inclusion of common stock equivalents would be antidilutive.

Accounting for Stock-Based Compensation--

The Company accounts for its stock-based employee compensation agreements
in accordance with the provisions of Accounting Principles Board Opinion No.
25.

(2) Income Taxes:

The Company provides for income taxes in accordance with SFAS No. 109,
Accounting for Income Taxes. Under the liability method specified by SFAS No.
109, a deferred tax asset or liability is determined based on the difference
between the financial statement and the tax bases of assets and liabilities, as
measured by the enacted tax rates assumed to be in effect when those
differences reverse.

Prior to December 15, 1995 the Company elected to be taxed as an S
Corporation for federal and state income tax purposes.

As of December 23, 1996 the Company had a net operating loss carryforward
of approximately $1.2 million. A full valuation allowance has been recorded
against the Company's deferred tax asset as of December 23, 1996, as the
ultimate realization of this asset is not assured.

(3) Convertible Demand Notes:

In October 1996, the Company entered into an agreement with the majority
of the holders of the Series A Preferred Stock (the Purchasers) to sell to the
Purchasers, on a pro rata basis and from time to time over a period of six
months, up to $3,000,000 of the Company's Convertible Demand Notes (the Demand
Notes). The interest rate for each of these notes is 7%. In conjunction with
the issuance of each note, the Company has agreed to issue to each of the
Purchasers a warrant to purchase additional Equity Securities. The aggregate
exercise price of the warrant is equal to 25% of the principal amount of each
note sold to the Purchasers. As of December 23, 1996, the Company has issued a
total of $1,000,000 of Demand Notes with accompanying warrants. The warrants
expire at the earliest to occur of (i) either the sale of the Company, (ii) the
effective date of an initial public offering of any stock or security of the
Company, or (iii) the third anniversary of the closing date of the Additional
Sale.

(4) Redeemable Convertible Preferred Stock:

The Company has 1,066,667 authorized shares of preferred stock, all of
which have been designated as Series A Redeemable Convertible Preferred Stock
(Series A Preferred Stock). The Company has reserved

F-25
<PAGE>

AVICENNA SYSTEMS CORPORATION
(a Development Stage Company)
(Predecessor Business)

NOTES TO FINANCIAL STATEMENTS--(Continued)

1,066,667 shares of common stock related to the conversion of Series A
Preferred Stock. On December 15, 1995 the Company sold 450,000 shares of Series
A Preferred Stock for $3.00 per share. The issuance resulted in gross proceeds
to the Company of $1,350,000. The holders of the Series A Preferred Stock were
also given the right to purchase up to an additional 583,333 shares of Series A
Preferred Stock. In February 1996, the Company issued an additional 15,000
shares of Series A Preferred Stock at $3.00 per share, and in June 1996 the
Company issued an additional 568,334 shares of Series A Preferred Stock at
$3.00 per share. These issuances resulted in gross proceeds to the Company of
approximately $1,750,000. The rights, preferences and privileges of the holders
of the Series A Preferred Stock are as follows:

Dividends--

Each holder of Series A Preferred Stock is entitled to receive, when and
if declared by the Board of Directors, quarterly dividends at the annual rate
of $0.24 per share. These dividends, whether or not earned or declared, are
cumulative. At December 23, 1996, total dividends in arrears were $240,900.

Conversion--

Each share of Series A Preferred Stock is convertible at any time into
common stock at the exchange rate in effect at the time of the conversion,
currently a one-to-one exchange rate, and is subject to appropriate
adjustments, as defined. In addition, any accumulated dividends are convertible
into common stock at the then current conversion rate. Conversion is automatic
upon the closing of a public stock offering of common stock in which the
aggregate proceeds to the Company are at least $10,000,000 and the price per
share is at least $15.00.

Voting--

Each holder of Series A Preferred Stock is entitled to the number of
votes equal to the number of shares of common stock into which such preferred
stock is then currently convertible.

Liquidation--

In the event of liquidation, the holders of the Series A Preferred Stock
are entitled to receive a liquidation preference equal to $3.00 per share plus
any amount of declared but unpaid dividends, including the cumulative
dividends. Any remaining assets will be distributed on a pro rata basis among
the holders of common stock, as defined.

Redemption--

The Company is required to offer to redeem, on a pro rata basis, the
shares of Series A Preferred Stock at the rate of 25% per annum beginning
December 31, 2000 and on each succeeding anniversary date until all shares are
redeemed, at the rate of $3.00 per share plus all declared but unpaid
dividends, excluding the cumulative dividends. The redemption requirement is
waived if less than 60% of the holders of Series A Preferred Stock accept the
offer. If the Company has insufficient funds to redeem the shares at the
redemption date, then the Company is required to use available funds at the end
of each succeeding quarter or quarters to meet redemption requirements.

F-26
<PAGE>

AVICENNA SYSTEMS CORPORATION
(a Development Stage Company)
(Predecessor Business)

NOTES TO FINANCIAL STATEMENTS--(Continued)

(5) Stockholder's Deficit:

Restricted Stock Agreement--

The Company's founder and sole common stockholder and the holders of the
Series A Preferred Stock have entered into a restricted stock agreement whereby
the Company has the right to repurchase all of the founder's common stock
unless certain length of employment conditions are met. The restriction
provides that as of December 31, 1995, 25% of the shares have become
unrestricted under the agreement. The lapsing of the restriction of an
additional 25% occurred in June 1996, at the time of the second closing of the
Series A Preferred Stock. The lapsing of the restriction will continue under
the agreement at the rate of 3.125% per quarter for the next 16 quarters
following December 31, 1995, unless employment is terminated for any reason.
The lapsing of the restriction will accelerate by 75% of unrestricted shares in
the event of a sale or merger of the Company involving a change of more than
50% of the Company's voting stock or a sale of substantially all of the
Company's assets.

(6) Stock Options:

In 1995, the Company adopted the 1995 Stock Option Plan (the 1995 Plan).
Under the 1995 Plan, stock options, consisting of either incentive stock
options or non qualified stock options, may be granted to directors, officers,
employees and consultants of the Company to purchase shares of the Company's
common stock at no less than the fair market value of the Company's common
stock at the grant date. Options become exercisable at the rate of 25% per year
on the anniversary date of the grant and generally expire 10 years from the
date the option is granted. In the event of (i) a sale or merger of the Company
involving a change of more than 50% of the voting stock, (ii) a sale of
substantially all of the Company's assets, or (iii) a liquidation of the
Company, as defined, unvested options shall be subject to accelerated vesting.
Upon the occurrence of such an event, 75% of all unvested options shall
immediately vest, provided that the Series A Preferred Stockholders receive a
certain minimum rate of return on their investment, as defined. As of December
23, 1996, the Company had reserved 716,800 shares of common stock for issuance
under its 1995 Plan. A summary of activity under the 1995 Plan is as follows:

<TABLE>
<CAPTION>
Number of Exercise Price
Shares Per Share
--------- --------------
<S> <C> <C>
Balance, December 31, 1994........................ -- $ --
Granted......................................... 106,176 0.30
-------
Balance, December 31, 1995........................ 106,176 0.30
Granted......................................... 566,396 0.30
-------
Balance, December 23, 1996........................ 672,572 0.30
=======
Exercisable, December 23, 1996.................... 50,244 $0.30
=======
</TABLE>

The Company has elected to follow APB No. 25 in accounting for its
employee stock options. Accordingly, no compensation cost has been recognized
for its stock option plan. Had compensation costs been based on the fair value
method of SFAS No. 123, the Company's net loss would have been $(181,000) for
the year ended December 31, 1995 and $(3,580,000) for the period from January
1, 1996 through December 23, 1996 and basic and diluted net loss applicable to
common stockholder would have been $(.48) for the year ended December 31, 1995
and $(9.45) for the period from January 1, 1996 through December 23, 1996.

F-27
<PAGE>

AVICENNA SYSTEMS CORPORATION
(a Development Stage Company)
(Predecessor Business)

NOTES TO FINANCIAL STATEMENTS--(Continued)

The pro forma results indicated above are not intended to be indicative
of or a projection of future results.

The fair value of each option grant is estimated on the date of grant by
using the Black-Scholes Option Pricing model using the following weighted
average assumptions: risk free interest rate of 6.5% and an expected option
life (in years) of 5 years.

(7) Commitments:

The Company began conducting its operations in leased facilities in 1996.
The operating lease on this facility expires in January 1999. However, in
October 1996, the Company entered into an operating lease for additional office
space, and sublet its original leased facility in its entirety at full cost.
The new lease expires in July 2001. The future minimum rental payments are
approximately as follows:

<TABLE>
<CAPTION>
Gross Net
Minimum Sublease Minimum
Rental Income Rental
---------- -------- --------
<S> <C> <C> <C>
1997.......................................... $ 66,000 $ 50,000 $ 16,000
1998.......................................... 251,000 54,000 197,000
1999.......................................... 201,000 4,000 197,000
2000.......................................... 197,000 -- 197,000
2001.......................................... 197,000 -- 197,000
Thereafter.................................... 115,000 -- 115,000
---------- -------- --------
$1,027,000 $108,000 $919,000
========== ======== ========
</TABLE>

F-28
<PAGE>

INDEPENDENT AUDITORS' REPORT

To The Health Information Network Connection, LLC:

We have audited the accompanying balance sheet of The Health Information
Network Connection, LLC (the Company) (a development stage company) as of
December 31, 1998, and the related statements of operations, members' deficits
and cash flows for the year then ended and for the period from November 12,
1996 (inception) to December 31, 1998. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of The Health
Information Network Connection, LLC as of December 31, 1998 and the results of
its operations and its cash flows for the year then ended and for the period
from November 12, 1996 to December 31, 1998 in conformity with generally
accepted accounting principles.

KPMG LLP

Melville, New York
February 26, 1999

F-29
<PAGE>

THE HEALTH INFORMATION NETWORK
CONNECTION, LLC
(a Development Stage Company)

BALANCE SHEET

<TABLE>
<CAPTION>
December
31, 1998
-----------
<S> <C>
Assets
Current assets:
Cash and cash
equivalents.............. $ 5,122
Due from Empire Blue Cross
and Blue Shield.......... 60,000
Due from employees........ 7,764
Other assets.............. 1,581
-----------
Total current assets.... 74,467
Property and equipment,
net........................ 2,769,822
Restricted cash............. 420,000
Organization costs, net of
accumulated amortization of
$43,187 at
December 31, 1998.......... 64,902
Security deposits........... 103,455
-----------
Total assets............ $ 3,432,646
===========
Liabilities and Members'
Deficit
Current liabilities:
Accounts payable.......... $ 1,439,029
Accrued expenses.......... 267,993
Current installments of
obligations under capital
leases................... 722,406
Notes payable to members.. 1,200,000
Current portion of note
payable to BRC........... 41,747
Amount due to BRC......... 50,000
Deferred revenue.......... 846,750
-----------
Total current
liabilities............ 4,567,925
Obligations under capital
leases, net of current
portion.................... 1,657,869
Note payable to BRC, net of
current portion............ 458,253
Due to member -- HIP........ 443,100
-----------
Total liabilities....... 7,127,147
-----------
Commitments and
contingencies
Members' deficit:
Members' capital
contributed................ 4,346,201
Deficit accumulated during
the development stage...... (7,790,702)
-----------
(3,444,501)
Less subscription
receivables.............. (250,000)
-----------
Total members' deficit.. (3,694,501)
-----------
Total liabilities and
members' deficit....... $ 3,432,646
===========
</TABLE>

See accompanying notes to financial statements.

F-30
<PAGE>

THE HEALTH INFORMATION NETWORK
CONNECTION, LLC
(a Development Stage Company)

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Cumulative
period from
inception
Year Ended (November 12,
December 1996) to
31, December 31,
----------- -------------
1998 1998
----------- -------------
<S> <C> <C>
Revenues:
Consulting revenues from related party............ $ -- $ 25,000
Interest income................................... 23,055 46,700
Other income...................................... 6,535 6,535
----------- -----------
Total revenues.................................. 29,590 78,235
Expenses:
Salaries and employee benefits.................... 1,607,739 2,162,247
Technical costs -- BRC............................ 427,184 1,122,831
Professional fees................................. 302,041 470,911
Sales and marketing............................... 166,901 307,802
Software maintenance fees......................... 135,996 396,167
General and administrative........................ 835,612 1,317,552
Interest.......................................... 374,067 588,927
Depreciation and amortization..................... 1,016,887 1,502,500
----------- -----------
Total expenses.................................. 4,866,427 7,868,937
----------- -----------
Net loss........................................ $(4,836,837) $(7,790,702)
=========== ===========
</TABLE>

See accompanying notes to financial statements.

F-31
<PAGE>

THE HEALTH INFORMATION NETWORK
CONNECTION, LLC
(a Development Stage Company)

STATEMENTS OF MEMBERS' DEFICIT

<TABLE>
<CAPTION>
Deficit
Accumulated
Members' Less During
Capital Subscription Development
Contributed Receivables Stage Total
----------- ------------ ----------- ----------
<S> <C> <C> <C> <C>
Balance at inception
(November 12, 1996)....... $ -- $ -- $ -- $ --
Initial capital
subscriptions due from
members................... 3,750,000 (3,750,000) -- --
Payment on subscriptions... -- 400,000 -- 400,000
Net loss for the period
from inception to December
31, 1996.................. -- -- (54,762) (54,762)
--------- ----------- ---------- ----------
Balance at December 31,
1996...................... 3,750,000 (3,350,000) (54,762) 345,238
Payment on subscriptions... -- 2,100,000 -- 2,100,000
Capital contribution from
GNYHA..................... 91,201 -- -- 91,201
Net loss................... -- -- (2,899,103) (2,899,103)
--------- ----------- ---------- ----------
Balance at December 31,
1997...................... 3,841,201 (1,250,000) (2,953,865) (362,664)
Payment on subscriptions... -- 1,000,000 -- 1,000,000
Repurchase of BRC's
membership interest....... (500,000) -- -- (500,000)
Capital contribution from
members................... 1,005,000 -- -- 1,005,000
Net loss................... -- -- (4,836,837) (4,836,837)
--------- ----------- ---------- ----------
Balance at December 31,
1998...................... 4,346,201 (250,000) (7,790,702) (3,694,501)
========= =========== ========== ==========
</TABLE>

See accompanying notes to financial statements

F-32
<PAGE>

THE HEALTH INFORMATION NETWORK
CONNECTION, LLC
(a Development Stage Company)

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Cumulative
period from
inception
(November 12,
Year ended 1996) to
December 31, December 31,
1998 1998
------------ -------------
<S> <C> <C>
Cash flows from operating activities:
Net loss........................................... $(4,836,837) $(7,790,702)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization...................... 1,016,887 1,502,500
Change in assets and liabilities:
Due from BCBS..................................... (60,000) (60,000)
Due from employees................................ 578 (7,764)
Other assets...................................... 31,375 (105,036)
Due to member--BRC................................ (479,933) 50,000
Accounts payable and accrued expenses............. 1,364,137 1,707,022
Deferred revenue.................................. 636,750 846,750
----------- -----------
Net cash used in operating activities............ (2,327,043) (3,857,230)
----------- -----------
Cash flows from investing activities:
Purchase of equipment.............................. (864,563) (1,011,009)
Organizational costs............................... -- (108,089)
Sale of short-term investment...................... 20,716 --
----------- -----------
Net cash used in investing activities............ (843,847) (1,119,098)
----------- -----------
Cash flows from financing activities:
Principal payments on capital lease obligations.... (531,250) (837,851)
Advance from member--HIP........................... 12,600 443,100
Decrease (increase) in restricted cash............. 3,994 (420,000)
Capital contributions and cash received from
payment of subscriptions.......................... 2,005,000 4,596,201
Proceeds from (repayment of) notes payable......... 1,200,000 1,200,000
----------- -----------
Net cash provided by financing activities........ 2,690,344 4,981,450
----------- -----------
(Decrease) increase in cash and cash equivalents.... (480,546) 5,122
Cash and cash equivalents at beginning of period.... 485,668 --
----------- -----------
Cash and cash equivalents at end of period.......... $ 5,122 $ 5,122
=========== ===========
Supplemental disclosures of cash flow information:
Capital lease obligations incurred for the purchase
of equipment...................................... $ 807,611 $ 3,018,126
=========== ===========
Cash paid during period for interest............... $ 329,115 $ 541,475
=========== ===========
Repurchase of membership interest in exchange for
note payable...................................... $ 500,000 $ 500,000
=========== ===========
</TABLE>

See accompanying notes to financial statements.

F-33
<PAGE>

THE HEALTH INFORMATION NETWORK
CONNECTION, LLC
(a Development Stage Company)

NOTES TO FINANCIAL STATEMENTS

(1) Summary of Significant Accounting Policies and Practices:

(a) Description of Business and Basis of Presentation

The Health Information Network Connection, LLC ("THINC" or the "Company")
was established as a New York Limited Liability Company (LLC) on November 12,
1996. THINC was organized for the development of a community health information
network (CHIN) for the metropolitan New York, New Jersey and Connecticut
region. THINC plans to provide software and technical support which will
facilitate the exchange of healthcare information in the metropolitan New York
area, allowing providers and payers to access their patients' clinical and
insurance-related information through their desktop computers. It will allow
hospitals, continuing care facilities, physicians, laboratories, and third
party payers to exchange business and patient care data through a private
electronic "intranet" system.

THINC is a joint venture originally owned by the following institutions:
Greater New York Hospital Association (GNYHA), Group Health Incorporated (GHI),
Health Insurance Plan of Greater New York (HIP), Empire Blue Cross and Blue
Shield (BCBS), and BRC Health Care of Dallas, Texas (BRC) (until June 22,
1998). THINC had entered into a service agreement with BRC to provide technical
personnel. On June 22, 1998, THINC and BRC agreed to terminate this agreement
and THINC repurchased BRC's membership interest (note 2). As a limited
liability corporation, the liability of each member is limited to the amount of
each members' capital contribution.

As of December 31, 1998, THINC has entered into software license and
network services agreements with the following institutions: Beth Israel
Medical Center, New York University Medical Center, New York Downtown Hospital,
Hospital for Joint Diseases Orthopedic Institute, and Lenox Hill Hospital.
During 1998, the Company received $636,750 from Beth Israel Medical Center
pursuant to a software license and network services agreement. During 1997, the
Company received $210,000 from the other institutions pursuant to the terms of
the applicable agreements. Such amounts have been reflected as deferred revenue
in the accompanying balance sheet. Such amounts will be recorded as revenue
upon acceptance of the health care information systems by the institutions.

The efforts of THINC during 1996 were devoted to financing organizational
costs and developing a business and marketing plan. The focus of its efforts
during 1997 and 1998 have shifted to establishing technical operations and
building a client base. Since no revenue has been generated from THINC's
planned principal operations, the accompanying financial statements are
presented under the guidelines stipulated by the Financial Accounting Standards
Board, Statement of Financial Accounting Standards (SFAS) No. 7, "Accounting
and Reporting by Development Stage Enterprises."

The Company has suffered operating losses since inception and the
Company's current liabilities exceeded total current assets by $4,493,458 at
December 31, 1998. Management believes that as a result of its agreement with
CareInsite, Inc. (note 9), the Company will have adequate working capital to
continue its operations through at least January 1, 2000.

(b) Use of Estimates

The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reports amounts of assets and liabilities

F-34
<PAGE>

THE HEALTH INFORMATION NETWORK
CONNECTION, LLC
(a Development Stage Company)

NOTES TO FINANCIAL STATEMENTS--(Continued)

and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those estimates.

THINC considers all highly liquid investments with maturities of three
months or less when purchased to be cash equivalents.

Cash equivalents of $420,000 at December 31, 1998 consist of certificates
of deposit with an initial term of less than three months and is included in
restricted cash in the accompanying balance sheet.

(d) Property and Equipment

Property and equipment, including purchased software costs, are stated at
cost. Plant and equipment under capital leases are stated at the present value
of minimum lease payments.

Depreciation of plant and equipment is calculated on the straight-line
method over the estimated useful lives of the assets. Plant and equipment held
under capital leases and leasehold improvements are amortized straight line
over the shorter of the lease term or the estimated useful life of the asset.
THINC periodically reviews its long-lived assets to assess recoverability and
to ensure the carrying values of such long-lived assets have not been impaired.

All costs in the software development process which includes
customization of the purchased networking software from HNV (note 2) are
expensed as incurred until technological feasibility of the software product
has been established. The Company defines technological feasibility as the
completion of a working model. Through December 31, 1998, the Company has not
completed or fully installed a working model and, accordingly, all development
costs have been expensed and all funds received from the health care
institutions to date have been deferred.

(e) Organization Costs

Organizational costs consist of legal and other professional fees
incurred to establish THINC as a New York limited liability company and are
being amortized over five years on a straight line basis.

In April 1998, the AICPA Accounting Standards Executive Committee issued
Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities"
(SOP 98-5). SOP 98-5 requires that costs incurred during start-up activities,
including organization costs, be expensed as incurred. This statement is
effective for annual financial statements issued for fiscal years beginning
after December 15, 1998. The implementation of SOP 98-5 will result in the
write-off of the unamortized balance of capitalized organizational costs,
amounting to $64,902 in the first quarter of 1999.

(f) Income Taxes

THINC has elected to be treated as a partnership for income tax purposes
and as such the tax liability on all income earned or the tax benefit of
operating losses accrue to the members as owners of THINC.

F-35
<PAGE>

THE HEALTH INFORMATION NETWORK
CONNECTION, LLC
(a Development Stage Company)

NOTES TO FINANCIAL STATEMENTS--(Continued)

(g) Revenue Recognition

The Company recognizes revenue in accordance with Statement of Position
97-2, Software Revenue Recognition. Accordingly, revenue from the license of
software will be recognized when the software is delivered, installed and
accepted by the customer, the fee is fixed and determinable and collection of
the resulting receivable is deemed probable. Software maintenance and network
access fees will be deferred and recognized as revenue ratably over the term of
the applicable contract. Service revenue and training fees are recognized when
the services and training, respectively, are performed. Deferred revenue
represents payments received upon signing of the software license and network
services agreements but for which the software has not yet been accepted by the
customer. Such amounts are subject to refund if the product is not ultimately
accepted by the customer.

(h) Fair Value of Financial Instruments

The fair value of the Company's capital lease obligations and note
payable to BRC are estimated using discounted cash flow analyses, based upon
the Company's estimated current incremental borrowing rate for similar types of
securities. For all other financial instruments, the carrying value
approximates fair value due to the short maturity applicable to such
instruments.

(2) Members Equity Contributions:

On November 19, 1996, GNYHA, GHI, HIP, BCBS and BRC each signed a
subscription agreement with THINC to acquire 10 units of THINC at a purchase
price of $75,000 per unit. The total purchase price of $750,000 for the 10
units was to be paid by each of the companies in accordance with their
respective payment schedule included in the subscription agreement.

During 1998, GNYHA, HIP, BCBS and BRC made payments of $250,000 each
relating to their units subscriptions. In 1998, the Company and BRC agreed to
terminate BRC's investment and involvement with THINC. As a result of the
termination of the agreement with BRC, THINC signed a note payable to BRC in
the amount of $500,000 in exchange for BRC's equity interest. In addition,
THINC will make a payment to BRC of $125,000 not less than ten days prior to
the time that THINC shall make any distribution or pay any dividend with
respect to any membership units or any other equity interests issued by THINC
or repurchase any membership units or other equity interest issued by THINC. If
such payment is made in the future, it will be reflected as a reduction of
additional paid-in capital.

During 1998, the Board of Directors approved an additional $320,000
capital contribution from each member. During 1998, GNYHA, GHI, HIP and BCBS
made payments of $45,000, $320,000, $320,000 and $320,000, respectively,
relating to the additional capital contribution. As of December 31, 1998, the
Company had a subscription receivable from GNYHA in the amount of $250,000.
GNYHA also owes $275,000 in connection with the additional capital contribution
approved in 1998.

In connection with the investment by CareInsite as discussed in note 9,
the THINC operating agreement was amended. The agreement provides for among
other things that GNYHA will receive credits against future capital
contributions to the extent THINC meets certain projections as to hospital
revenue. In addition, the operating agreement was amended to eliminate units of
interest and to state members' interest as a percentage of ownership. The
description of the members' capital contribution in the balance sheets and
statements of members' deficit have been revised to reflect this change.

F-36
<PAGE>

THE HEALTH INFORMATION NETWORK
CONNECTION, LLC
(a Development Stage Company)

NOTES TO FINANCIAL STATEMENTS--(Continued)

(3) Software Agreement:

THINC entered into a five-year software license agreement with Health
Network Ventures, Inc. (HNV) on November 29, 1996 to license the HNVnet
software and use such software to create and maintain an on-line healthcare
information exchange network in the THINC market region. The date of acceptance
(as defined in the software license agreement) did not occur until March 1997.
An initial fee of $200,000 was paid on November 29, 1996 and an additional
$1,330,000 was paid upon acceptance in 1997. The cost of the software is being
amortized over the life of the agreement. THINC also contracted for a five-year
maintenance contract for a fee of $680,000, the first installment of $170,000
due on December 1, 1997, with subsequent installments of $170,000 each due on
the anniversary date thereof. In addition to the fees stated above, THINC will
pay HNV a specified fee per user based upon the terms as set forth in the
software license agreement. The Company also paid $87,115 to HNV for a
processing interface in 1997 and 1998, which has been recorded as purchased
software costs.

(4) Property and Equipment:

Property and equipment at December 31, 1998 are as follows:

<TABLE>
<CAPTION>
Estimated
Useful Lives
------------
<S> <C> <C>
Office equipment................................. 3 years $ 196,573
Computer equipment............................... 3 years 2,365,085
Purchased software--HNV.......................... 5 years 1,617,115
Leasehold improvements........................... 3 years 50,361
----------
4,229,134
Less accumulated depreciation and amortization... (1,459,312)
----------
$2,769,822
==========
</TABLE>

Depreciation and amortization expense in 1998 was approximately $998,000.
The unamortized cost of purchased software from HNV at December 31, 1998 was
approximately $943,000.

(5) Note Payable to Members:

GHI, BCBS and HIP loaned the Company $1,200,000 in the form of notes
payable with original maturity dates of October 31, 1998 ($600,000) and January
30, 1999 ($600,000). Interest accrues at a rate of 8 1/2% per annum. At
December 31, 1998, no repayments have been made.

(6) Long-Term Debt:

Long-term debt at December 31, 1998 consists of the following:

<TABLE>
<S> <C>
Notes payable(a)............................................... $ 500,000
Capital lease obligations(b)................................... 2,380,275
----------
2,880,275
Less current installments...................................... 764,153
----------
$2,116,122
==========
</TABLE>

F-37
<PAGE>

THE HEALTH INFORMATION NETWORK
CONNECTION, LLC
(a Development Stage Company)

NOTES TO FINANCIAL STATEMENTS--(Continued)

(a) On June 1, 1998, THINC issued a $500,000 note payable to BRC for
the repurchase of 10 membership units, which represents repayment
of its original investment in THINC. Principal payments and accrued
interest are to be paid in 36 equal monthly installments of
$17,005, with the first such installment being due on July 1, 1999
and additional installments being due and payable on the first of
each month through June 1, 2002. Interest accrues at a rate of 8
1/2% per annum. Principal payments on the note payable to BRC for
the next four years are as follows: $41,747 in 1999; $171,592 in
2000; $186,867 in 2001; and $99,764 in 2002. The carrying value of
the note payable approximates fair value at December 31, 1998.

(b) THINC entered into four capital lease agreements during 1998 and
1997 to finance the licensing of software packages and the purchase
of computer equipment. The leases are for 36 months (three leases)
and 60 months (one lease). The repayment of one lease with a
balance of $1,483,820 at December 31, 1998 is guaranteed by the
members of THINC.

The effective interest rates on the above leases range from 6.4% to
12.6%. The estimated fair value of the Company's capital lease obligations was
approximately $2,150,000 at December 31, 1998.

At December 31, 1998, the gross amount of property, plant and equipment
and related accumulated depreciation recorded under capital leases were as
follows:

<TABLE>
<S> <C>
Computer equipment............................................. $1,602,140
Purchased software............................................. 1,530,000
Office equipment............................................... 85,000
----------
3,217,140
Less accumulated amortization.................................. (567,124)
----------
$2,650,016
==========
</TABLE>

Future obligations under capital leases are as follows:

<TABLE>
<CAPTION>
Year ending Capital lease
December 31, obligations
------------ -------------
<S> <C>
1999....................................................... $ 905,628
2000....................................................... 905,628
2001....................................................... 627,912
2002....................................................... 306,282
----------
2,745,450
Less amount representing interest under capital lease
obligations............................................... (365,175)
----------
$2,380,275
==========
</TABLE>

(7) Related Party Transactions:

At December 31, 1998, THINC owed BRC $50,000 as the result of a
processing interface project performed by BRC and THINC on behalf of HIP in
1997. The total fee for the project was $75,000, the revenue from which was
distributed 67% and 33% to BRC and THINC, respectively.

F-38
<PAGE>

THE HEALTH INFORMATION NETWORK
CONNECTION, LLC
(a Development Stage Company)

NOTES TO FINANCIAL STATEMENTS--(Continued)

BRC provided THINC with technology services and had entered into an
eighteen month information technology service agreement with the Company dated
February 6, 1997, which was terminated June 22, 1998 (note 1(a)).

During 1998, the Company provided technical services to BCBS to develop a
processor interface for which it billed BCBS $60,000 which was received in
January 1999. This amount was offset by a charge for the same amount from HNV
which provided the services under the contract with THINC.

At December 31, 1998, THINC owes $443,100 to HIP. These funds were
advanced by HIP to allow THINC to secure a letter of credit that enabled the
Company to enter into certain capital lease transactions during 1997 (note 6).
Such funds are reflected as restricted cash in the amount of $420,000 in the
accompanying balance sheet as of December 31, 1998.

(8) Commitments:

At December 31, 1998, THINC is obligated through the year 2000 under
several noncancellable operating lease agreements for office space and office
equipment. Rent expense in 1998 was approximately $328,000. The following is a
schedule of future minimum lease payments:

(9) Subsequent Event and Contingency:

In January 1999, Synetic Healthcare Communications, Inc, which was
subsequently renamed CareInsite, Inc., (CareInsite), THINC, and the THINC
founding members, entered into definitive agreements and consummated a
transaction for a broad strategic alliance. Under this arrangement, among other
things, CareInsite (i) acquired a 20% ownership interest in THINC in exchange
for $1.5 million in cash and a warrant to purchase 81,081 shares of CareInsite
common stock (subject to adjustment for certain events including the proposed
stock split), (ii) agreed to provide senior working capital loans to THINC of
up to $2.0 million and $1.5 million, (iii) entered into a Management Services
Agreement with THINC pursuant to which CareInsite will manage all operations of
THINC, including providing THINC with certain content and messaging services,
(iv) licensed to THINC content and messaging services for use over the THINC
network and (v) entered into Clinical Transaction Agreements with each of
Empire, GHI and HIP (the "THINC Payers") to provide online prescription and
laboratory transaction services, subject to certain limitations. The working
capital loans have due dates of July 1, 2001 for a $2.0 million working capital
loan and July 1, 2002 for a $1.5 million working capital loan. Both working
capital loans are contingent on the continuation of the Management Services
Agreement.

The warrant issued to THINC is exercisable 180 days following the
occurrence of an initial public offering (IPO) of CareInsite's common stock or,
if an IPO has not occurred, at the end of the term of the

F-39
<PAGE>

THE HEALTH INFORMATION NETWORK
CONNECTION, LLC
(a Development Stage Company)

NOTES TO FINANCIAL STATEMENTS--(Continued)

warrant. The exercise price of the warrant is the lesser of (i) the IPO price,
if an IPO has occurred, and (ii) $200 per share (subject to adjustment for the
proposed stock split). The warrant expires on January 1, 2006, subject to
certain exceptions. The warrant and the shares of CareInsite's common stock
issuable upon the exercise of the warrant are subject to certain restrictions
on transfer.

On February 18, 1999, Merck & Co., Inc. and Merck-Medco Managed Care,
L.L.C. filed a complaint in the Superior Court of New Jersey against CareInsite
and certain of its officers and directors. Plaintiffs assert that CareInsite
and the individual defendants are in violation of certain non-competition, non-
solicitation and other agreements with Merck and Merck-Medco, and seek to
enjoin CareInsite and them from conducting CareInsite's healthcare e-commerce
business and from soliciting Merck-Medco's customers. If CareInsite is
unsuccessful in defending this litigation, the ability of CareInsite to provide
services to THINC under the Management Services Agreement between CareInsite
and THINC may be adversely impacted. Such a result could have a material
adverse effect on THINC.

F-40
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Med-Link Technologies, Inc.:

We have audited the accompanying balance sheet of Med-Link Technologies,
Inc. (a Delaware corporation) as of December 31, 1998 and the related
statements of operations and parent company's investment and advances and cash
flows for the period from October 16, 1998 through December 31, 1998. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Med-Link
Technologies, Inc. as of December 31, 1998 the results of its operations and
cash flows for the period from October 16, 1998 through December 31, 1998 in
conformity with generally accepted accounting principles.

Arthur Andersen LLP

Roseland, New Jersey
May 24, 1999

F-41
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Med-Link Technologies, Inc.:

We have audited the accompanying balance sheets of Med-Link Technologies,
Inc. (a Delaware corporation) as of December 31, 1997 and October 15, 1998, and
the related statements of operations and parent company's investment and
advances and cash flows for the years ended December 31, 1996 and 1997, and the
period from January 1, 1998 through October 15, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Med-Link
Technologies, Inc. as of December 31, 1997 and October 15, 1998, and the
results of its operations and cash flows for the years ended December 31, 1996
and 1997, and for the period from January 1, 1998 through October 15, 1998 in
conformity with generally accepted accounting principles.

Arthur Andersen LLP

Roseland, New Jersey
May 24, 1999

F-42
<PAGE>

MED-LINK TECHNOLOGIES, INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
Predecessor Successor
------------------------ -------------------------
December 31, October 15, December 31, March 31,
1997 1998 1998 1999
------------ ----------- ------------ -----------
(unaudited)
<S> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash..................................................................... $ 228,935 $ 345,101 $ 957,875 $ 181,724
Accounts receivable less allowance for doubtful accounts of $40,323,
$23,769, $19,061 and $26,143, respectively.............................. 574,359 487,451 484,480 595,469
Prepaid expenses and other current assets................................ 32,383 49,540 34,631 40,211
---------- ---------- ----------- -----------
Total current assets................................................... 835,677 882,092 1,476,986 817,404
---------- ---------- ----------- -----------
PROPERTY AND EQUIPMENT:
Leasehold improvements................................................... 52,566 56,721 30,759 49,868
Office equipment......................................................... 773,536 862,295 422,185 435,688
Furniture and fixtures................................................... 110,678 110,677 53,473 53,074
---------- ---------- ----------- -----------
936,780 1,029,693 506,417 538,630
Less--Accumulated depreciation........................................... (422,976) (586,811) (33,838) (77,373)
---------- ---------- ----------- -----------
513,804 442,882 472,579 461,257
---------- ---------- ----------- -----------
GOODWILL AND OTHER INTANGIBLES ASSETS, net................................. 752,381 624,037 12,527,385 11,873,782
---------- ---------- ----------- -----------
OTHER ASSETS............................................................... 10,351 10,351 10,351 10,351
---------- ---------- ----------- -----------
Total assets........................................................... $2,112,213 $1,959,362 $14,487,301 $13,162,794
========== ========== =========== ===========
LIABILITIES AND PARENT COMPANY'S INVESTMENT AND ADVANCES
CURRENT LIABILITIES:
Accrued expenses......................................................... $ 270,961 $ 149,182 $ 182,626 $ 191,103
Deferred income.......................................................... 32,000 42,000 30,000 3,860
---------- ---------- ----------- -----------
Total current liabilities.............................................. 302,961 191,182 212,626 194,963
---------- ---------- ----------- -----------
PARENT COMPANY'S INVESTMENT AND ADVANCES................................... 1,809,252 1,768,180 14,274,675 12,967,831
---------- ---------- ----------- -----------
Total liabilities and parent company's investment and advances......... $2,112,213 $1,959,362 $14,487,301 $13,162,794
--------------------------------------------------
========== ========== =========== ===========
</TABLE>

The accompanying notes are an integral part of these
statements.

F-43
<PAGE>

MED-LINK TECHNOLOGIES, INC.

STATEMENTS OF OPERATIONS AND PARENT COMPANY'S INVESTMENT AND ADVANCES

<TABLE>
<CAPTION>
Predecessor Successor Predecessor Successor
------------------------------------- ----------- ----------- -----------
Period from
Period from October 16
Year Ended January 1 through Three Months Ended
December 31, through December March 31, (unaudited)
------------------------ October 15, 31, ------------------------
1996 1997 1998 1998 1998 1999
----------- ----------- ----------- ----------- ----------- -----------
NET REVENUE..................................... $ 1,142,301 $ 2,171,134 $ 2,435,203 $ 641,012 $ 775,956 $ 918,397
<S> <C> <C> <C> <C> <C> <C>
COSTS AND EXPENSES:
Processing and service........................ 882,391 967,343 701,858 195,155 210,200 188,816
Salaries and benefits......................... 1,850,495 2,300,915 1,860,902 514,794 537,167 531,623
Selling, general and administrative........... 655,565 859,464 708,522 689,428 254,316 848,758
Interest expense.............................. -- 111,683 218,090 63,518 69,732 73,297
----------- ----------- ----------- ----------- ---------- -----------
3,388,451 4,239,405 3,489,372 1,462,895 1,071,415 1,642,494
----------- ----------- ----------- ----------- ---------- -----------
Net loss.................................... (2,246,150) (2,068,271) (1,054,169) (821,883) (295,459) (724,097)
PARENT COMPANY'S INVESTMENTS AND ADVANCES,
beginning of period............................ 1,151,518 1,563,666 1,809,252 1,768,180 1,809,252 14,274,675
ADVANCES AND WITHDRAWALS........................ 2,658,298 2,313,857 1,013,097 880,361 343,063 (582,747)
ADJUSTMENT TO REFLECT THE ACQUISITION OF SPS BY
THE ASSOCIATES................................. -- -- -- 12,448,017 -- --
----------- ----------- ----------- ----------- ---------- -----------
PARENT COMPANY'S INVESTMENT AND ADVANCES, end of
period......................................... $ 1,563,666 $ 1,809,252 $ 1,768,180 $14,274,675 $1,856,856 $12,967,831
- --------------------------------------------------
=========== =========== =========== =========== ========== ===========
</TABLE>

The accompanying notes are an integral part of these statements.

F-44
<PAGE>

MED-LINK TECHNOLOGIES, INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Predecessor Successor Predecessor Successor
------------------------------------- ------------ ----------- ---------
Period from Period from
January 1 October 16 Three Months Ended
December 31, through through March 31, (unaudited)
------------------------ October 15, December 31, ---------------------
1996 1997 1998 1998 1998 1999
----------- ----------- ----------- ------------ ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
Cash Flows From
Operating Activities:
Net loss............... $(2,246,150) $(2,068,271) $(1,054,169) $(821,883) $(295,459) $(724,097)
Adjustments to
reconcile net loss to
net cash used in
operating activities..
Depreciation and
amortization........ 334,400 351,172 292,179 578,507 87,384 697,138
Changes in assets and
liabilities.........
(Increase) decrease
in accounts
receivable........ (72,345) (380,813) 86,908 2,971 (10,715) (110,989)
(Increase) decrease
in prepaid and
other current
assets............ (30,070) 7,909 (17,157) 14,909 (8,660) (5,580)
Increase in other
assets............ (26,195) -- -- -- -- --
Increase (decrease)
in deferred
income............ 31,000 1,000 10,000 (12,000) (32,000) (26,140)
(Decrease) increase
in accrued
expenses.......... (411,909) 83,537 (121,779) 33,444 (187,625) 8,477
----------- ----------- ----------- --------- --------- ---------
Total
adjustments...... (175,119) 62,805 250,151 617,831 (151,616) 562,906
----------- ----------- ----------- --------- --------- ---------
Net cash used in
operating
activities....... (2,421,269) (2,005,466) (804,018) (204,052) (447,075) (161,191)
Cash Flows From
Investing Activities--
Purchase of property
and equipment.......... (330,181) (187,152) (92,913) (63,535) (34,475) (32,213)
Cash Flows From
Financing Activities--
Net changes in parent
company's investment
and advances........... 2,658,298 2,313,857 1,013,097 880,361 343,063 (582,747)
----------- ----------- ----------- --------- --------- ---------
Net (decrease)
increase in
cash............. (93,152) 121,239 116,166 612,774 (138,487) (776,151)
CASH, beginning of
period................. 200,848 107,696 228,935 345,101 228,935 957,875
----------- ----------- ----------- --------- --------- ---------
CASH, end of period..... $ 107,696 $ 228,935 $ 345,101 $ 957,875 $ 90,448 $ 181,724
=========== =========== =========== ========= ========= =========
</TABLE>

The accompanying notes are an integral part of these statements.

F-45
<PAGE>

MED-LINK TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS

(1) Organization and Operations:

Med-Link Technologies, Inc. (the Company) is a 100% owned subsidiary of
SPS Payment Systems, Inc. ("SPS" or "Parent") which is a wholly owned
subsidiary of SPS Transaction Services, Inc. ("SPST"). The Company operates in
a single business segment and provides electronic data interchange services to
healthcare providers and payers which automate their claims and other
administrative transactions.

(2) Acquisition of the Parent and Basis of Presentation:

On October 16, 1998, SPST and its wholly owned subsidiaries, including
the Company, were acquired by Associates First Capital Corporation
("Associates"). Goodwill represents the excess of cost over the fair value of
the net assets acquired that relates to the Company's business. Goodwill is
being amortized using the straight-line method over five years.

As a result of the acquisition, a new basis of accounting was established
and financial statements prior to October 16, 1998 are presented as predecessor
financial statements. The financial statements from October 16, 1998 are
presented as successor financial statements.

The following unaudited proforma information has been prepared assuming
the acquisition occurred as of January 1, 1997. The proforma information is
presented for informational purposes only and is not necessarily indicative of
what would have occurred if the acquisition had been made on January 1, 1997.
In addition, the proforma information is not intended to be a projection of
future results.

<TABLE>
<CAPTION>
Period from
Year Ended January 1, 1998
December 31, through October 15,
1997 1998
------------ -------------------
(unaudited) (unaudited)
<S> <C> <C>
Net revenues.............................. $2,171,134 $2,435,203
========== ==========
Net loss.................................. $4,610,563 $3,066,817
========== ==========
</TABLE>

(3) Significant Accounting Policies:

Interim Financial Information--

Information as of March 31, 1999 and for the three months ended March 31,
1999 and 1998 is unaudited and has been prepared on the same basis as the
audited financial statements and includes all adjustments, consisting only of
normal recurring adjustments that management considers necessary for a fair
presentation of the Company's financial position and operating results for such
periods. Results for the three months ended March 31, 1999 are not necessarily
indicative of results to be expected for the full fiscal year for any future
period.

F-46
<PAGE>

MED-LINK TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Allowance for Doubtful Accounts--

The following summarizes the allowance for doubtful accounts and the
related activity.

<TABLE>
<CAPTION>
Predecessor Successor
------------------------------------- ----------------------------
December 31, December 31, October 15, December 31, March 31,
1996 1997 1998 1998 1999
------------ ------------ ----------- ------------ -----------
(unaudited)
<S> <C> <C> <C> <C> <C>
Beginning balance....................................... $43,368 $38,709 $40,323 $23,769 $19,061
Provision (credit) to expense........................... -- 1,614 (15,576) (4,434) 8,216
Write-offs, net of recoveries........................... (4,659) -- (978) (274) (1,134)
------- ------- ------- ------- -------
Ending balance.......................................... $38,709 $40,323 $23,769 $19,061 $26,143
======= ======= ======= ======= =======
</TABLE>

Property and Equipment--

Property and equipment are stated at cost less accumulated depreciation.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets or term of the lease, whichever is shorter, in case
of leasehold improvements. Expenditures for maintenance and repairs of minor
items are charged to operations as incurred.

Goodwill and Other Intangible Assets--

Prior to October 16, 1998, goodwill represented the cost in excess of the
estimated fair value of net assets resulting from the 1995 acquisition of the
Company by SPS (predecessor goodwill). In addition, prior to October 16, 1998,
other intangible assets represented cost of non-compete agreements. The
predecessor goodwill was being amortized on a straight-line basis over 10 years
and non-compete agreements over five years.

The goodwill resulting from the acquisition (Note 2) is being amortized
on a straight-line basis over five years.

Goodwill and other intangible assets consist of the following--

<TABLE>
<CAPTION>
Predecessor Successor
------------------------ ------------------------
December 31, October 15, December 31, March 31,
1997 1998 1998 1999
------------ ----------- ------------ -----------
(unaudited)
<S> <C> <C> <C> <C>
Goodwill................................................................... $ 721,188 $ 721,188 $13,072,054 $13,072,054
Non-compete agreements..................................................... 455,000 455,000 -- --
--------- --------- ----------- -----------
1,176,188 1,176,188 13,072,054 13,072,054
Accumulated amortization................................................... 423,807 552,151 544,669 1,198,272
--------- --------- ----------- -----------
$ 752,381 $ 624,037 $12,527,385 $11,873,782
========= ========= =========== ===========
</TABLE>

Long-lived Assets--

Statement of Financial Accounting Standard ("SFAS") No. 121, "Accounting
for the Impairment of Long-Lived Assets to Be Disposed Of", requires, among
other things, that an entity review its long lived assets for impairment
whenever changes in circumstances indicate that a carrying amount of an asset
may not be recoverable. Management does not believe that any such events or
changes in circumstances have occurred.

F-47
<PAGE>

MED-LINK TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Accrued Expenses--

Accrued expenses consists of the following--

<TABLE>
<CAPTION>
Predecessor Successor
------------------------ ------------------------
December 31, October 15, December 31, March 31,
1997 1998 1998 1999
------------ ----------- ------------ -----------
(unaudited)
<S> <C> <C> <C> <C>
Payroll and other related expenses......................................... $145,295 $ 80,553 $115,822 $ 32,640
Other...................................................................... 125,666 68,629 66,804 158,463
-------- -------- -------- --------
$270,961 $149,182 $182,626 $191,103
======== ======== ======== ========
</TABLE>

Concentration of Risk--

Financial instruments subject to credit risk are primarily trade accounts
receivable. The Company had one customer that accounted for approximately 18%
and 41% of net revenues in 1997 and 1998 and had $191,740 and $203,998 of
outstanding accounts receivable from this customer as of December 31, 1997 and
1998, respectively. The Company had one customer that accounted for
approximately 12% and two customers that accounted for approximately 11% each
of net revenue in 1996. The related accounts receivables for these customers at
December 31, 1996 were $19,407, $8,814 and $40,527, respectively.

Use of Estimates--

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Parent Company's Investment and Advances--

Parent Company's investment and advances represent the original
investment of SPS, intercompany notes and advances (see Note 4) and accumulated
results of operations.

Revenue Recognition--

The Company recognizes revenue in accordance with Statement of Position
97-2, Software Revenue Recognition. Accordingly, revenue from the license of
software is recognized when the software is delivered, installed and accepted
by the customer, the fee is fixed and determinable and collection of the
resulting receivable is deemed probable. Software maintenance fees are deferred
and recognized as revenue ratably over the term of the applicable contract.
Service revenue is recognized when services are performed. Deferred revenue
represents maintenance fees received for which the services have not yet been
rendered.

Recently Issued Accounting Standards--

In February 1998, Statement of Position (SOP) 98-1, "Accounting for Costs
of Computer Software Developed or Purchased for Internal Use" was issued and is
effective for fiscal years beginning after December 15, 1998. SOP 98-1 is not
expected to have a material impact on the Company's financial position or
results of operations.

F-48
<PAGE>

MED-LINK TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

(4) Related Party Transaction--Borrowing Arrangement:

On August 1, 1997, the Company and SPS entered into an agreement wherein
SPS agreed to lend up to $7 million to the Company for business purposes at
SPS's current borrowing rate. The balance outstanding under this agreement as
of December 31, 1997, October 15, 1998, December 31, 1998 and March 31, 1999
was $4,842,718, $5,369,282, $6,224,643 and $5,641,896, respectively and has
been included in parent company's investment and advances (see Note 3). The
average interest rate was 5.76% in 1997 and 5.65% in 1998.

(5) Employee Benefit Plan:

The Parent sponsors a retirement plan for the Company's employees. The
Company contributes amount equal to 50% of employee contributions up to 6% of
the employee's pay. The amount expensed for the Company match provision of the
plan was approximately $10,299, $8,800, $7,600 and $1,200 for the years ended
December 31, 1996 and 1997, the period January 1, 1998 through October 15, 1998
and the period October 16, 1998 through December 31, 1998, respectively.

(6) Income Taxes:

The Company is included in the consolidated Federal income tax return of
the Parent. The accompanying financial statements do not reflect deferred tax
assets or liabilities as those amounts are being paid or received by the
Parent. Such amounts have been included as part of the Parent company's
investment and advances. Deferred tax assets and liabilities would reflect
temporary differences between assets and liabilities for financial reporting
purposes and income tax purposes as well as the benefits associated with net
operating loss carry forwards. Such temporary differences are primarily
attributable to depreciation, allowance for doubtful accounts and certain
accrued expenses and have not been significant.

(7) Commitments and Contingencies:

Operating Lease--

The Company is obligated under noncancellable operating leases for its
office space, requiring minimum annual rental payment are as follows--

<TABLE>
<S> <C>
Year ending December 31--
1999......................................................... $138,845
2000......................................................... 138,845
2001......................................................... 34,711
--------
$312,401
========
</TABLE>

Rent expense was approximately $93,000, $129,000, $112,000 and $29,000
for the years ended December 31, 1996 and 1997, the period January 1, 1998
through October 15, 1998 and the period October 16, 1998 through December 31,
1998, respectively.

Development Agreement--

In February 1999, the Company entered into a three year information
technology development agreement with a third party vendor for production
support of data translators and programming support for development projects.
The agreement requires the Company pay a minimum of $39,000 a month for the
related services, subject to early termination upon 90 days written notice, as
defined.

F-49
<PAGE>

MED-LINK TECHNOLOGIES, INC.

NOTES TO FINANCIAL STATEMENTS--(Continued)

Litigation--

In January 1999, the Company commenced litigation against former
employees of the Company for violation of their employment and noncompetition
agreements. These former employees subsequently filed a counterclaim against
the Company alleging, among other things, wrongful termination. The Company,
SPS and its legal counsel believe that the counterclaims are without merit and
intend to vigorously defend the counterclaim. However, the ultimate outcome of
this litigation is uncertain and cannot be predicted at this time. An
unanticipated adverse result could have a material adverse effect on the
Company's financial condition and results of operations. As part of its
agreement to sell the Company to CareInsite, Inc. (See Note 8), SPS has agreed
to hold the Company and CareInsite, Inc. harmless for any liabilities, costs
and expenses relating to this litigation.

Year 2000--

As the Year 2000 approaches, the Company recognizes the need to ensure
its operations will not be adversely impacted by Year 2000 software failures.
The Company is addressing this issue to ensure the availability and integrity
of its financial systems and the reliability of operational systems. The
Company has established processes for evaluating and managing the risks and
costs associated with this problem. The Company has and will continue to make
certain investments in the software systems and applications in an effort to
ensure that it is Year 2000 compliant.

(8) Subsequent Event

On May 24, 1999, the Company was acquired by CareInsite, Inc. for
$14,000,000 in cash.

F-50
<PAGE>

CAREINSITE, INC.
UNAUDITED PRO FORMA COMBINED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

In the table below, we attempt to illustrate the financial results that
might have occurred if the acquisition (the "Acquisition") of Med-Link
Technologies, Inc. ("Med-Link") by CareInsite, Inc. ("CareInsite") had been
completed previously. Presented is the Unaudited Pro Forma Combined Condensed
Consolidated Statements of Operations for the fiscal year ended June 30, 1998
and the nine months ended March 31, 1999 as if the Acquisition had been
consummated at the beginning of the earliest period presented. Also presented
is the Unaudited Pro Forma Combined Condensed Consolidated Balance Sheet as of
March 31, 1999 as if the Acquisition had been completed on March 31, 1999.
These unaudited pro forma combined condensed consolidated financial statements
should be read in conjunction with the historical consolidated financial
statements of CareInsite and Med-Link and related notes thereto included
elsewhere in this prospectus and, with respect to CareInsite, the "Management's
Discussion and Analysis of Results of Operations and Financial Condition"
included elsewhere in this prospectus for a more detailed explanation.

It is important to remember that this information is hypothetical, and
does not necessarily reflect the financial performance that would have actually
resulted if the Acquisition had been completed on the dates assumed for the
purpose of presenting this information. It is also important to remember that
this information does not necessarily reflect future financial performance
after the Acquisition.

PF-1
<PAGE>

CareInsite, Inc.
Pro Forma Combined Condensed Consolidated Statement of Operations
For the Year Ended June 30, 1998

(unaudited)
(in thousands, except per share data)

<TABLE>
<CAPTION>
Pro
CareInsite Med-Link Pro Forma Forma
Historical Historical Adjustments Combined
---------- ---------- ----------- --------
<S> <C> <C> <C> <C>
Service revenue................. $ -- $ 2,657 $ 2,657
Costs and expenses:
Cost of services.............. -- 3,208 3,208
Research and development...... 4,762 -- 4,762
Selling, general and
administrative............... 5,620 893 1,356 (1) 7,706
(163)(2)
Other income, net............. (47) 251 204
-------- ------- ------- --------
Total costs and expenses.... 10,335 4,352 1,193 15,880
-------- ------- ------- --------
Net loss........................ $(10,335) $(1,695) $(1,193) $(13,223)
======== ======= ======= ========
Net loss per share--basic and
diluted........................ $ (0.21) $ (0.26)
======== ========
Weighted average shares
outstanding--basic and
diluted........................ 50,063 875 (3) 50,938
======== ======= ========
</TABLE>

PF-2
<PAGE>

CareInsite, Inc.
Pro Forma Combined Condensed Consolidated Statement of Operations
For the Nine Months Ended March 31, 1999

(unaudited)
(in thousands, except per share data)

<TABLE>
<CAPTION>
CareInsite Med-Link Pro Forma Pro Forma
Historical Historical Adjustments Combined
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Service revenue:
Service revenue (related
party)....................... $ 213 $ -- $ 213
Service revenue............... -- 2,441 2,441
-------- ------- ------ --------
Total service revenue....... 213 2,441 -- 2,654

Cost and expenses:
Cost of services (related
party)....................... 213 -- 213
Cost of services.............. -- 2,460 2,460
Research and development...... 8,720 -- 8,720
Selling, general and
administrative............... 4,371 1,804 1,017 (1) 5,947
(1,245)(2)
Litigation costs.............. 2,500 -- 2,500
Other income, net............. (110) 215 105
-------- ------- ------ --------
Total costs and expenses.... 15,694 4,479 (228) 19,945
-------- ------- ------ --------

Net loss........................ $(15,481) $(2,038) $ 228 $(17,291)
======== ======= ====== ========

Net loss per share--basic and
diluted........................ $ (0.29) $ (0.31)
======== ========

Weighted average shares
outstanding--basic and
diluted........................ 54,208 875 (3) 55,083
======== ====== ========
</TABLE>

PF-3
<PAGE>

CareInsite, Inc.
Pro Forma Combined Condensed Consolidated Balance Sheet
as of March 31, 1999

(unaudited)
(in thousands)

<TABLE>
<CAPTION>
CareInsite Med-Link Pro Forma Pro Forma
Historical Historical Adjustments Combined
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Assets:
Current Assets:
Cash and cash equivalents...... $ 5,058 $ 182 $ 5,240
Other current assets........... 554 636 1,190
------- ------- -------
Total current assets......... 5,612 818 6,430
------- ------- -------
Property, plant and equipment,
net............................. 2,263 461 2,724
Capitalized software development
costs........................... 31,330 -- 31,330
Other Assets:
Intangible assets, net of
amortization.................. -- 11,874 (11,874)(4) 13,556
13,556 (5)
Investments.................... 4,668 -- 4,668
Other assets................... 62 10 72
------- ------- -------- -------
Total other assets........... 4,730 11,884 1,682 18,296
------- ------- -------- -------
Total Assets................. $43,935 $13,163 $ 1,682 $58,780
======= ======= ======== =======
Liabilities & Stockholders'
Equity:
Current liabilities.............. $ 1,270 $ 195 $ 650 (6) $ 2,115
Deferred income taxes............ 1,415 -- 1,415
Stockholders' equity............. 41,250 12,968 (12,968)(7) 55,250
14,000 (8)
------- ------- -------- -------
Total liabilities &
stockholders' equity........ $43,935 $13,163 $ 1,682 $58,780
======= ======= ======== =======
</TABLE>

PF-4
<PAGE>

CareInsite, Inc.
Notes to Pro Forma Combined Condensed Consolidated
Financial Statements

(In thousands except share data)
(unaudited)

The Unaudited Pro Forma Combined Condensed Consolidated Statements of
Operations have been prepared to reflect the Acquisition as if the Acquisition
occurred at the beginning of the period presented. Med-Link's historical
financial statements were derived from the books and records of Med-Link and
reflect (a) the statement of operations of Med-Link (predecessor) for the 12
month period ended June 30, 1998, (b) the statement of operations of Med-Link
(predecessor) for the period from July 1, 1998 to October 15, 1998 combined
with the statement of operations of Med-Link (successor) for the period from
October 16, 1998 to March 31, 1999, and (c) the balance sheet of Med-Link
(successor) as of March 31, 1999. The Acquisition has been accounted for under
the purchase method of accounting. The excess of the purchase price over the
fair value of the net assets acquired is being amortized over periods of up to
10 years.

The following is a summary of the adjustments reflected in the Unaudited
Pro Forma Combined Condensed Consolidated Statements of Operations:

1. Represents the amortization of the excess of the purchase price over
the net assets of Med-Link acquired.

2. Represents the elimination of historical amortization of goodwill and
other intangible assets of Med-Link.

3. Represents the increase in the number of outstanding shares of
CareInsite common stock to reflect the 875,000 shares issued to
Synetic and Cerner for $14,000 used to fund the purchase price.

The Unaudited Pro Forma Combined Condensed Consolidated Balance Sheet was
prepared to reflect the Acquisition as of March 31, 1999.

The following is a summary of the adjustments reflected in the Unaudited
Pro Forma Combined Condensed Consolidated Balance Sheet:

4. Represents the elimination of Med-Link's historical goodwill.

5. Represents the preliminary estimate of the excess purchase price over
the net assets acquired as follows:

<TABLE>
<S> <C>
Purchase price (including $650 of transaction expenses)........ $14,650
Net tangible assets acquired .................................. 1,094
-------
Excess of purchase price over net tangible assets acquired..... $13,556
=======
</TABLE>

The Company believes that all significant assets and liabilities
have been identified and, accordingly, that the final
determination of the allocation of the Med-Link purchase price
should not vary materially from the preliminary estimate. The
Company anticipates finalizing the purchase price allocation upon
completing the preparation and review of the May 24, 1999
(acquisition date) financial statements of Med-Link.

The identifiable assets are being amortized over their estimated
useful lives. Goodwill is being amortized over periods of up to 10
years.

PF-5
<PAGE>

Subsequent to the Acquisition, the Company will review the
carrying values assigned to goodwill to determine whether later
events or circumstances have occurred that indicate that the
balance of goodwill may be impaired. The Company's principal
considerations in determining the impairment of goodwill include
the strategic benefit to the Company of the particular business as
measured by expected undiscounted future cash flows.

6. Represents the amount of estimated costs for legal and accounting
services and other expenses associated with the Acquisition.

7. Represents the elimination of the Parent Company's Investment and
Advances to Med-Link as of March 31, 1999, which includes all amounts
under borrowing arrangements with SPS, Med-Link's parent (and a
wholly owned subsidiary of SPS Transaction Services, Inc. who,
effective October 15, 1998, became a wholly owned subsidiary of
Associates First Capital Corporation).

8. Represents the sale of 875,000 shares to Synetic and Cerner for
$14,000 used to fund the purchase price (excluding transaction
costs). Synetic purchased 700,875 of these shares for $11,214 and
Cerner purchased 174,125 of these shares for $2,786.

PF-6
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

5,650,000 Shares

[Logo] CarInsite, Inc.

Common Stock

----------------
PROSPECTUS

----------------

Merrill Lynch & Co.

Warburg Dillon Read LLC

Wit Capital Corporation

, 1999

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

<TABLE>
<S> <C>
SEC registration fee.......................................... $ 28,901
NASD filing fee............................................... 10,896
Nasdaq listing fee............................................ 95,000
Blue Sky fees and expenses.................................... 10,000
Printing and engraving expenses............................... 100,000
Attorneys' fees and expenses.................................. 400,000
Accountants' fees and expenses................................ 300,000
Transfer agent's and registrar's fees and expenses............ 10,000
Miscellaneous................................................. 45,203
----------
Total..................................................... $1,000,000
==========
</TABLE>

The amounts set forth above are estimates except for the SEC registration
fee and the NASD filing fee.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the Delaware General Corporation Law provides, in summary,
that directors and officers of Delaware corporations are entitled, under
certain circumstances, to be indemnified against all expenses and liabilities
(including attorney's fees) incurred by them as a result of suits brought
against them in their capacity as a director or officer, if they acted in good
faith and in a manner they reasonably believed to be in or not opposed to the
best interests of the Company, and, with respect to any criminal action or
proceeding, if they had no reasonable cause to believe their conduct was
unlawful; provided that no indemnification may be made against expenses in
respect of any claim, issue or matter as to which they shall have been adjudged
to be liable to the Company, unless and only to the extent that the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, they are fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper. Any such indemnification may be
made by the Company only as authorized in each specific case upon a
determination by the shareholders or disinterested directors that
indemnification is proper because the indemnities has met the applicable
standard of conduct.

Article Eleven of the registrant's Certificate of Incorporation provides
that no director of the registrant shall be personally liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability: (i) for any breach of the director's duty of
loyalty to the Company or its stockholders; (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law; (iii) in respect of certain unlawful dividend payments or stock
redemptions or purchases; or (iv) for any transaction from which the director
derived an improper personal benefit.

The Company's Certificate of Incorporation and By-Laws provide for
indemnification of its directors and officers to the fullest extent permitted
by Delaware law, as the same may be amended from time to time.

In addition, the Company maintains liability insurance for its directors
and officers.

Reference is made to the form of Indemnification Agreement to be entered
into between the Registrant and each of its directors and officers filed as
Exhibit 10.27 to this Registration Statement pursuant to which the registrant
will agree to indemnify such directors and officers to the fullest extent
permitted by Delaware law, as the same may be amended from time to time.

II-1
<PAGE>

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

The following information reflects sales by the registrant of
unregistered securities within the past three years. The issuance by the
registrant of the securities sold in the transactions referenced below were not
registered under the Securities Act of 1933, as amended pursuant to Section
4(2) thereof, as such transactions did not involve a public offering.

In January 1999, the registrant issued to The Health Information Network
Connection LLC (i) a warrant (the "THINC Warrant") exercisable for 4,059,118
shares (after giving effect to the registrant's proposed 50.0625-for-1 stock
split) of the registrant's common stock (subject to adjustment), representing
approximately 6% of the registrant's common stock outstanding after giving
effect to the exercise of the THINC Warrant and (ii) $1.5 million in cash, in
exchange for a 20% ownership interest in THINC.

In January 1999, the registrant issued to Cerner Corporation (i)
12,437,500 shares (after giving effect to the registrant's proposed 50.0625-
for-1 stock split) of its common stock, representing 19.9% of its common stock
outstanding after such issuance, and (ii) a warrant exercisable for up to
1,008,445 shares of common stock of the registrant, each in consideration for
Cerner Corporation entering into non-competition, marketing, license and master
servicing and outsourcing agreements with the registrant.

In May 1999 in connection with the registrant's acquisition of Med-Link
Technologies, Inc., the registrant issued to (i) Cerner Corporation 174,125
shares (after giving effect to the registrant's proposed 50.0625-for-1 stock
split) of the registrant's common stock, and (ii) Synetic, Inc. 700,875 shares
(after giving effect to the registrant's proposed 50.0625-for-1 stock split) of
the registrant's common stock.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits.

<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
1.1 Form of Purchase Agreement.*

3.1 Form of Amended and Restated Certificate of Incorporation of the
Registrant.

3.2 By-laws of the Registrant.

4.1 Specimen Certificate representing Common Stock.*

5.1 Opinion of Shearman & Sterling as to the legality of the Common
Stock.*

10.1 Agreement and Plan of Merger among Synetic, Inc., Synternet
Acquisition Corp., a subsidiary of Synetic, Inc., Avicenna Systems
Corp., and the individuals and entities listed on the signature pages
thereof, dated as of December 23, 1996.*

10.2 Agreement and Plan of Merger among Synetic, Inc., Synternet
Acquisition Corp., CareAgents Inc. and the individuals listed on the
signature pages thereof, dated as of January 23, 1997.*

10.3 Subscription Agreement dated as of January 2, 1999 between Synetic
Healthcare Communications, Inc. (since renamed CareInsite, Inc.
("CareInsite")), Synetic, Inc., Avicenna Systems Corporation and
Cerner Corporation.*

10.4 License Agreement dated as of January 2, 1999 between CareInsite and
Cerner Corporation.*

10.5 Stockholders' Agreement, dated as of January 2, 1999, among
CareInsite, Synetic, Inc., Avicenna Systems Corporation and Cerner
Corporation.*

10.6 Non-Competition Agreement, dated as of January 2, 1999, among
CareInsite, Synetic, Inc., Avicenna Systems Corporation and Cerner
Corporation.*

10.7 Marketing Agreement, dated as of January 2, 1999, between CareInsite
and Cerner Corporation.*

</TABLE>

II-2
<PAGE>

<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
10.8 Clinical Transaction Agreement, dated as of January 1, 1999, between
CareInsite and Empire Blue Cross and Blue Shield, Empire Healthchoice,
Inc., Empire Healthchoice Assurance Inc. and Empire Health Plans
Assurance, Inc.+*

10.9 Clinical Transaction Agreement, dated as of January 1, 1999, between
CareInsite and Group Health Incorporated.+*

10.10 Clinical Transaction Agreement, dated as of January 1, 1999, between
CareInsite and Health Insurance Plans of Greater New York.+*

10.11 Management Services Agreement, effective as of January 1, 1999,
between CareInsite and The Health Information Network Connection LLC
("THINC").*

10.12 Warrant dated as of January 1, 1999 (entitling THINC to purchase from
CareInsite 81,081 shares of common stock).*

10.13 Amended and Restated Operating Agreement, dated as of January 1, 1999,
among The Health Information Network Connection LLC, Empire Blue Cross
and Blue Shield, GNYHA Management Corporation, GroupHealth
Incorporated, Health Insurance Plan of Greater New York and
CareInsite.*

10.14 Form of Tax-Sharing Agreement between the Registrant and Synetic, Inc.

10.15 Services Agreement, dated January 1, 1999, between the Registrant and
Synetic, Inc.*

10.16 Form of Indemnification Agreement between the Registrant and Synetic,
Inc.

10.17 CareInsite, Inc. 1999 Employee Stock Option Plan.

10.18 CareInsite, Inc. 1999 Officer Stock Option Plan.

10.19 Employment Agreement dated as of January 23, 1997 between Synetic,
Inc. and David M. Margulies.*

10.20 Employment Agreement dated as of November 3, 1997 between Avicenna
Systems Corp. and Paul M. Bernard.*

10.21 Employment Agreement dated November 6, 1997 between Synetic, Inc. and
Roger C. Holstein.*

10.22 Software License Agreement, dated as of March 31, 1997, between
Synetic, Inc. and Advanced Health Med-E-Systems Corporation.*

10.23 Exclusive Electronic Gateway and Network Services Agreement, dated as
of May 16, 1999, between the Registrant and Medical Manager
Corporation+*

10.24 Employment Agreement dated February 1999 between Synetic, Inc. and
James R. Love.*

10.25 Employment Agreement dated May 26, 1998 between Synetic, Inc. and
Richard S. Cohan.*

10.26 Stock Purchase Agreement dated as of May 24, 1999 among CareInsite,
Inc. and SPS Payment Systems, Inc. for the purchase of Med-Link
Technologies, Inc.*

10.27 Form of Indemnification Agreement Between CareInsite and each of its
directors and officers.

10.28 1989 Class A Non-Qualified Stock Option Plan of Synetic, Inc.
(Incorporated by reference to Exhibit 4.1 to the Synetic, Inc.'s
Registration Statement on Form S-8 (No. 333-21555)).*

10.29 1989 Class B Non-Qualified Stock Option Plan of Synetic, Inc.
(Incorporated by reference to Exhibit 4.2 to Synetic, Inc.'s
Registration Statement on Form S-8 (No. 333-21555)).*

10.30 1991 Director Stock Option Plan of Synetic, Inc. (Incorporated by
reference to Exhibit 4.3 to Synetic, Inc.'s Registration Statement on
Form S-8 (No. 333-21555)).*

</TABLE>

II-3
<PAGE>

<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------- ----------------------
<C> <S>
10.31 Stock Option Agreement, dated as of July 24, 1991, between Synetic,
Inc. and Roger C. Holstein. (Incorporated by reference to Exhibit 4.3
to Synetic, Inc.'s Registration Statement on Form S-8 (No. 33-
46640)).*

10.32 Form of Stock Option Agreement, made as of December 7, 1994, between
Synetic, Inc. and Paul C. Suthern. (Incorporated by reference to
Exhibit 4.5 to Synetic, Inc.'s Registration Statement on Form S-8 (No.
333-21555)).*

10.33 1997 Class D Stock Option Plan of Synetic, Inc. (Incorporated by
reference to Exhibit 4.2 to Synetic, Inc.'s Registration Statement on
Form S-8 (No. 333-36041)).*

10.34 1991 Special Non-Qualified Stock Option Plan of Synetic, Inc.
(Incorporated by reference to Exhibit 4.3 to Synetic, Inc.'s
Registration Statement on Form S-8 (No. 333-36041)).*

10.35 Stock Option Agreement, dated as of March 15, 1999, between Synetic,
Inc. and James R. Love

10.36 Stock Option Agreement, dated as of January 7, 1998, between Synetic,
Inc. and David C. Amburgey (Incorporated by reference to Exhibit 4.4
to Synetic, Inc.'s Registration Statement on Form S-8 (No. 333-
72517)).*

10.37 Stock Option Agreement, dated as of October 9, 1998, between Synetic,
Inc. and Richard S. Cohan (Incorporated by reference to Exhibit 4.6 to
Synetic, Inc.'s Registration Statement on Form S-8 (No. 333-72517)).*

10.38 Stock Option Agreement, dated as of June 23, 1997, between Synetic,
Inc. and Roger C. Holstein (Incorporated by reference to Exhibit 4.3
to Synetic, Inc.'s Registration Statement on Form S-8 (No. 333-
72517)).*

10.39 Employment Agreement dated as of June 11, 1998 between CareInsite and
Steven L. Zatz.

23.1 Consent of Arthur Andersen LLP.*

23.2 Consent of Shearman & Sterling (included in its opinion in Exhibit
5.1).*

23.3 Consent of Kegler, Brown, Hill & Ritter Co., L.P.A.*

23.4 Consent of KPMG LLP.*

24.1 Powers of Attorney (included on the signature page of this
Registration Statement).*

27.1 Financial Data Schedule for fiscal year ended June 30, 1998 (for SEC
use only).*

27.2 Financial Data Schedule for six months ended December 31, 1998 (for
SEC use only).*

27.3 Financial Data Schedule for nine months ended March 31, 1999 (for SEC
use only).*
</TABLE>
- --------

* Previously filed.

+ Exhibits for which Registrant has requested confidential treatment for
certain portions. Confidential material has been redacted and has been
separately filed with the Securities and Exchange Commission.

(b) Financial Statement Schedules.

The schedules have been omitted because of the absence of circumstances
under which they would be required.

ITEM 17. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions or otherwise,

II-4
<PAGE>

the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the final
adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall
be deemed to be part of this registration statement as of the time it
was declared effective.

(2) For the purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a
form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.

The undersigned registrant hereby undertakes to provide to the
Underwriters at the closing specified in the Underwriting Agreement
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.

II-5
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has duly caused this Amendment to the Registration
Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Borough of Elmwood Park in the State of New Jersey on
June 11, 1999.

Careinsite, Inc.

/s/ Paul C. Suthern
By: _________________________________
Name: Paul C. Suthern
Title: President and Chief
Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed by the following
persons in the capacities and on the date indicated.

<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----

<S> <C> <C>
/s/ Paul C. Suthern Director and Principal June 11, 1999
______________________________________ Executive Officer
Paul C. Suthern

/s/ James R. Love Director and Principal June 11 1999
______________________________________ Financial and Accounting
James R. Love Officer

* Director June 11, 1999
______________________________________
Roger C. Holstein

* Director June 11, 1999
______________________________________
David M. Margulies

* Director June 11, 1999
______________________________________
Charles A. Mele

* Director June 11, 1999
______________________________________
Martin J. Wygod

* /s/ David C. Amburgey As Attorney-in-Fact June 11, 1999
______________________________________
David C. Amburgey
</TABLE>

II-6

<PAGE>

EXHIBIT 3.1

AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION

CAREINSITE, INC.

CAREINSITE, INC., a corporation organized and existing under the laws
of the State of Delaware, hereby certifies as follows:

1. The name of the corporation is CAREINSITE, INC. The date of
filing of its original Certificate of Incorporation with the Secretary of
State was November 24, 1998.

2. This Amended and Restated Certificate of Incorporation restates
and integrates and further amends the Certificate of Incorporation of this
corporation by deleting Article I and Articles IV through X and by
substituting in lieu thereof new provisions for each of Article I and
Articles IV through XIV as set forth below.

3. The text of the Certificate of Incorporation as amended or
supplemented heretofore is further amended hereby to read as herein set
forth in full:

ARTICLE I

Name

The name of the corporation is CareInsite, Inc. (the "Corporation").
-----------

ARTICLE II

Registered Office and Registered Agent

The address of the registered office of the Corporation in the State
of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of the registered agent of the
Corporation at such address is The Corporation Trust Company.

<PAGE>

ARTICLE III

Corporate Purpose

The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the "General Corporation Law").
-----------------------

ARTICLE IV

Capital Stock

The Corporation shall have authority, to be exercised by the Board of
Directors, to issue a total of 330,000,000 shares consisting of 300,000,000
shares of common voting stock of the par value of $0.01 per share (the "Common
------
Stock") and 30,000,000 shares of preferred stock of the par value of $0.01 per
- -----
share (the "Preferred Stock"). Shares of the Preferred Stock shall be
---------------
designated as the Board of Directors may determine and may be issued in series
by the Board of Directors as hereinafter provided in paragraph (c) below. The
relative rights and preferences of the shares of capital stock of the
Corporation shall be as follows:

(a) Each holder of Common Stock shall at every meeting of stockholders of
the Corporation be entitled to one vote in person or by proxy for each share of
Common Stock held by such holder and each holder of Preferred Stock with voting
rights shall be entitled to such voting rights as specified pursuant to
paragraph (c)(vii) below.

(b) Subject to the rights, if any, of the holders of the Preferred Stock,
or any series thereof, the holders of the Common Stock are entitled to the
entire voting power, all dividends declared and paid by the Corporation and all
assets of the Corporation in the event of any liquidation, dissolution, or
winding up of the Corporation.

(c) The Preferred Stock may be divided into and issued from time to time in
one or more series. All shares of the Preferred Stock shall be of equal rank
and shall be identical, except with respect to the particulars that may be fixed
by the Board of Directors as hereinafter provided pursuant to authority that is
hereby expressly vested in the Board of Directors; provided, however, that each
share of a given series of the Preferred Stock shall be identical in all
respects with the other shares of such series. Before any shares of the
Preferred Stock of any particular series shall be issued, the Board of Directors
shall fix and determine, in the manner provided by law, the following
particulars with respect to the share of such series:
<PAGE>

(i) the distinctive designation of such series and the number of
shares of Preferred Stock that shall constitute such series, which number
may be increased (except where otherwise provided by the Board of Directors
in creating such series) or decreased (but not below the number of shares
of such series then issued) from time to time by the Board of Directors by
resolution:

(ii) the dividend or rate of divided payable with respect to shares of
Preferred Stock of such series, the time of payment of any dividend,
whether dividends shall be cumulative and, if so, the conditions under
which and the date from which dividends shall be accumulated;

(iii) the redemption provisions applicable to the shares of Preferred
Stock of such series, if any, and if applicable, the time or times when,
the price or prices at which, and the other terms and conditions under
which the shares of Preferred Stock of such series shall be redeemable;

(iv) the amount payable on shares of Preferred Stock of such series in
the event of any voluntary or involuntary dissolution, liquidation or
winding up of the affairs of the Corporation, which shall not be deemed to
include the merger or consolidation of the Corporation or a sale, lease or
conveyance of all or part of the assets of the Corporation;

(v) the purchase, retirement or sinking fund provisions, if any, for
the redemption or purchase of shares of Preferred Stock of such series;

(vi) the rights, if any, of the holders of shares of Preferred Stock
of such series to convert such shares into or exchange such shares for
shares of the Common Stock or shares of any other series of the Preferred
Stock and the terms and conditions of such conversion or exchange;

(vii) the extent of voting rights of the shares of Preferred Stock of
such series or the absence thereof; and

(viii) such other terms, limitations, rights and preferences, if any,
of such series as the Board of Directors may lawfully fix under the laws of
the State of Delaware as in effect at the time of creation of such series.

<PAGE>

ARTICLE V

Number and Term of Directors

The number of directors which shall constitute the whole Board of
Directors of the Corporation shall be determined in the By-Laws as provided
therein. The directors of the Corporation shall be elected by the stockholders
entitled to vote thereon at each annual meeting of stockholders and shall hold
office until the next annual meeting of stockholders and until their respective
successors shall have been elected and qualified, subject, however, to prior
death, resignation, retirement, disqualification or removal from office.

ARTICLE VI

Vacancies

The power to fill vacancies on the Board of Directors (whether by
reason of resignation, removal with or without cause, the creation of new
directorships or otherwise) shall be vested in the Board of Directors, except as
provided below, and vacancies may be filled by a majority of the directors then
in office, although less than a quorum, unless all directorships are vacant, in
which case the stockholders shall fill the then existing vacancies. Any
director chosen by the Board of Directors to fill a vacancy shall hold office
only until the next election of directors by stockholders and until that
director's successor shall be elected and shall have qualified. In the case of
removal of a director by the affirmative vote of the stockholders pursuant to
Article IX of this Certificate of Incorporation, the vacancy created by such
removal shall be filled by the affirmative vote of the holders of record of a
majority of the outstanding shares of stock entitled to vote thereon. Should
the stockholders entitled to vote thereon fail to elect a director to fill a
vacancy caused by the removal of a director by the affirmative vote of the
stockholders pursuant to Article IX of this Certificate of Incorporation, such
vacancy shall be filled by the Board of Directors as provided herein.

ARTICLE VII

Special Meetings

Special meetings of the stockholders of the Corporation for any
purpose may be called at any time by the Board of Directors, or by a committee
of the Board of Directors which has been duly designated by the Board of
Directors and whose powers and authority, as provided in a resolution of the
Board of Directors or in the By-Laws of the Corporation, include the power to
call such meetings or, if the By-laws so provide, by the Chairman of the Board
of Directors of the Corporation or by the Chief Executive Officer of the
Corporation.
<PAGE>

ARTICLE VIII

By-Laws

The original By-Laws of the Corporation shall be adopted by the
Incorporator. Thereafter, in furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to make,
repeal, alter, amend and rescind the By-Laws of the Corporation.

ARTICLE IX

Election and Removal of Directors

The election of directors need not be by written ballot unless
required by the By-Laws of the Corporation. Any director may be removed, either
for or without cause, at any time, by the affirmative vote of the holders of
record of a majority of the outstanding shares of stock entitled to vote, and
the vacancy in the Board of Directors caused by any such removal shall be filled
as provided in Article VI herein; provided, that where the holders of any class
or series of Preferred Stock are entitled to elect one or more directors the
provisions of the Certificate of Designation of such class or series of
Preferred Stock shall apply, in respect of removal, with or without cause, of a
director or directors so elected.

ARTICLE XI

Indemnification of Directors, Officers and Others

(a) The Corporation shall indemnify, to the fullest extent permitted
by the General Corporation Law of the State of Delaware and as provided in the
By-Laws of the Corporation, any and all persons whom it shall have the power to
indemnify from and against any and all expenses, liabilities or other matters.

(b) No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty by such director as a director; provided, however, that this Article XI
-------- -------
shall not eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of Title 8 of the General
Corporation Law, or (iv) for any
<PAGE>

transaction from which the director derived an improper personal benefit. If the
General Corporation Law is amended to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of directors of the Corporation shall be eliminated or limited to the fullest
extent permitted by the General Corporation Law, as so amended. No amendment to
or repeal of this Article XI shall apply to or have any effect on the liability
or alleged liability of any director of the Corporation for or with respect to
any acts or omissions of such director occurring at the time of or prior to such
amendment or repeal.

ARTICLE XII

Reorganization

Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.

ARTICLE XIII

Corporate Opportunities

To the fullest extent permitted by law, so long as the Corporation is
controlled by, or under common control with, Synetic, Inc., a Delaware
corporation ("Synetic," which term shall include any successor to Synetic), (i)
-------
directors or officers of the Corporation who are also directors or officers of
Synetic shall be obligated to present to the corporation a potential acquisition
which may be made by either the Corporation or Synetic of a business Engaged (as
defined below) in the Company's Business (as defined below) and (ii) directors
or officers of the Corporation who are also directors or officers of Synetic
shall have no obligation to present to the Corporation a potential acquisition
which may be made by either the Corporation or Synetic of a business which is
not Engaged in the Company's Business to the Corporation. For purposes of this
Article XIII: (A) the term "Synetic" shall also be deemed to include each
subsidiary of Synetic and each other entity in which Synetic owns (directly or
indirectly) more then 50% of the outstanding voting capital stock or voting
power; (B) an entity shall be deemed to be "Engaged" in any business from which
-------
it derived more than 10% of its net revenues for the fiscal year most recently
completed prior to such measurement (provided, however, that the net revenues of
any businesses acquired during such fiscal year or since the end of such fiscal
year shall be taken into account, on a pro forma basis, in calculating net
revenues for such fiscal year); and (C) the "Company's Business" shall mean the
------------------
provision of electronic commerce prescription, laboratory and
managed care communication services that connect physicians with payers
(including without limitation, indemnity insurance companies, HMOs, PBMs and
employers), pharmacies and laboratories for purposes of this Article XIII
(provided, however, that in no event shall the business transacted using such
communication services or the businesses of the persons and entities connected
by such communication services be deemed to be part of the "Company's
Business").

<PAGE>

ARTICLE XIV

Amendment

The Corporation reserves the right to amend, alter, change or repeal
any provision of this Certificate of Incorporation, in the manner now or
hereafter prescribed by law, and all rights conferred on stockholders in this
Certificate of Incorporation are subject to this reservation.

4. This amendment to the Certificate of Incorporation was duly adopted in
accordance with the provisions of Section 242 and Section 245 of the
General Corporation Law of the State of Delaware.
<PAGE>

IN WITNESS WHEREOF, said CAREINSITE, INC. has caused this Certificate to be
signed by David C. Amburgey, its Vice President-General Counsel, on this th
day of June, 1999.

CAREINSITE, INC.

By
-------------------------------
David C. Amburgey
Senior Vice President-General Counsel

<PAGE>

EXHIBIT 3.2

AMENDED AND RESTATED

BY-LAWS

CAREINSITE, INC.

SECTION 1

Stockholders' Meetings

Section 1.1 Annual Meetings. An annual meeting of stockholders shall be
----------------------------
held for the purpose of electing directors and transacting such other business
as may properly come before the meeting.

Section 1.2 Special Meetings. Special meetings of stockholders for any
-----------------------------
purpose or purposes may be called at any time by the Chairman of the Board of
Directors (the "Board"), the Chief Executive Officer of the Corporation or a
majority of the members of the Board, or by a committee of the Board which has
been duly designated by the Board and whose powers and authority, as provided in
a resolution of the Board and in these By-Laws, include the power to call such
meetings. Special meetings shall be held solely for the purpose or purposes
specified in the notice of the meeting.

Section 1.3 Time and Place of Meetings. Each meeting of stockholders
---------------------------------------
shall be held on such date, at such hour, and at such place, either within or
without the State of Delaware, as fixed by the Board from time to time or in the
notice of the meeting or, in the case of an adjourned meeting, as announced at
the meeting at which the adjournment is taken.

Section 1.4 Notice of Meetings; Adjournments. A written notice of each
---------------------------------------------
meeting of stockholders, stating the place, date, and hour of the meeting and,
in the case of a special meeting, the purpose or purposes for which the meeting
is called, shall be given either personally or by mail to each stockholder
entitled to vote at the meeting. Unless otherwise provided

1
<PAGE>

by statute, the notice shall be given not less than ten nor more than sixty days
before the date of the meeting and, if mailed, shall be deposited in the United
States mail, postage prepaid, directed to the stockholder at his address as it
appears on the records of the Corporation. No notice need be given to any person
with whom communication is unlawful, nor shall there be any duty to apply for
any permit or license to given notice to any such person. When any meeting is
convened, the presiding officer, if directed by the Board, may adjourn the
meeting if (a) no quorum is present for the transaction of business or (b) the
Board determines that adjournment is necessary or appropriate in order to enable
the stockholders (i) to consider fully information that the Board determines has
not been made sufficiently or timely available to stockholders or (ii) otherwise
to exercise effectively their voting rights. If the time and place of an
adjourned meeting of stockholders are announced at the meeting at which the
adjournment is taken, no notice need be given of the adjourned meeting unless
that adjournment is for more than 30 days or unless, after the adjournment, a
new record date is fixed for the adjourned meeting. At the adjourned meeting,
any business may be transacted that could have been transacted at the original
meeting.

Section 1.5 Waiver of Notice. Anything herein to the contrary
-----------------------------
notwithstanding, notice of any meeting of stockholders need not be given to any
stockholder who in person or by proxy shall have waived in writing notice of the
meeting, either before or after such meeting, or who shall attend the meeting in
person or by proxy, unless he attends for the express purpose of objecting, at
the beginning of the meeting, to the transaction of any business because the
meeting is not lawfully called or convened.

Section 1.6 Quorum and Manner of Acting. Subject to the provisions of
----------------------------------------
these By-Laws, the Certificate of Incorporation and any statute as to the vote
that is required for a specified action, the presence in person or by proxy of
the holders of a majority of the outstanding shares of the Corporation entitled
to vote at any meeting of stockholders shall constitute a quorum for the
transaction of business, and the vote in person or by proxy of the holders of a
majority of the shares constituting such quorum shall be binding on all
stockholders of the Corporation. A majority of the shares present in person or
by proxy and entitled to vote

2
<PAGE>

may, regardless of whether or not they constitute a quorum, adjourn the meeting
to another time and place. Any business which might have been transacted at the
original meeting may be transacted at any adjourned meeting at which a quorum is
present.

Section 1.7 Voting; Stockholders' Consent in Lieu of Meeting.
-------------------------------------------------------------

1.7.1 Stockholders shall be entitled to vote at all elections of directors
to the extent provided in or pursuant to the Certificate of Incorporation.
Stockholders may vote by proxy but no proxy shall be voted or acted upon after
three years from its date, unless the proxy provides for a longer period.

1.7.2 Unless otherwise provided in any statute, the Certificate of
Incorporation or these By-Laws, any action which may or is required to be taken
at any annual or special meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent in writing setting forth
the action so taken shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted.

Section 1.8 Judges of Election. The votes at each meeting of stockholders
-------------------------------
shall be supervised by not less than two judges who shall decide all questions
respecting the qualification of voters, the validity of the proxies and the
acceptance or rejection of votes. The judges shall be appointed by the Board
but if, for any reason, there are less than two judges present and acting at any
meeting, the chairman of the meeting shall appoint an additional judge or judges
so that there shall always be at least two judges to act at the meeting.

Section 1.9 List of Stockholders. A complete list of the stockholders
---------------------------------
entitled to vote at each meeting of stockholders, arranged in alphabetical
order, and showing the address and number of shares registered in the name of
each stockholder, shall be prepared and made available for examination during
regular business hours by any stockholder for any purpose germane to the
meeting. The list shall be available for such examination at the place where
the

3
<PAGE>

meeting is to be held for a period of not less than ten days prior to the
meeting and during the whole time of the meeting.

Section 1.10 Advance Notice of Business to be Transacted at Annual
-------------------------------------------------------------------
Meetings.
- --------

1.10.1 To be properly brought before the annual meeting of stockholders,
business must be either (1) specified in the notice of the meeting (or any
supplement thereto) given by or at the direction of the Board (or any duly
authorized committee thereof), (2) otherwise properly brought before the meeting
by or at the direction of the Board (or any duly authorized committee thereof)
or (3) otherwise properly brought before the meeting by any stockholder of the
Corporation (a) who is a stockholder of record on the date of the giving of the
notice provided for in this Section 1.10 and on the record date for the
determination of stockholders entitled to vote at such meeting and (b) who
complies with the notice procedures set forth in this Section 1.10. In addition
to any other applicable requirements, including but not limited to the
requirements, if applicable, of Rule 14a-8 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), for business to be properly brought before an annual meeting by
a stockholder, such stockholder must have given timely notice thereof in proper
written form to the Secretary of the Corporation. Notwithstanding anything in
these By-Laws to the contrary, no business shall be conduced at the annual
meeting of stockholders except business brought before such meeting in
accordance with the procedures set forth in this Section 1.10; provided,
however, that, once business has been properly brought before such meeting in
accordance with such procedures, nothing in this Section 1.10 shall be deemed to
preclude discussion by any stockholder of any such business. If the chairman of
such meeting determines that business was not properly brought before the
meeting in accordance with the foregoing procedures, the chairman shall declare
to the meeting that the business was not properly brought before the meeting and
such business shall not be transacted.

1.10.2 To be timely, a stockholders' notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
Corporation, not less than 60 days nor more than 90 days prior to the
anniversary date of the immediately preceding annual meeting of stockholders;
provided, however, that in the event that the annual meeting is called for a
date

4
<PAGE>

that is not within 30 days before or after such anniversary date, notice by
the stockholder in order to be timely must be so received not later than the
close of business on the tenth day following the day on which such notice of the
date of the annual meeting is mailed or such public disclosure of the date of
the annual meeting is made, whichever first occurs.

1.10.3 To be in proper written form, a stockholder's notice to the
Secretary must set forth as to each matter such stockholder proposes to bring
before the annual meeting (1) a brief description of the business desired to be
brought before the meeting and the reasons for conducting such business at the
meeting, (2) the name and record address of such stockholder, (3) the class or
series and number of shares of capital stock of the Corporation which are owned
beneficially or of record by such stockholder, together with evidence reasonably
satisfactory to the Secretary of such beneficial ownership, (4) a description of
all arrangements or understandings between such stockholder and any other person
or persons (including their names) in connection with the proposal of such
business by such stockholder and any material interest of such stockholder in
such business and (5) a representation that such stockholder intends to appear
in person or by proxy at the annual meeting to bring such business before the
meeting.

SECTION 2
BOARD OF DIRECTORS

Section 2.1 Number, Term, Vacancies.
------------------------------------

2.1.1 The number of directors which shall constitute the whole Board of
the Corporation shall be established from time to time by resolution of the
Board of Directors (subject to the authority of the Board of Directors to
increase or decrease the number of directors to the extent permitted by law).
The directors of the Corporation shall be elected by the stockholders at each
annual meeting of the stockholders and shall hold office until the next annual
meeting of stockholders and until their respective successors have been elected
and qualified, subject, however, to prior death, resignation, disqualification
or removal from office.

2.1.2 The power to fill vacancies on the Board of Directors (whether by
reason or resignation, removal with or without cause, the creation of new
directorships or otherwise) shall

5
<PAGE>

be vested in the Board of Directors, except as provided below, and vacancies may
be filled by a majority of the directors then in office, although less than a
quorum, unless all directorships are vacant, in which case the stockholders
shall fill the then existing vacancies. Any director chosen by the Board of
Directors to fill a vacancy shall hold office only until the next election of
directors by stockholders and until that director's successor shall be elected
and shall have qualified. In the case of removal of a director by the
affirmative vote of holders of record of a majority of the outstanding shares of
stock entitled to vote pursuant to Article IX of the Certificate of
Incorporation, the vacancy created by such removal shall be filled by the
affirmative vote of the holders of record of a majority of the outstanding
shares of stock entitled to vote thereon. Should the stockholders entitled to
vote thereon fail to elect a director to fill a vacancy caused by the removal of
a director by the affirmative vote of the stockholders pursuant to Article IX of
the Certificate of Incorporation, such vacancy shall be filled by the Board of
Directors as provided herein and in the Certificate of Incorporation.

Section 2.2 Election and Notice of Nominations.
-----------------------------------------------

2.2.1 The directors shall be elected annually by the stockholders at the
annual meeting of stockholders by written ballot. At each election, the
nominees receiving the greatest number of votes cast shall be the directors. A
nomination for director shall be accepted, and the votes cast for a nominee
shall be counted by, the judges of election only if the Secretary of the
Corporation has, at least three days prior to the meeting, been advised by the
nominee that he consents to being a nominee and if elected, intends to serve as
a director.

2.2.2 Only persons who are nominated in accordance with the following
procedures shall be eligible for election as directors of the Corporation,
except as may be otherwise provided in the Certificate of Incorporation with
respect to the right of holders of preferred stock of the Corporation to
nominate and elect a specified number of directors in certain circumstances.
Nominations of persons for election to the Board may be made at any annual
meeting of stockholders, or at any special meeting of stockholders called for
the purpose of electing directors, (1) by or at the direction of the Board (or
any duly authorized committee thereof) or (2) by any stockholder of the
Corporation (a) who is a stockholder of record on the date of the

6
<PAGE>

giving of the notice provided for in this Section 2.2 and on the record date of
the determination of stockholders entitled to vote at such meeting and on the
record date for the determination of stockholders entitled to vote at such
meeting and (b) who complies with the notice procedures set forth in this
Section 2.2. In addition to any other applicable requirements, for a nomination
to be made by a stockholder, such stockholder must have given timely notice
thereof in proper written form to the Secretary of the Corporation. No person
shall be eligible for election as a director of the Corporation unless nominated
in accordance with the procedures set forth in this Section 2.2.

2.2.3 To be timely, a stockholders' notice to the Secretary must be
delivered to or mailed and received at the principal executive offices of the
Corporation (1) in the case of an annual meeting, not less than 60 days nor more
than 90 days prior to the anniversary date of the immediately preceding annual
meeting of stockholders; provided, however, that in the event that the annual
meeting is called for a date that is not within 30 days before or after such
anniversary date, notice by the stockholder in order to be timely must be so
received not later than the close of business on the tenth day following the day
on which such notice of the date of the annual meeting is mailed or such public
disclosure of the date of the annual meeting is made, whichever first occurs, or
(2) in the case of a special meeting of stockholders called for the purpose of
electing directors, not later than the close of business on the tenth day
following the day on which notice of the date of the special meeting is mailed
or public disclosure of the date of the special meeting is made, whichever first
occurs.

2.2.4 To be in proper written form, a stockholder's notice to the
Secretary must set forth (1) as to each person whom the stockholder proposes to
nominate for election as a director, (a) the name, age, business address and
residence address of the person, (b) the principal occupation or employment of
the person, (c) the class or series and number of shares of capital stock of the
Corporation which are owned beneficially or of record by the person and (d) any
other information relating to the person that would be required to be disclosed
in a proxy statement or other filings required to be made in connection with
solicitations of proxies for election of directors pursuant to Section 14 of the
Exchange Act and the rules and regulations promulgated thereunder, and (2) as to
the stockholder giving the notice, (a) the name and record address of such
stockholder, (b) the class or series and number of shares of capital stock of
the

7
<PAGE>

Corporation which are owned beneficially or of record by such stockholder,
together with evidence reasonably satisfactory to the Secretary of such
beneficial ownership, (c) a description of all arrangements or understandings
between such stockholder and each proposed nominee and any other person or
persons (including their names) pursuant to which the nomination(s) are to be
made by such stockholder, (d) a representation that such stockholder intends to
appear in person or by proxy at the meeting to nominate the persons named in its
notice and (e) any other information relating to such stockholder that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations or proxies for election of directors
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. Such notice must be accompanied by a written consent of
each proposed nominee to being named as a nominee and to serve as a director if
elected.

2.2.5 The Chairman of the meeting may, if the facts warrant, determine,
and declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and if he should so determine, he shall so declare to the
meeting and the defective nomination shall be disregarded.

Section 2.3 Organization Meetings As promptly as practicable after each
----------------------------------
annual meeting of stockholders, an organization meeting of the Board shall be
held for the purpose of organization, election for officers and the transaction
of any other business.

Section 2.4 Stated Meetings. The Board may provide for stated meetings of
----------------------------
the Board.

Section 2.5 Special Meetings. Special meetings of the Board may be called
-----------------------------
from time to time by any three directors, by the Chairman of the Board, by the
chief executive officer or by the chief financial officer of the Corporation.

Section 2.6 Business of Meetings. Except as otherwise expressly provided
---------------------------------
by these By-Laws, any and all business may be transacted at any meeting of the
Board; provided, however,

8
<PAGE>

that the business transacted at a special meeting shall be limited to the
purpose or purposes specified in the notice of that meeting.

Section 2.7 Time and Place of Meetings. Subject to the provisions of
---------------------------------------
Section 2.3, each meeting of the Board shall be held on such date, at such hour
and in such place as fixed by the Board or in the notice of the meeting or, in
the case of an adjourned meeting, as announced at the meeting at which the
adjournment is taken.

Section 2.8 Notice of Meetings. No notice need be given of any
-------------------------------
organization or stated meeting of the Board for which the date, hour and place
have been fixed by the Board. Notice of the date, hour and place of all other
meetings, and of all special meetings, shall be given to each director
personally, or by telephone, telegraph, facsimile transmission, electronic mail
or similar electronic transmission or by mail. If by mail, the notice shall be
deposited in the United States mail, postage prepaid, addressed to the director
at his residence or usual place of business as the same appears on the books of
the Corporation not later than four days before the meeting. If given by
telegraph, facsimile transmission, electronic mail or similar electronic
transmission the notice shall be directed to the director at his residence or
usual place of business as the same appears on the books of the Corporation not
later than at any time during the day before the meeting. lf given personally
or by telephone, the notice shall be given not later than, and at any time
during the day before the meeting.

Section 2.9 Waiver of Notice. Anything herein to the contrary
-----------------------------
notwithstanding, notice of any meeting of the Board need not be given to any
director who shall have waived in writing notice of the meeting, either before
or after the meeting, or who shall attend such meeting, unless he attends for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.

Section 2.10 Attendance by Telephone. Directors may participate in
-------------------------------------
meetings of the Board by means of conference telephone or similar communications
equipment by which all

9
<PAGE>

directors participating in the meeting can hear one another and participate, and
such participation shall constitute presence in person at the meeting.

Section 2.11 Quorum and Manner of Acting. A majority of the total number
-----------------------------------------
of directors at the time provided for pursuant to Section 2.1 shall constitute a
quorum for the transaction of business at any meeting of the Board and, except
as otherwise provided in these By-Laws, in the Certificate of Incorporation or
by statute, the act of a majority of the directors present at any meeting at
which a quorum is present shall be the act of the Board. A majority of the
directors present at any meeting, regardless of whether or not they constitute a
quorum, may adjourn the meeting to another time and place. Any business which
might have been transacted at the original meeting may be transacted at any
adjourned meeting at which a quorum is present.

Section 2.12 Action Without a Meeting. Any action which could be taken at
--------------------------------------
a meeting of the Board may be taken without a meeting if all the directors
consent to the action in a writing filed with the minutes of the Board.

Section 2.13 Compensation of Directors. Each director of the Corporation
---------------------------------------
who is not a salaried officer or employee of the Corporation, or of a subsidiary
of the Corporation, may receive compensation for serving as a director and for
serving as a member of any Committee of the Board, and may also receive fees for
attendance at any meetings of the Board or of any Committee of the Board, and
the Board may from time to time fix the amount and method of payment of such
compensation and fees. The Board may also, by vote of a majority of
disinterested directors, provide for and pay fair compensation to directors
rendering services to the Corporation not ordinarily rendered by directors as
such.

Section 2.14 Resignation of Directors. Any director may resign at any time
-------------------------------------
upon written notice to the Corporation. The resignation shall become effective
at the time specified in the notice and, unless otherwise provided in the
notice, acceptance of the resignation shall not be necessary to make it
effective.

10
<PAGE>

Section 2.15 Removal of Directors. Any director may be removed, either
----------------------------------
for or without cause, at any time, by the affirmative vote of the holders of
record of a majority of the outstanding shares of stock entitled to vote, and
the vacancy in the Board caused by such removal shall be filled as provided in
the Certificate of Incorporation; provided that where the holders of any class
or series of Preferred Stock are entitled to elect one or more directors the
provisions of the Certificate of Designation of such class or series of
Preferred Stock shall apply, in respect of removal, with or without cause, of a
director or directors so elected.

SECTION 3
COMMITTEES OF THE BOARD OF DIRECTORS

Section 3.1 Executive Committee. By resolution adopted by an affirmative
--------------------------------
vote of the majority of the whole Board, the Board may appoint an Executive
Committee consisting of the chief executive officer of the Corporation, an ex
officio as a non-voting member if he is not otherwise a director, and two or
more other directors and, if deemed desirable, one or more directors as
alternate members who may replace any absentee or disqualified member at any
meeting of the Executive Committee. If so appointed, the Executive Committee
shall, when the Board is not in session, have all the power and authority of the
Board in the management of the business and affairs of the Corporation not
reserved to the Board by Section 3.3. The Executive Committee shall keep a
record of its acts and proceedings and shall report the same from time to time
to the Board.

Section 3.2 Other Committees. By resolution adopted by an affirmative
-----------------------------
vote of the majority of the whole Board, the Board may from time to time appoint
such other Committees of the Board, consisting of one or more directors and, if
deemed desirable, one or more directors who shall act as alternate members and
who may replace any absentee or disqualified member at any meeting of the
Committee, and may delegate to each such Committee any of the powers and
authority of the Board in the management of the business and affairs of the
Corporation not

11
<PAGE>

reserved to the Board pursuant to Section 3.3. Each such Committee shall keep a
record of its acts and proceedings.

Section 3.3 Powers Reserved to the Board. No Committee of the Board shall
-----------------------------------------
take any action to amend the Certificate of Incorporation or these By-Laws,
adopt any agreement to merge or consolidate the Corporation, declare any
dividend or recommend to the stockholders a sale, lease or exchange of all or
substantially all of the assets and property of the Corporation, a dissolution
of the Corporation or a revocation of a dissolution of the Corporation; nor
shall any Committee of the Board take any action which is required in these By-
Laws, in the Certificate of Incorporation or by statute to be taken by a vote of
a specified proportion of the whole Board.

Section 3.4 Election of Committee Members; Vacancies. So far as
-----------------------------------------------------
practicable, members of Committees of the Board and their alternates (if any)
shall be appointed at each organization meeting of the Board and, unless sooner
discharged by an affirmative vote of the majority of the whole Board, shall hold
office until the next organization meeting of the Board and until their
respective successors are appointed. In the absence or disqualification of any
member of a Committee of the Board, the member or members (including alternates)
present at any meeting of the Committee and not disqualified from voting,
whether or not he or they constitute a quorum, may unanimously appoint another
director to act at the meeting in place of any absent or disqualified member.
Vacancies in Committees of the Board created by death, resignation or removal
may be filled by an affirmative vote of a majority of the whole Board.

Section 3.5 Meetings. Each Committee of the Board may provide for stated
---------------------
meetings of such Committee. Special meetings of each Committee may be called by
any two members of the Committee. The provisions of Section 2 regarding the
business, time and place, notice and waivers of notice of meetings, attendance
at meetings and action without a meeting shall apply to each Committee of the
Board, except that the references in such provisions to the directors and the
Board shall be deemed respectively to be references to the members of the
Committees and to the Committee.

12
<PAGE>

Section 3.6 Quorum and Manner of Acting. A majority of the members of
-----------------------------------------
any Committee of the Board shall constitute a quorum for the transaction of
business at meetings of the Committee, and the act of a majority of the members
present at any meeting at which a quorum is present shall be the act of the
Committee. A majority of the members present at any meeting, regardless of
whether or not they constitute a quorum, may adjourn the meeting to another time
or place. Any business which might have been transacted at the original meeting
may be transacted at any adjourned meeting at which a quorum is present.

SECTION 4
OFFICERS

Section 4.1 Election and Appointment. The elected officers of the
-------------------------------------
Corporation shall consist of the Chairman of the Board, a President, one or more
Vice Presidents, a Treasurer, a Secretary and such other elected officers as
shall from time to time be designated by the Board. The Board shall designate
from among such elected officers a chief executive officer and a chief financial
officer of the Corporation and may from time to time make, or provide for, other
designations it deems appropriate. The Board may also appoint, or provide for
the appointment of, such other officers and agents as may from time to time
appear necessary or advisable in the conduct of the affairs of the Corporation.
Any number of offices may be held by the same person, except no person may at
the same time be both the chief executive officer and the chief financial
officer.

Section 4.2 Duties of Chief Executive Officer. In the absence of the
----------------------------------------------
Chairman, the chief executive officer of the Corporation shall preside at all
meetings of stockholders and at all meetings of the Board and the Executive
Committee and, except to the extent otherwise provided in these By-Laws or by
the Board, shall have general authority to execute any and all documents in the
name of the Corporation and to supervise and control all of the business and
affairs of the Corporation. In the absence of the chief executive officer, his
duties shall be performed and his power may be executed by the chief financial
officer or by such other officer as shall be

13
<PAGE>

designated either by the chief executive officer in writing or (failing such
designation) by the Executive Committee or the Board.

Section 4.3 Duties of Other Officers. The other officers of the
-------------------------------------
Corporation shall have such powers and duties not inconsistent with these By-
Laws as may from time to time be conferred upon them in or pursuant to
resolutions of the Board, and shall have such additional powers and duties not
inconsistent with such resolutions as may from time to time be assigned to them
by any competent superior officer. The Board shall assign to one or more of the
officers of the Corporation the duty to record the proceedings of the meetings
of the stockholders and the Board in a book to be kept for that purpose.

Section 4.4 Terms of Office and Vacancy. So far as practicable, the
----------------------------------------
elected officers shall be elected at each organization meeting of the Board, and
shall hold office until the next organization meeting of the Board and until
their respective successors are elected. If any vacancy should occur in any
office, the Board may elect a successor for the remainder if the term of that
office. Officers shall hold office at the pleasure of the Board. Any officer
may resign by written notice to the Corporation.

Section 4.5 Removal of Elected Officers. Elected officers may be removed
----------------------------------------
at any time, either for or without cause, by the Board at a meeting called for
that purpose.

Section 4.6 Compensation of Elected Officers. The compensation of all
---------------------------------------------
elected officers of the Corporation shall be fixed from time to time by the
Board.

SECTION 5
SHARES AND TRANSFERS OF SHARES

Section 5.1 Certificates. Every stockholder shall be entitled to a
-------------------------
certificate signed by the Chairman or the President or a Vice President and by
the Treasurer or an Assistant Treasurer

14
<PAGE>

or the Secretary or an Assistant Secretary, certifying the class and number of
shares owned by him in the Corporation; provided, that, where such certificate
is countersigned by a Transfer Agent or Registrar, the signature of any such
Chairman, President, Vice President, Treasurer, Assistant Treasurer, Secretary,
or Assistant Secretary may be facsimile. In case any officer or officers who
shall have signed or whose facsimile signature or signatures shall have been
used on any such certificate or certificates shall cease to be such officer or
officers, whether because of death, resignation, or otherwise, before such
certificate or certificates shall have been issued by the Corporation, such
certificate or certificates may be issued by the Corporation with the same
effect as if he or they were such officer or officers at the date of issue.

Section 5.2 Transfer Agents and Registrars. The Board may, in its
-------------------------------------------
discretion, appoint one or more responsible banks or trust companies from time
to time, to act as Transfer Agents and Registrars of shares of the Corporation;
and, when such appointments shall have been made, no certificate for shares of
the Corporation shall be valid until countersigned by one of such Transfer
Agents and registered by one of such Registrars.

Section 5.3 Transfer of Shares. Shares of the Corporation may be
-------------------------------
transferred by delivery of the certificates therefor, accompanied either by an
assignment in writing on the back of the certificates or by written power of
attorney to sell, assign, and transfer the same, signed by the record holder
thereof; but no transfer shall affect the right of the Corporation to pay any
dividend upon the shares to the holder of record thereof, or to treat the holder
of record as the holder in fact thereof for all purposes, and no transfer shall
be valid, except between the parties thereto, until such transfer shall have
been made upon the books of the Corporation.

Section 5.4 Lost Certificates. In case any certificate for shares of the
------------------------------
Corporation shall be lost, stolen, or destroyed, the Board, in its discretion,
or any Transfer Agent thereunto duly authorized by the Board, may authorize the
issuance of a substitute certificate in place of the certificate so lost,
stolen, or destroyed, and may cause such substitute certificate to be
countersigned by the appropriate Transfer Agent (if any) and registered by the
appropriate

15
<PAGE>

Registrar (if any); provided that, in each such case, the applicant for a
substitute certificate shall furnish to the Corporation, and to such of its
Transfer Agents and Registrars as may require the same, evidence to their
satisfaction, in their discretion, of the loss, theft or destruction of such
certificate and of the ownership thereof, and also such bond, security or
indemnity as may then be required.

Section 5.5 Record Dates. In order that the Corporation may determine the
-------------------------
stockholders entitled to notice of or to vote at any meeting of stockholders, or
any adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of shares or for the purpose of
any other lawful action, the Board may fix, in advance, a record date which
shall be not more than sixty nor less than ten days before the date of any
meeting of stockholders, and not more than sixty days prior to any other action.
In such case, those stockholders, and only those stockholders, who are
stockholders of record on the date fixed by the Board, shall, notwithstanding
any subsequent transfer of shares on the books of the Corporation, be entitled
to notice of and to vote at such meeting of stockholders, or any adjournment
thereof, or entitled to receive payment of such dividend or other distribution
or allotment of rights, or entitled to exercise rights in respect of any such
change, conversion or exchange of shares or to participate in any such other
lawful action.

SECTION 6
MISCELLANEOUS

Section 6.1 Fiscal Year. The fiscal year of the Corporation shall end on
------------------------
June 30 of each year.

Section 6.2 Surety Bonds. The Chief Financial Officer, the Treasurer,
-------------------------
each Assistant Treasurer, and such other officers and agents of the Corporation
as the Board may from time to time direct, shall be bonded at the expense of the
Corporation for the faithful performance of

16
<PAGE>

their duties in such amounts and by such surety companies as the Board may from
time to time determine.

Section 6.3 Signature of Negotiable Instruments. All bills, notes, checks
------------------------------------------------
or other instruments for the payment of money shall be signed or countersigned
in such manner as from time to time may be prescribed by resolution of the
Board.

Section 6.4 Auditor. The Board shall appoint an Auditor to discharge the
--------------------
duties provided herein. Among other duties, it shall be the duty of the Auditor
so appointed to make periodic audits of the books and accounts of the
Corporation. After the close of the fiscal year and in accordance with
applicable law, the stockholders shall be furnished with consolidated financial
statements of the Corporation and its consolidated subsidiaries, as at the end
of such fiscal year, duly certified by such Auditor, subject to such notes or
comments as the Auditor shall deem necessary or desirable for the information of
the stockholders.

Section 6.5 Indemnification of Officers, Directors, Employees, Agents, and
---------------------------------------------------------------------------
Fiduciaries; Insurance.
- ----------------------

(a) The Corporation shall indemnify, in accordance with and to the fullest
extent permitted by the laws of the State of Delaware, as in effect at the time
of the adoption of this Section 6.5, or as such laws may be amended from time to
time, to the fullest extent permitted by such laws, any person (and the heirs
and legal representatives of any such person) made or threatened to be made a
party to any threatened, pending, or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that such person is or was a director, officer, employee, agent or fiduciary of
the Corporation or any constituent absorbed in a consolidation or merger, or
serves as such with another corporation, or with a partnership, joint venture,
trust or other enterprise at the request of the Corporation of any such
constituent corporation.

(b) By action of the Board, notwithstanding any interest of the directors
in such action, the Corporation may purchase and maintain insurance in such
amounts as the Board

17
<PAGE>

deems appropriate on behalf of any person who is or was a director, officer,
employee, agent, or fiduciary of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee, agent or fiduciary
of another enterprise against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether or not
the Corporation shall have the power to indemnify him against such liability
under the provisions of this Section.

Section 6.6 Offices. The registered office of the Corporation in the
--------------------
State of Delaware is to be located at the principal office of The Corporation
Trust Company in the City of Wilmington, County of New Castle, and the
registered agent in charge thereof shall be The Corporation Trust Company. The
Corporation may have other offices within or without the State of Delaware.

SECTION 7
BY-LAW AMENDMENTS

Section 7.1 By the Stockholders. These By-laws may be amended by the
--------------------------------
stockholders at a meeting called for the purpose in any manner not inconsistent
with any provision of law or the Certificate of Incorporation.

Section 7.2 By the Directors. These By-laws may be amended by the
-----------------------------
Board in any manner not inconsistent with any provision of law or the
Certification of Incorporation.

<PAGE>

EXHIBIT 10.14

TAX SHARING AGREEMENT
---------------------

THIS TAX SHARING AGREEMENT (the "Agreement") is made and entered into as of
June __,1999 by and among Synetic, Inc., a Delaware corporation ("Synetic"), and
CareInsite, Inc., a Delaware corporation ("CareInsite").

WHEREAS, CareInsite is making an initial public offering (the "Offering")
of its stock as contemplated by the Registration Statement (No. 333-75071);

WHEREAS, as a result of the Offering, CareInsite will cease to be a member
of Synetic's consolidated group for federal income tax purposes;

WHEREAS, CareInsite shall remain a member of Synetic's combined group for
California state and local tax purposes; and

WHEREAS, the parties hereto desire to set forth their agreements with
regard to their respective liabilities for federal, state and local taxes for
periods before and after the Offering and to provide for certain other tax
matters;

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties do hereby agree as follows:

1. Remittance to Synetic. (a) For all periods prior to the Offering and
---------------------
during which CareInsite has been included in the consolidated federal income tax
returns of Synetic and with respect to years in which CareInsite is required to
be included in the consolidated federal income tax returns of Synetic but for
which such returns have not yet been filed, CareInsite shall remit to Synetic in
a timely manner all federal income taxes that would have been due had CareInsite
filed a separate federal income tax return for the applicable period. If, in
determining its separate federal income tax liability, CareInsite determines
that it would experience a net operating loss resulting in no federal income tax
liability for a taxable period in which it was included in Synetic's
consolidated federal income tax return, CareInsite shall be entitled to a
payment from Synetic, calculated by Synetic and equal to the reduction in the
federal income tax liability of the Synetic consolidated group by reason of the
use of such net operating loss. If during the period that CareInsite files a
consolidated return with Synetic, CareInsite owns one or more subsidiaries that
are also included in the Synetic consolidated return, then, for purposes of this
Agreement, the tax which would have been payable by CareInsite and its
subsidiary (or subsidiaries) if they had filed separate federal income tax
return shall be computed as if CareInsite and its subsidiary had filed a
separate consolidated return.
<PAGE>

(b) For all periods during which CareInsite has been, is or will be
included in one or more state and local income tax returns with Synetic on a
combined, unitary or other consolidated basis (hereinafter "Combined Returns"),
CareInsite has or will remit to Synetic in a timely manner all taxes that would
have been due any state or local government from CareInsite if it had filed a
separate state or local income tax return for the applicable period. If during
the period that CareInsite files a Combined Return with Synetic, CareInsite owns
one or more subsidiaries that are also included in the Combined Return, then,
for purposes of this Agreement, the tax which would have been payable by
CareInsite and its subsidiary (or subsidiaries) if they had filed separate state
or local income tax returns shall be computed as if CareInsite and its
subsidiary had filed a Combined Return as a separate, combined or unitary group.
If, in determining its separate state or local income tax liability, CareInsite
determines that it would experience a net operating loss resulting in no state
or local income tax liability for a taxable period in which it was included in
Synetic's Combined Return, CareInsite shall be entitled to a payment from
Synetic, calculated by Synetic and equal to the reduction in the state or local
income tax liability of the Synetic combined group by reason of the use of such
net operating loss.

2. Taxes Due; Indemnification. Synetic has been and shall continue to be
--------------------------
responsible for all federal, state or local income taxes due as a result of the
filing of all consolidated, combined or unitary income tax returns which include
CareInsite. Except for payments required to be made by CareInsite to Synetic in
accordance with this Agreement, Synetic shall indemnify CareInsite for all
income tax liabilities for periods during which CareInsite was included in
Synetic's consolidated income tax returns (including, for state and local tax
liabilities, all income tax liabilities for periods during which CareInsite was,
or will be, included in Synetic's Combined Returns).

3. Refunds. Synetic shall remit to CareInsite in a timely manner all
-------
refunds, together with interest thereon and net of any tax cost to Synetic, that
would be due CareInsite as if CareInsite had filed income tax returns on a
separate basis (determined in the same manner as in section 1 of this
Agreement).

4. Parent Tax Items. (a) For purposes of this section 4, "Parent Tax
----------------
Items" shall mean income, gain, loss or deductions in respect of (i) the grant,
exercise, vesting or disposition by an employee of CareInsite of a stock option
on stock of Synetic acquired pursuant to one or more employee stock option plans
or similar arrangements of Synetic, and (ii) any legal expenses, settlement
payments, monetary damages, costs and related items involving the Merck
litigation (as defined in the Indemnification Agreement by and between Synetic
and CareInsite dated January 2, 1999 (the "Indemnification Agreement")) for the
account, or on behalf of, CareInsite and that are paid, reimbursed or otherwise
indemnified against by Synetic pursuant to the Indemnification Agreement.
<PAGE>

(b) CareInsite shall calculate for each tax year that ends following
the Offering (each a post-offering tax year) (i) the aggregate amount of income
taxes actually payable by CareInsite and any of its subsidiaries, for such post-
offering tax year ("CareInsite's Actual Tax Liability") and (ii) the aggregate
amount of income taxes that would have been payable by CareInsite and any of its
subsidiaries if determined without regard to any Parent Tax Items ("CareInsite's
Hypothetical Tax Liability"). The Actual Tax Liability and Hypothetical Tax
Liability shall be calculated both for federal, state and local income taxes
including state franchise taxes imposed in lieu of an income tax. In
calculating CareInsite's Actual Tax Liability and CareInsite's Hypothetical Tax
Liability, net operating losses, to the extent generated by Parent Tax Items in
prior taxable years, shall be treated as Parent Tax Items in carryforward years.
CareInsite shall provide Synetic with copies of its calculations of CareInsite's
Actual Tax Liability and CareInsite's Hypothetical Tax Liability, together with
any documentation or supporting information reasonably requested by Synetic to
enable it to verify the accuracy of such calculations, within thirty (30) days
following the filing of all income tax returns of CareInsite with respect to
such post-offering tax year.

(c) If, for any post-offering tax year, CareInsite's Actual Tax
Liability is greater than CareInsite's Hypothetical Tax Liability, Synetic shall
pay CareInsite an amount equal to such difference. If, for any post-offering
tax year, CareInsite's Hypothetical Tax Liability is greater than CareInsite's
Actual Tax Liability, CareInsite shall pay Synetic an amount equal to such
difference. Payments under this section shall be made by the later of (i)
forty-five (45) days following the filing of all tax returns of CareInsite for
the applicable post-offering tax period, and (ii) ten (10) days after the date
that a final agreement is reached as to the calculation of CareInsite's Actual
Tax Liability and CareInsite's Hypothetical Tax Liability for such post-offering
tax year.

(d) CareInsite shall report each of the Parent Tax Items to the
fullest extent, and in the earliest tax year following the Offering, allowable
under applicable law after taking into account the various limitations under the
Code to which those items may be subject in such tax years.

(e) Synetic shall provide CareInsite on a timely basis with such
information, documentation and assistance as is necessary or otherwise
reasonably requested by CareInsite in order to compute the Parent Tax Items, and
to satisfy any and all reporting, withholding and payroll tax obligations under
the Code and applicable state and local law. Without limiting the foregoing,
Synetic shall deliver to CareInsite, in sufficient time for CareInsite to comply
with its tax return reporting and wage withholding obligations (including FICA
and FUTA), the identity of, and amount of compensation per, individual, and any
documentation and other information in support thereof reasonably requested by
CareInsite or any tax authority.
<PAGE>

(f) If CareInsite's Actual Tax Liability or CareInsite's Hypothetical
Tax Liability for any post-offering tax year changes (by reason of the filing of
amended tax returns, audit adjustments agreed to with a tax authority, final
dispositions of administrative or judicial proceedings), CareInsite shall
recalculate CareInsite's Actual Tax Liability and CareInsite's Hypothetical Tax
Liability for such post-offering tax year. Synetic and CareInsite shall
promptly notify each other of any change or event that might give rise to such a
change. CareInsite shall provide Synetic with copies of its recalculations,
together with any documentation or supporting information reasonably requested
by Synetic to enable it to verify the accuracy of such recalculations, within
thirty (30) days following any such change.

(g) Notwithstanding anything to the contrary in this section 4,
nothing in this Agreement shall require CareInsite or Synetic to make payments
to each other on account of an item described in section 4(a)(ii) to the extent
the tax benefit or detriment of such item has been taken into account in
computing the amount indemnified against under section 1 of the Indemnification
Agreement.

5. Net Operating Losses. If for any taxable year beginning on or after
--------------------
the Offering, CareInsite incurs a net operating loss that may be carried back to
a taxable year for which a consolidated federal income tax return was filed,
CareInsite shall make an election for federal income tax purposes to relinquish
the entire carryback period with respect to any such net operating loss.

6. Audits. Synetic shall have responsibility for and control over any
------
tax controversy or audit with respect to federal income taxes of members of its
consolidated group for federal income tax purposes and with respect to state and
local income taxes of members with which it files Combined Returns for state and
local income tax purposes. Notwithstanding the preceding sentence, if, with
respect to any proposed adjustment, CareInsite would bear a substantially
greater economic burden than Synetic in the event the proposed adjustment was
sustained, then Synetic shall consult with CareInsite and allow CareInsite to
participate in the audit or controversy with respect to that adjustment,
provided, however, that Synetic shall have ultimate control over and
responsibility for any such audit or controversy. In the event of any changes
to such consolidated federal income tax returns or Combined Returns upon audit
by the relevant taxing authority, a recalculation of the tax liability of
CareInsite shall be made and appropriate payments (including any interest and
penalties) shall be made between CareInsite and Synetic based on the result of
such audit. Synetic shall not consent to any adjustments which would increase
the tax liabiltiy of CareInsite without the consent of CareInsite, which consent
shall not be unreasonably withheld and provided that Synetic may consent to such
adjustments if (at the request and expense of CareInsite) Synetic has the right
to and does file a refund claim which preserves the right of CareInsite to
contest the adjustment.
<PAGE>

7. Filing of Returns. Synetic shall be responsible for filing the
-----------------
consolidated federal income tax returns and the Combined Returns, and for making
all elections with respect thereto, for all periods during which CareInsite is
or was included in such returns. CareInsite (and any of its subsidiaries) shall
furnish Synetic at least sixty (60) days before the due date (including
extensions) of any such consolidated or Combined Return with its completed
section of such return, prepared in accordance with this Agreement, in
accordance with instructions from Synetic. The parties agree to cooperate with
each other in the preparation of all required tax returns and in connection with
the audit of such tax returns including making available to each other all
applicable records and other documents pertinent thereto.

8. Dispute Resolution. In an effort to resolve informally and amicably
------------------
any claim or controversy arising out of or related to the interpretation or
performance of this Agreement without resorting to litigation, the parties shall
first notify the other parties of any difference or dispute hereunder that
requires resolution. The disputing parties shall each designate an employee to
investigate, discuss and seek to settle the matter between them. If such
parties are unable to settle the matter within thirty (30) days after such
notification, the matter shall be submitted to an independent public accounting
firm or law firm of recognized national standing and mutually acceptable to the
parties, which shall issue its determination (which determination shall be final
and binding as to the parties absent manifest error) within thirty (30) days.

9. Assignment. No party shall assign or transfer any of its rights under
----------
this Agreement without the prior written consent of the other parties.

10. Notices. All notices, requests, demands and other communications
-------
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed
in any general or branch office of the United States Postal Service, enclosed in
a registered or certified postpaid envelope, or sent by Federal Express or other
similar overnight courier service, addressed to the address of the parties
stated below or to such changed address as such party may have fixed by notice
or, if given by telecopier, when such telecopy is transmitted and the
appropriate answerback is received.

If to Synetic:

Synetic, Inc.
669 River Drive, River Drive Center II
Elmwood Park, New Jersey 07407
Attention: Chief Financial Officer
<PAGE>

If to CareInsite:

CareInsite, Inc.
669 River Drive, River Drive Center II
Elmwood Park, New Jersey 07407
Attention: Chief Financial Officer

11. Governing Law. This Agreement shall be governed by the laws of the
-------------
State of New York.

12. Entire Agreement. This Agreement constitutes the entire understanding
----------------
between the parties and supersedes all proposals, commitments, writings,
negotiations and understandings, oral and written, and all other communications
between the parties relating to the subject matter of this Agreement. This
Agreement may not be amended, terminated or otherwise modified except in writing
duly executed by all of the parties. A waiver by any party of any breach or
violation of this Agreement shall not be deemed or construed as a waiver of any
subsequent breach or violation thereof.

13. Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

14. Severability. Should any part, term or condition hereof be declared
------------
illegal or unenforceable or in conflict with any other law, the validity of the
remaining portions or provisions of this Agreement shall not be affected
thereby, and the illegal or unenforceable portions of the Agreement shall be and
hereby are redrafted to conform with applicable law, while leaving the remaining
portions of this Agreement intact.

15. Headings. Section headings are for convenience only and do not
--------
control or affect the meaning or interpretation of any terms or provisions of
this Agreement.
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date first above written.

Synetic, Inc.

Name: Kirk G. Layman
Title: Senior Vice President -- Finance,
Chief Accounting Officer

CareInsite, Inc.

Name: James R. Love
Title: Executive Vice President and Chief
Financial Officer

<PAGE>

EXHIBIT 10.16

INDEMNIFICATION AGREEMENT
-------------------------

THIS INDEMNIFICATION AGREEMENT (this "Agreement") is made and entered into
as of January 2, 1999 by and between Synetic, Inc., a Delaware corporation
(together with its subsidiaries other than CareInsite, Inc. and CareInsite,
Inc.'s subsidiaries, hereinafter referred to as, "Synetic"), and CareInsite,
Inc., a Delaware corporation (together with its subsidiaries, hereinafter
referred to as, the "Company").

RECITALS
--------

The Company is an indirect subsidiary of Synetic. Synetic and the Company
desire to enter into this Agreement to indemnify each other (and provide for
contribution to each other) against liabilities arising from the operation of
the parties' respective businesses.

AGREEMENT
---------

The parties therefore agree as follows:

1. Indemnification. (a) The Company agrees to indemnify and hold
---------------
harmless Synetic against any and all claims, losses, damages, liabilities, costs
and expenses, joint or several (including reasonable attorneys' fees and costs
of investigation), to which Synetic may become subject insofar as such claims,
losses, damages, liabilities, costs and expenses (or actions in respect thereof)
arise from or are based on the operations of the business of the Company before
or after January 2, 1999, the date of the formation of the Company in connection
with a transaction with Cerner Corporation (the "Formation"); provided, however,
that Synetic shall not be indemnified hereunder for liabilities arising from its
own intentional misconduct or gross negligence or to the extent any liability
arises from a breach by Synetic of its fiduciary duty or contractual obligation
to other stockholders of the Company; provided further, however, that, with
respect to the litigation by Merck & Co., Inc. ("Merck") and Merck-Medco Managed
Care, L.L.C. ("Merck-Medco") against Synetic, the Company and certain other
individual defendants pursuant to a complaint filed on February 18, 1999 in the
Superior Court of New Jersey (the "Merck litigation"), (i) Synetic will bear
both the actual cost of conducting the Merck litigation and any monetary damages
that may be awarded to Merck and Merck-Medco in the Merck litigation; (ii) any
monetary damages awarded to the Company and/or Synetic in the Merck litigation
will be for the account of Synetic; and (iii) Synetic shall not be responsible
for any losses suffered by the Company resulting, directly or indirectly, from
any equitable relief obtained by Merck and Merck-Medco against the Company,
including, but not limited to, any lost profits, other consequential losses,
damages, liabilities, or costs or expenses arising from such equitable relief.

(b) Synetic agrees to indemnify and hold harmless the Company against
any and all claims, losses, damages, liabilities, costs and expenses, joint or
several (including reasonable attorneys' fees and costs of investigation), to
which the Company may become
<PAGE>

subject insofar as such claims, losses, damages, liabilities, costs and expenses
(or actions in respect thereof) arise from or are based on the operations of the
business of Synetic, other than the business of the Company and its
subsidiaries, before or after the Formation.

(c) The Company agrees to indemnify and hold harmless Synetic against
any and all claims, losses, damages, liabilities, costs and expenses, joint or
several (including reasonable attorneys' fees and costs of investigation), to
which Synetic may become subject insofar as such claims, losses, damages,
liabilities, costs and expenses (or actions in respect thereof) arise from or
are based on guarantees or undertakings made by Synetic to third parties in
respect of liabilities or obligations of the Company or its subsidiaries,
whether such guarantees or undertakings are made by Synetic before or after the
Formation; provided, however, that Synetic shall not be indemnified hereunder
for liabilities arising from its own intentional misconduct or gross negligence
or to the extent any liability arises from a breach by Synetic of its fiduciary
duty or contractual obligation to other stockholders of the Company; provided,
further, however, that if the events giving rise to a particular claim, loss,
damages, liability, cost or expenses occurred prior to the Formation, Synetic
shall not be indemnified pursuant to this Section.

(d) The amount of any claims, losses, damages, liabilities, costs and
expenses indemnified against in this Section 1 ("Claims") shall be: (i)
increased to take into account any net tax cost actually incurred by the
indemnitee arising from any payments received from the indemnifying party
(grossed up for such increase), and (ii) reduced to take account of any net tax
benefit actually realized by the indemnitee arising from the incurrence or
payment of any such Claim. In computing the amount of such tax cost or tax
benefit, the indemnitee shall be deemed to recognize all other items of income,
gain, loss, deduction or credit before recognizing any item arising from the
receipt of any payment with respect to a Claim or the incurrence or payment of
any Claim.

2. Substitution. (a) With respect to any litigation, proceeding or
------------
investigation by or before any court or governmental agency or body which may be
commenced or threatened against Synetic after the date hereof which arises out
of or is based upon the future business or operations of the Company, but not of
Synetic, at Synetic's option, the Company and Synetic shall use their best
efforts to have the Company substituted in the place of and for Synetic and to
have Synetic removed as a party as promptly as is reasonably practicable.
Pending such substitution, and in cases where such substitution cannot be
effected, the Company shall promptly assume and direct the defense, prosecution
and/or settlement of the claims involved, employing for this purpose counsel
satisfactory to Synetic, and shall pay all expenses related thereto. To the
extent that any such expenses are paid by Synetic, the Company shall promptly
reimburse Synetic therefor.
<PAGE>

(b) With respect to any litigation, proceeding or investigation by or
before any court or governmental agency or body which may be commenced or
threatened against the Company after the date hereof which arises out of or is
based upon the past, present or future business or operations of Synetic, but
not of the Company, at the Company's option, the Company and Synetic shall use
their best efforts to have Synetic substituted in the place of and for the
Company and to have the Company removed as a party as promptly as is reasonably
practicable. Pending such substitution, and in cases where such substitution
cannot be effected, Synetic shall promptly assume and direct the defense,
prosecution and/or settlement of the claims involved, employing for this purpose
counsel satisfactory to the Company, and shall pay all expenses related thereto.
To the extent that any such expenses are paid by the Company, Synetic shall
promptly reimburse the Company therefor.

3. Notice and Payment of Claim. If either party entitled to
---------------------------
indemnification hereunder (an "Indemnified Party") is threatened in writing with
any claim, or any claim is presented in writing to, or any action or proceeding
formally commenced against, an Indemnified Party which may give rise to the
right of indemnification hereunder, the Indemnified Party will promptly give
written notice thereof to the other party (the "Indemnifying Party"), provided
that any delay by the Indemnified Party in so notifying the Indemnifying Party
shall not relieve the Indemnifying Party of any liability to the Indemnified
Party hereunder except to the extent the Indemnifying Party is materially and
adversely prejudiced by such delay. The Indemnifying Party, by delivery of
written notice to the Indemnified Party within 30 days of receipt of notice of
claim to indemnity from the Indemnified Party, may elect to contest such claim,
action or proceeding at the Indemnifying Party's expense and by counsel of its
own choosing. If the Indemnified Party requests in writing that such claim,
action or proceeding not be contested, then it shall not be contested but shall
not be covered by the indemnities provided herein. The Indemnifying Party may
settle an indemnifiable matter which it has duly elected to contest with the
consent of the Indemnified Party, after delivering a written description of the
proposed settlement to, and receiving consent from, the Indemnified Party. In
the event that the Indemnified Party declines to consent to a bona fide
settlement acceptable to the claimant, then the Indemnified Party shall have no
right to indemnification beyond the amount of the proposed settlement.

4. Dispute Resolution. In an effort to resolve informally and amicably
------------------
any claim or controversy arising out of or related to the interpretation or
performance of this Agreement without resorting to litigation, each party shall
first notify the other of any differences or dispute hereunder that requires
resolution. Synetic and the Company shall each designate an employee to
investigate, discuss and seek to settle the matter between them. If the two are
unable to settle the matter within 30 days after such notification, the matter
shall be submitted to an independent director of each of Synetic and the Company
for consideration. If settlement cannot be reached through their efforts within
an additional 30 days, or such longer time
<PAGE>

period as they shall agree upon, either party may initiate legal proceedings to
resolve such matter.

5. Cooperation. So long as any books, records and files retained by
-----------
Synetic or the Company relating to the business operations or assets of the
Company remain in existence and available, Synetic and the Company shall have
the right upon prior notice to inspect and copy the same at any time during
business hours for any proper purpose. Neither Synetic nor the Company shall
destroy or permit the destruction of (without first having offered to deliver to
the other) any such books, records and files for the time period during which
they would be required to retain such books, records or files by applicable law.
Synetic and the Company shall cooperate with one another in a timely manner in
any administrative or judicial proceeding involving any matter affecting the
potential liability of either Synetic or the Company hereunder or with respect
to any governmental authority. Such cooperation shall include, without
limitation, making available to the other party, during normal business hours,
all books, records and information, officers and employees (without substantial
interruption of employment) necessary or useful in connection with any inquiry,
audit, investigation or dispute, any litigation or any other matter requiring
any such books, records, information, officers or employees for any reasonable
business purpose. The party requesting or otherwise entitled to any books,
records, information, officers, or employees pursuant to this Section shall bear
all reasonable out-of-pocket costs and expenses (except reimbursement of
salaries, employee benefits and general overhead) incurred in connection with
providing such books, records, information, officers or employees.

6. Assignment. Neither party shall assign or transfer any of its rights
----------
under this Agreement without the prior written consent of the other party.

7. Notices. All notices, requests, demands and other communications
-------
provided for by this Agreement shall be in writing (including telecopier or
similar writing) and shall be deemed to have been given at the time when mailed
in any general or branch office of the United States Postal Service, enclosed in
a registered or certified postpaid envelope, or sent by Federal Express or other
similar overnight courier service, addressed to the address of the parties
stated below or to such changed address as such party may have fixed by notice
or, if given by telecopier, when such telecopy is transmitted and the
appropriate answerback is received.

If to Synetic:

Synetic, Inc.
669 River Drive, River Drive Center II
Elmwood Park, New Jersey 07407-1361
Attn: Chief Financial Officer
<PAGE>

If to the Company:

CareInsite, Inc.
669 River Drive, River Drive Center II
Elmwood Park, New Jersey 07407-1361
Attn: Chief Financial Officer

8. Further Assurances. Synetic and the Company shall execute,
------------------
acknowledge and deliver or cause to be executed, acknowledged and delivered such
instruments and take such other action as may be necessary or advisable to
carry out their obligations under this Agreement and under any exhibit, document
or other instruments delivered pursuant hereto.

9. Governing Law. This Agreement shall be governed by the laws of the
-------------
State of New Jersey.

10. Entire Agreement. This Agreement, together with any other agreements
----------------
between the parties, constitutes the entire understanding between the parties
and supersedes all proposals, commitments, writings, negotiations and
understandings, oral and written, and all other communications between the
parties relating to the subject matter of this Agreement. This Agreement may not
be amended or otherwise modified except in writing duly executed by all of the
parties. A waiver by any party of any breach or violation of this Agreement
shall not be deemed or construed as a waiver of any subsequent breach or
violation thereof.

11. Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.

12. Severability. Should any part, term or condition hereof be declared
------------
illegal or unenforceable or in conflict with any other law, the validity of the
remaining portions or provisions of this Agreement shall not be affected
thereby, and the illegal or unenforceable portions of this Agreement shall be
and hereby are redrafted to conform with applicable law, while leaving the
remaining portions of this Agreement intact.

13. Successors and Assigns. Subject to the provisions of Section 6, this
----------------------
Agreement is solely for the benefit of the parties and their respective
successors and assigns. Nothing herein shall be construed to provide any rights
to any other entity or individual.

14. Headings. Section headings are for convenience only and do not
--------
control or affect the meaning or interpretation of any terms or provisions of
this Agreement.
<PAGE>

IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.

Synetic, Inc.

Name: Kirk G. Layman
Title: Senior Vice President -- Finance,
Chief Accounting Officer

CareInsite, Inc.

Name: Paul C. Suthern
Title: President and Chief Executive Officer

<PAGE>

EXHIBIT 10.17

THE 1999 CAREINSITE, INC.
EMPLOYEE STOCK OPTION PLAN

1. Definitions. The terms below shall be defined as indicated.
-----------

1.1 Affiliate means Synetic, any Subsidiary and any person that
---------
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is in common control with, the Company.

1.2 Board means the Board of Directors of the Company, as
-----
constituted from time to time.

1.3 Code means the Internal Revenue Code of 1986, as amended
----
from time to time, or any successor statute thereto.

1.4 Committee means the Committee of the Board described in
---------
Section 3.

1.5 Common Stock means the Company's common stock, par value
------------
$.01 per share.

1.6 Company means CareInsite, Inc., a Delaware corporation, and
-------
any successor corporation which adopts the Plan.

1.7 Designated Officer means any individual who is both an
------------------
officer and director of the Company that the Board or the Committee may
designate pursuant to Section 3 to act on their behalf with respect to the Plan.

1.8 Employee means a person who is employed on a full or part
--------
time basis by the Company, a Subsidiary or an Affiliate.

1.9 Exchange Act means the Securities Exchange Act of 1934, as
------------
amended from time to time, or any successor statute thereto.

1.10 Fair Market Value means, on a specified date, the last sales
-----------------
price of a Share traded on the over-the-counter market, as reported on the
National Association of Securities Dealers Automated Quotation System
("Nasdaq"), or the last closing price for a Share on the stock exchange, if any,
------
on which Shares are primarily traded (or if no Shares were traded on such date,
then on the last previous date on which any Shares were so traded), or if none
of the
<PAGE>

above is applicable, the value of a Share for such date as established by
the Committee, using any reasonable method of valuation; provided however, that,
with respect to Options granted as of the date of the initial public offering of
the Company, the Fair Market Value as of such date shall be the initial public
offering price per Share.

1.11 Incentive Stock Option means an Option which is intended to
----------------------
qualify as an "incentive stock option" within the meaning of Section 422 of the
Code and is designated as such in the applicable Option Agreement.

1.12 Key Consultant means an individual who is a consultant,
--------------
agent, key contractor or other person engaged by the Company, a Subsidiary or an
Affiliate to render services to, or on behalf of, the Company, a Subsidiary or
an Affiliate.

1.13 Key Employee means a person employed by the Company, a
------------
Subsidiary or an Affiliate on a full or part time basis.

1.14 Non-qualified Stock Option means any Option which is not an
--------------------------
Incentive Stock Option.

1.15 Option means an option to purchase Shares granted by the
------
Company pursuant to the Plan.

1.16 Option Agreement means a written agreement as described in
----------------
Section 7 between the Company and the Optionee evidencing an Option.

1.17 Option Period means the period from the date of the granting
-------------
of an Option to the date on which that Option can no longer be exercised.

1.18 Option Price means the price to be paid for the Shares
------------
purchased pursuant to an Option.

1.19 Optionee means any person who is granted an Option under the
--------
Plan.

1.20 Parent means a parent of the Company as defined under
------
Section 424(e) of the Code.

1.21 Plan means the 1999 CareInsite, Inc. Employee Stock Option
----
Plan, as adopted by the Board in substantially the form set forth herein and as
the same may be amended or otherwise modified from time to time.
<PAGE>

1.22 Section 162(m) Optionee means, for a given fiscal year of
-----------------------
the Company, any Optionee designated by the Committee by not later than 90 days
following the start of such year as an Optionee (or such other time as may be
required or permitted by Section 162(m) of the Code) whose compensation for such
fiscal year may be subject to the limit on deductible compensation imposed by
Section 162(m) of the Code.

1.23 Securities Act means the Securities Act of 1933, as amended
--------------
from time to time, or any successor statute thereto.

1.24 Shares means shares of Common Stock.
------

1.25 Subsidiary means a subsidiary of the Company as defined
----------
under Section 424(f) of the Code.

1.26 Synetic means Synetic, Inc., a Delaware corporation, and any
-------
successor corporation.

2. Purpose. The Plan is intended to encourage ownership of Common
-------
Stock by Key Employees and Key Consultants, upon whose judgment and interest the
Company is dependent for its successful operation and growth, in order to
increase their proprietary interest in the Company's success and to encourage
them to remain in the employ of or in an independent contractor relationship
with the Company, its Subsidiary or its Affiliate, as applicable.

3. Administration.
--------------
<PAGE>

3.1 Board, Committee or Designated Officer. The Plan shall be
--------------------------------------
administered by the Board or, if the Board so determines, by a Committee
appointed by the Board from among its members (the "Committee"). The Board or
---------
the Committee may, to the extent permitted by Rule 16b-3 under the Exchange Act
and Section 162(m) of the Code, designate one or more Designated Officers, each
of whom shall be authorized and empowered to exercise such functions and make
such determinations with respect to the Plan and the administration thereof as
the Board or the Committee shall specify in the resolution designating such
officer. Any provision of the Plan to the contrary notwithstanding, (a) in the
event of any inconsistency between any action taken by a Designated Officer and
any action taken by the Committee concerning the Plan or any Options hereunder,
the action taken by the Committee shall govern, (b) in the event of any
inconsistency between any action taken by a Designated Officer or the Committee
and any action taken by the Board concerning the Plan or any Options hereunder,
the action taken by the Board shall govern and (c) no Designated Officer may
take any action except to the extent authorized to do so by a resolution of the
Board or the Committee. Until such time as the Committee is appointed, the
Stock Option Committee of Synetic may grant options under the Plan, provided
that the Board has separately approved such action in the manner required by
Rule 16b-3 under the Exchange Act.

3.2 Determination of Option Terms. Subject to the provisions
-----------------------------
of Sections 8 and 12, the Board, the Committee or any Designated Officer, as
applicable, shall have authority to determine the vesting and exercise schedule
with respect to Options, the persons to whom Options shall be granted, the
number of Shares to be covered by each Option, the time or times at which
Options shall be granted and the terms and provisions of the Options, and to
make all other determinations necessary or advisable for the administration of
the Plan. Options shall become exercisable as specified in the applicable Option
Agreement.

3.3 Interpretation and Construction. The Board, the Committee
-------------------------------
or any Designated Officer, as applicable, shall have the authority to interpret
and construe the provisions of the Plan or of any Option Agreement and, subject
to Section 3.1, such interpretation and construction by the Board, the Committee
or any Designated Officer shall be final and conclusive.

4. Eligible Persons. The Board, the Committee or any Designated
----------------
Officer, as the case may be, may grant Options only to Key Employees or Key
Consultants; provided, however, that an Incentive Stock Option shall not be
granted to any individual who is not an Employee as of the date of grant;
provided further, however, that no Incentive Stock Option shall be granted to
any individual who, at the time such Option is granted, owns (within the meaning
of Section 422 of the Code) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any Parent or Subsidiary,
unless, at the time the Incentive Stock Option is granted, the Option Price is
at least 110% of the Fair Market Value of a Share and the Incentive Stock
Option, by its terms, is not exercisable after the expiration of five years from
<PAGE>

the date such Option is granted; provided further, however, that Incentive Stock
Options shall only be granted to Key Employees who are Employees of the Company
or a Parent or a Subsidiary.

5. Grant of Options.
----------------

5.1 Procedure. Subject to the provisions of Sections 8.1 and
---------
8.2, the Board, the Committee or any Designated Officer, as applicable, may (but
shall not be required to) grant Options, provided that the person to whom the
Option is to be granted subsequently becomes a party to an Option Agreement. An
Option granted pursuant to the Plan shall be presumed to be a Non-qualified
Stock Option, unless the Board or the Committee determines otherwise and so
specifies in the applicable Option Agreement.

5.2 Additional Grants. Subject to Section 8.2 hereof, nothing
-----------------
contained in the Plan shall be construed to preclude either the granting of an
Option to an Optionee to whom one or more Options have already been granted or
the simultaneous granting of more than one Option to the same Optionee.

5.3 Subject to Exchange Rules. Any and all grants of Options
-------------------------
shall be subject to all applicable rules and regulations of Nasdaq or any stock
exchange on which the Common Stock may then be listed.

6. Effective Date and Expiration Date of Plan. The Plan shall be
------------------------------------------
effective as of the date on which the Plan is adopted by the Board and approval
of the Plan is obtained from the stockholders of the Company (the "Effective
---------
Date"). No Option shall be granted under the Plan after the tenth anniversary
- ----
of the Effective Date.

7. Option Agreements. Option Agreements shall be in such form as
-----------------
the Board, the Committee or any Designated Officer, as applicable, shall
approve or determine; provided, however, that all Option Agreements shall comply
with and be subject to the following terms and conditions:

7.1 Manner, Time, and Medium of Payment. An Option shall be
-----------------------------------
exercised in the manner set forth in the Option Agreement relating thereto and
payment in full of the Option Price for all Shares shall be made at the time of
exercise. Payment shall be in United States dollars in the form of cash,
certified check or bank draft, or if the Board, the Committee or any Designated
Officer so determines, by delivery of fully paid Shares, or by withholding
Shares with respect to which the Optionee has exercised such Option, having a
Fair Market Value on the date of exercise equal to the sum of the Option Price
for the withheld Shares and the remaining Shares with respect to which the
Optionee has exercised such Option, or any combination of such methods of
payment.
<PAGE>

7.2 Number of Shares. Subject to Section 9, the Option
----------------
Agreement shall state the number of Shares to which it pertains.

7.3 Option Price. The Option Price shall be determined by the
------------
Board, the Committee or any Designated Officer, as applicable; provided,
however, that in the case of a Non-qualified Stock Option, the Option Price
shall not be less than 85% of the Fair Market Value of a Share as of the date
the Option is granted, and, in the case of an Incentive Stock Option or a Non-
qualified Stock Option granted to a Section 162(m) Optionee, shall not be less
than 100% of the Fair Market Value of a Share as of the date the Option is
granted.

7.4 Option Period. Each Option granted under the Plan shall
-------------
expire no later than ten years (or five years in the case of certain Incentive
Stock Options, as provided in Section 4 hereof) from the date the Option is
granted. Any Option Agreement may contain provisions for the earlier expiration
of the Option in the event of the Optionee's termination of service as a Key
Employee or Key Consultant, retirement or death or in the event of a violation
by an Optionee of any of such Optionee's duties to the Company, any Subsidiary
or any Affiliate.

7.5 Date of Exercise. An Option shall be exercisable at the
----------------
times specified by the Board, the Committee or any Designated Officer, as
applicable, at the time the Option is granted; notwithstanding the foregoing, in
the event of a "Change in Control", the Board may in its sole discretion
determine that any Option granted under the Plan shall become exercisable in
full or in part, whether or not it is then exercisable, except in the case of
any Option granted to any Key Employees or Key Consultants who are also members
of the Board or the Board of Directors of Synetic, in which case such Option
shall become automatically exercisable in the event of a "Change in Control",
unless otherwise provided in such Key Employee's or Key Consultant's employment
agreement or Option Agreement. For purposes of the Plan, a "Change in Control"
-----------------
shall be deemed to have occurred:

(i) when any "person", as defined in Section 3(a)(9) of the
Exchange Act and as used in Sections 13(d) and 14(d) thereof, including a
"group", as defined in Section 13(d) and 14(d) thereof (but excluding
Synetic and its subsidiaries, the Company and its subsidiaries (and any
successor to Synetic or the Company in a transaction which did not result
in a Change in Control), Martin J. Wygod and his affiliates and any
employee benefit plan sponsored or maintained by Synetic or any of its
subsidiaries, the Company or any of its subsidiaries or Martin J. Wygod or
any of his affiliates (including any trustee of such plan acting as
trustee)) directly or indirectly becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act) of: (a) securities of the Company
representing 50 percent or more of the combined power of its then
outstanding securities with respect to the election of directors, or (b)
securities of Synetic representing 50 percent or more of the combined power
of its then
<PAGE>

outstanding securities with respect to the election of directors, so long
as Synetic is the beneficial owner of 50 percent or more of the combined
voting power of the Company's then outstanding securities;

(ii) when, during any period of 24 consecutive months during the
existence of the Plan, the individuals who, at the beginning of such
period, constitute the Board (the "Company Incumbent Directors"), cease for
---------------------------
any reason other than death to constitute at least a majority thereof;
provided, however, that a director who was not a director at the beginning
of such 24-month period shall be deemed to be a Company Incumbent Director
if such director was elected by, or on the recommendation of or with the
approval of at least two-thirds of the directors of the Company, who then
qualified as Company Incumbent Directors, either actually (because they
were directors at the beginning of such 24-month period) or by prior
operation of this Section 7.5(ii);

(iii) when, during any period of 24 consecutive months during
the existence of the Plan, the individuals who, at the beginning of such
period, constitute the Board of Directors of Synetic (the "Synetic
-------
Incumbent Directors"), cease for any reason other than death to constitute
-------------------
at least a majority thereof, so long as Synetic is the beneficial owner of
50 percent or more of the combined voting power of the Company's
outstanding securities at the time such individuals cease to constitute
such majority; provided, however, that a director who was not a director at
the beginning of such 24-month period shall be deemed to be a Synetic
Incumbent Director if such director was elected by, or on the
recommendation of or with the approval of at least two-thirds of the
directors of Synetic, who then qualified as Synetic Incumbent Directors,
either actually (because they were directors at the beginning of such 24-
month period) or by prior operation of this Section 7.5(iii);

(iv) when the stockholders of the Company approve a merger or
consolidation of the Company without the consent or approval of a majority
of the Company Incumbent Directors;

(v) when the stockholders of Synetic approve a merger or
consolidation of Synetic without the consent or approval of a majority of
the Synetic Incumbent Directors, so long as Synetic is the beneficial owner
of 50 percent or more of the combined voting power of the Company's
outstanding securities at the time of such approval;

(vi) when the stockholders of the Company approve a sale or
disposition of all or substantially all of the Company's assets;
<PAGE>

(vii) when the stockholders of Synetic approve a sale or
disposition of all or substantially all of Synetic's assets, so long as
Synetic is the beneficial owner of 50 percent or more of the combined
voting power of the Company's then outstanding securities;

(viii) when the Company adopts a plan of liquidation; or

(ix) when Synetic adopts a plan of liquidation, so long as
Synetic is the beneficial owner of 50 percent or more of the combined
voting power of the Company's then outstanding securities.

In addition, the Board or the Committee, as applicable, may, in its sole
discretion, include provisions in an Option Agreement relating to a change in
control of a Subsidiary. The Board or the Committee may also determine at the
time of grant or thereafter that an Option shall become exercisable in full or
in part, whether or not it is then exercisable, upon such circumstances or
events as such Board or Committee, in its sole discretion, merits special
consideration.

7.6 Reorganization. In case the Company is merged or
--------------
consolidated with another corporation, or in case of a reorganization,
separation or liquidation of the Company, the Board or the board of directors of
any corporation assuming the obligations of the Company hereunder shall either
(i) make appropriate provisions for the protection of any outstanding options by
the substitution on an equitable basis of appropriate securities of the Company,
or appropriate shares or other securities of the merged, consolidated, or
otherwise reorganized corporation, or the appropriate adjustment in the Option
Price, or both, or (ii) give written notice to Optionees that their Options must
be exercised, to the extent then exercisable after giving due effect to Section
7.5, within 60 days of the date of such notice or they will terminate, and to
the extent that such Options are not exercised within such 60-day period they
shall terminate and be of no further effect.

7.7 Transferability; Assignability. No Option shall be
------------------------------
assignable or transferable except by will, by the laws of descent and
distribution or, except in the case of an Incentive Stock Option, pursuant to a
qualified domestic relations order (as such term is defined in the Code), and no
Option may be exercised other than by an Optionee or, after the death of an
Optionee, by that Optionee's personal representatives, heirs, or legatees;
provided, however, that the Committee may, subject to such terms and conditions
as the Committee shall specify, permit the transfer of an Option (other than an
Incentive Stock Option) to an Optionee's family members, to one or more trusts
established in whole or in part for the benefit of one or more of such family
members or to any other entity that is owned by such family members.
<PAGE>

7.8 Continuation with the Company. No Option shall be
-----------------------------
exercisable by an Optionee after the earlier of: (i) the expiration of the
Option Period, or (ii) 30 days after termination of such Optionee's service as a
Key Employee or a Key Consultant or such longer period as may be determined by
the Board, the Committee or any Designated Officer, as applicable (after
considering the provisions of Section 422 of the Code, if applicable), unless
such termination of service occurs by reason of the Optionee's retirement with
the consent of the Company, a Subsidiary or an Affiliate, as the case may be, or
his death. The Board, the Committee or any Designated Officer may provide in an
Option Agreement that service with a Subsidiary or an Affiliate shall not
constitute service with the Company for purposes of such Option Agreement. If
the Optionee's services are terminated because of his retirement with such
consent or death (or if the Optionee dies within 90 days of such retirement or
within 30 days of other termination of service) the Optionee (or the
representative of the estate or the heirs or legatees of a deceased Optionee)
shall have the right to exercise the unexercised portion of the Option which the
Optionee could have exercised as of the date of his retirement or death,
provided that notice of such exercise is given to the Company in writing before
the earlier of: (i) the expiration of the Option Period, and (ii) within 90 days
of the Optionee's retirement or one year of the Optionee's death, as the case
may be, or such longer period as may be determined by the Board, the Committee
or any Designated Officer (after considering the provisions of Section 422 of
the Code, if applicable). Unless otherwise provided in such Optionee's Option
Agreement, if the Optionee's service as a Key Employee or Key Consultant is
terminated because of the Optionee's violation of his duties to the Company, a
Subsidiary or an Affiliate as he may from time to time have, the existence of
which violation shall be determined by the Board, the Committee or any
Designated Officer, as applicable, in his, her or its sole discretion (which
determination shall be conclusive), all of the Optionee's Options shall
terminate immediately and the Optionee shall have no right after such
termination to exercise any Option he might have been able to exercise prior to
his termination of service.

7.9 No Right to Continue Status. Nothing in the Plan or in any
---------------------------
Option granted under the Plan shall confer (or be deemed to confer) any right on
any Optionee to continue as an employee, consultant or other service provider of
the Company, any Subsidiary or any Affiliate or shall interfere in any way with
the right of the Company, any Subsidiary or any Affiliate to terminate such
status at any time, with or without cause and with or without notice.

7.10 Rights as a Stockholder. An Optionee shall have no rights
-----------------------
as a stockholder with respect to Shares covered by any Option until the date the
Company has issued or delivered such Shares to the Optionee, and the Optionee's
name shall have been entered as the stockholder of record on the books of the
Company and then only as to such Shares as are actually issued and delivered to
the Optionee.
<PAGE>

7.11 Other Provisions. Option Agreements shall contain such
----------------
other terms and conditions not inconsistent with the Plan as the Board, the
Committee or any Designated Officer, as applicable, shall deem advisable or as
shall be required by Section 162(m) or 422 of the Code.

7.12 Compliance with Law. Notwithstanding any provision of the
-------------------
Plan or any Option Agreement to the contrary, no Option may be granted or
exercised at any time when such Option or the granting or exercise thereof or
payment therefor may result in the violation of any law or governmental order or
regulation.

7.13 Securities Laws. The Company may require each Optionee to
---------------
represent to the Company, in writing, when an Option is exercised that such
Optionee is exercising such Option for his own account for investment only, and
not with a view to distribution, and that the Optionee will not make any sale,
transfer, or other disposition of any Shares so purchased except (i) pursuant to
a registration statement filed under the Securities Act, which the Securities
and Exchange Commission has declared effective, (ii) pursuant to an opinion of
counsel satisfactory in form and substance to the Company that said sale,
transfer, or other disposition may be made without registration, or (iii)
pursuant to a "no action" letter issued to the Optionee by the Securities and
Exchange Commission. The Company may require each certificate representing
Shares purchased upon the exercise of an Option to bear a legend stating that
the Shares evidenced thereby may not be sold or transferred except in compliance
with the Securities Act and the provisions of the Plan. No Option may be
granted or exercised at a time when such Option, or the granting or exercise
thereof, may result in the violation of any law or governmental order or
regulation.

8. Shares Available for Option.
---------------------------

8.1 Maximum. Subject to Sections 7.6 and 9, no more than
-------
4,000,000 Shares shall be subject to purchase pursuant to Options granted under
the Plan. At all times during the term of the Plan, the Company shall have
reserved that number of Shares less an amount equal to the number of Shares
which have been issued pursuant to the exercise of Options. At all times after
termination of the Plan, the Company shall have reserved for issuance a number
of Shares equal to the aggregate number of Shares subject to outstanding
Options.

8.2 Employee Maximum. Subject to Sections 7.6 and 9 hereof, no
----------------
Optionee shall receive Options under this Plan with respect to an aggregate of
more than 250,000 Shares in any Plan year.

8.3 Expiration or Termination. To the fullest extent
-------------------------
permissible under Rule 16b-3 under the Exchange Act and Section 422 of the Code,
if any outstanding Option under the Plan expires for any reason or is terminated
prior to the expiration date of the Plan as set forth
<PAGE>

in Section 6, the Shares allocable to any unexercised portion of such Option may
again be subject to an Option.

8.4 $100,000 Limitation. Notwithstanding any other provision of
-------------------
this Plan to the contrary, if the aggregate Fair Market Value (determined as of
the time of grant) of the sum of (a) the Shares for which any Optionee is
granted Incentive Stock Options and (b) the securities of the Company or any
Parent or Subsidiary for which such Optionee is granted other incentive stock
options (within the meaning of Section 422 of the Code), which are exercisable
for the first time by such Optionee during any calendar year shall exceed
$100,000, such Incentive Stock Options shall be treated, to the extent of such
excess, as Non-qualified Options.

9. Recapitalization or Change in Par Value of Common Stock. The
-------------------------------------------------------
aggregate number of Shares purchasable under Options granted and which may be
granted pursuant to the Plan and the Option Price for Shares covered by each
outstanding Option shall all be proportionately adjusted, as deemed appropriate
by the Board, the Committee or any Designated Officer if the Shares are split
up, converted, exchanged, reclassified or in any way substituted for. The
Board, the Committee or such Designated Officer shall provide for appropriate
adjustments of the numbers of shares purchasable under the Plan and of
outstanding Options in the event of stock dividends or distributions of assets
or securities of other companies owned by the Company to stockholders relating
to Common Stock for which the record date is prior to the date the Shares
purchased by exercise of an Option are issued or transferred, except that no
such adjustment shall be made for cumulative stock dividends of 10% or less (in
the aggregate) or cash dividends. Any such adjustment may include an adjustment
of the Option Price or the number of Shares for which an Option may be
exercised, or may provide for an escrow of assets or securities so distributed
to be available upon future exercise. In the event of a change in the Company's
presently authorized Common Stock which is limited to a change of all of its
presently authorized Shares of Common Stock with par value into the same number
of shares without par value, or any change of the then authorized Shares of
Common Stock with par value into the same number of shares of Common Stock with
a different par value, the shares resulting from any such change shall be deemed
to be Shares as defined in Section 1, and no change in the number of Shares
covered by each Option or in the Option Price shall take place.
<PAGE>

10. Indemnification; Reliance; Exculpation.
--------------------------------------

10.1 Indemnification. Each person who is or shall have been a
---------------
member of the Board or of the Committee and each Designated Officer shall be
indemnified and held harmless by the Company against and from any and all loss,
cost, liability, or expense that may be imposed upon or reasonably incurred by
such person in connection with or resulting from any claim, action, suit, or
proceeding to which such person may be a party or in which such person may be
involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by such person in settlement thereof
(with the Company's written approval) or paid by such person in satisfaction of
a judgment in any such action, suit, or proceeding to the fullest extent
permitted by the Delaware General Corporation Law, subject, however, to the
condition that upon the institution of any such claim, action, suit, or
proceeding, such person shall in writing give the Company an opportunity to
intervene at the Company's expense on his or her behalf. The foregoing right of
indemnification shall not be exclusive of any other right to which such person
may be entitled as a matter of law or otherwise, or any power that the Company
may have to indemnify such person or hold him or her harmless.

10.2 Reliance. Each member of the Board or of the Committee,
--------
each Designated Officer and each other officer and employee of the Company in
performing duties under the Plan shall be entitled to rely upon information and
reports furnished in connection with the administration of this Plan by any duly
authorized officer or agent of the Company.

10.3 Exculpation. No member of the Board or of the Committee
-----------
and no Designated Officer shall be liable for any action or determination made
in good faith with respect to the Plan or any Option granted under the Plan.

11. Income Tax Withholding. If the Company, any Subsidiary or any
----------------------
Affiliate shall be required to withhold any amounts by reason of any federal,
state or local tax rules or regulations in respect of the payment of cash or the
issuance of Shares pursuant to the exercise of an Option, the Company, such
Subsidiary or such Affiliate shall be entitled to deduct and withhold such
amounts from any cash payments to be made to the Optionee. In any event, the
Optionee shall either (i) make available to the Company , such Subsidiary or
such Affiliate, promptly upon request, sufficient funds or, if the Board, the
Committee or any Designated Officer so determines, Shares (valued at Fair Market
Value as of the date the withholding tax obligation arises (the "Tax Date")), to
--------
meet the requirements of such withholding, or (ii) to the extent permitted by
the Board, the Committee or any Designated Officer, irrevocably authorize the
Company to withhold from the Shares otherwise issuable to the Optionee as a
result of such exercise a number of Shares having a Fair Market Value as of the
Tax Date which alone, or when added to funds paid or Shares delivered to the
Company , such Subsidiary or such Affiliate by the Optionee, equal the amount of
the minimum withholding tax obligation (the "Withholding Election") and the
--------------------
Company, such Subsidiary or such Affiliate shall be entitled to take and
authorize such steps as it may deem advisable in order to have such funds or
Shares made
<PAGE>

available to the Company, such Subsidiary or such Affiliate out of any funds or
property due or to become due to the Optionee. An Optionee's Withholding
Election may only be made prior to the Tax Date and may be disapproved by the
Board, the Committee or any Designated Officer. The Board, the Committee or any
Designated Officer may establish such rules and procedures as he, she or it may
deem necessary or advisable in connection with the withholding of taxes relating
to the exercise of any Option.

12. Amendment or Termination of Plan. The Board or Committee may
--------------------------------
modify, amend or terminate the Plan in whole or in part at any time; provided,
however, that (i) no modification or amendment shall be effective without
stockholder approval if such approval is required by law or under the rules of
Nasdaq or of the stock exchange on which the Shares are listed and (ii) no such
termination, modification, or amendment of the Plan shall adversely alter or
affect the terms of any then outstanding Options previously granted hereunder
without the consent of the Optionee.

13. Set-Off. If at any time an Optionee is indebted to the Company,
-------
any Subsidiary or any Affiliate, the Company may in the discretion of the Board,
the Committee or any Designated Officer (a) withhold from the Optionee (i)
following the exercise by the Optionee of an Option, Shares issuable to the
Optionee having a Fair Market Value on the date of exercise up to the amount of
such indebtedness or (ii) following the sale by an Optionee of Shares received
pursuant to the exercise of an Option, amounts due to an Optionee in connection
with the sale of such Shares up to the amount of such indebtedness, or (b) take
any substantially similar action. The Board, the Committee or any Designated
Officer may establish such rules and procedures as he, she or it may deem
necessary or advisable in connection with the taking of any action contemplated
by this Section 13.

14. Headings. The section headings contained herein have no
--------
substantive meaning or content and are not part of this Plan.

15. Governing Law. The Plan shall be construed in accordance with
-------------
the laws of the State of Delaware without regard to any principles of conflicts
of law.

<PAGE>

EXHIBIT 10.18

THE 1999 CAREINSITE, INC.
OFFICER STOCK OPTION PLAN

1. Definitions. The terms below shall be defined as indicated.
-----------

1.2 Board means the Board of Directors of the Company, as
-----
constituted from time to time.

1.3 Code means the Internal Revenue Code of 1986, as amended
----
from time to time, or any successor statute thereto.

1.4 Committee means the Committee of the Board described in
---------
Section 3.

1.5 Common Stock means the Company's common stock, par value
------------
$.01 per share.

1.6 Company means CareInsite, Inc., a Delaware corporation, and
-------
any successor corporation which adopts the Plan.

1.7 Employee means a person who is employed on a full or part
--------
time basis by the Company, a Subsidiary or an Affiliate.

1.8 Exchange Act means the Securities Exchange Act of 1934, as
------------
amended from time to time, or any successor statute thereto.

1.9 Fair Market Value means, on a specified date, the last sales
-----------------
price of a Share traded on the over-the-counter market, as reported on the
National Association of Securities Dealers Automated Quotation System
("Nasdaq"), or the last closing price for a Share on the stock exchange, if any,
------
on which Shares are primarily traded (or if no Shares were traded on such date,
then on the last previous date on which any Shares were so traded), or if none
of the above is applicable, the value of a Share for such date as established by
the Committee, using any reasonable method of valuation; provided however, that,
with respect to Options granted as of the date of the initial public offering of
the Company, the Fair Market Value as of such date shall be the initial public
offering price per Share.
<PAGE>

1.10 Incentive Stock Option means an Option which is intended to
----------------------
qualify as an "incentive stock option" within the meaning of Section 422 of the
Code and is designated as such in the applicable Option Agreement.

1.11 Non-qualified Stock Option means any Option which is not an
--------------------------
Incentive Stock Option.

1.12 Officer means any Employee who is an officer of the Company,
-------
any Subsidiary or any Affiliate.

1.13 Option means an option to purchase Shares granted by the
------
Company pursuant to the Plan.

1.14 Option Agreement means a written agreement as described in
----------------
Section 7 between the Company and the Optionee evidencing an Option.

1.15 Option Period means the period from the date of the granting
-------------
of an Option to the date on which that Option can no longer be exercised.

1.16 Option Price means the price to be paid for the Shares
------------
purchased pursuant to an Option.

1.17 Optionee means any person who is granted an Option under the
--------
Plan.

1.18 Parent means a parent of the Company as defined under
------
Section 424(e) of the Code.

1.19 Plan means the 1999 CareInsite, Inc. Officer Stock Option
----
Plan, as adopted by the Board in substantially the form set forth herein and as
the same may be amended or otherwise modified from time to time.

1.20 Section 162(m) Optionee means, for a given fiscal year of
-----------------------
the Company, any Optionee designated by the Committee by not later than 90 days
following the start of such year as an Optionee (or such other time as may be
required or permitted by Section 162(m) of the Code) whose compensation for such
fiscal year may be subject to the limit on deductible compensation imposed by
Section 162(m) of the Code.

1.21 Securities Act means the Securities Act of 1933, as amended
--------------
from time to time, or any successor statute thereto.
<PAGE>

1.22 Shares means shares of Common Stock.
------

1.23 Subsidiary means a subsidiary of the Company as defined
----------
under Section 424(f) of the Code.

1.24 Synetic means Synetic, Inc., a Delaware corporation, and any
-------
successor corporation.

2. Purpose. The Plan is intended to encourage ownership of Common
-------
Stock by Officers, upon whose judgment and interest the Company is dependent for
its successful operation and growth, in order to increase their proprietary
interest in the Company's success and to encourage them to remain in the employ
of the Company, its Subsidiary or its Affiliate, as applicable.

3. Administration.
--------------

3.1 Board and Committee. The Plan shall be administered by
-------------------
the Board or, if the Board so determines, by a Committee appointed by the Board
from among its members (the "Committee"). Any provision of the Plan to the
---------
contrary notwithstanding, in the event of any inconsistency between any action
taken by the Committee and any action taken by the Board concerning the Plan or
any Options hereunder, the action taken by the Board shall govern. Until such
time as the Committee is appointed, the Stock Option Committee of Synetic may
grant options under the Plan, provided that the Board has separately approved
such action in the manner required by Rule 16b-3 under the Exchange Act.

3.2 Determination of Option Terms. Subject to the provisions
-----------------------------
of Sections 8 and 12, the Board or the Committee, as applicable, shall have
authority to determine the vesting and exercise schedule with respect to
Options, the persons to whom Options shall be granted, the number of Shares to
be covered by each Option, the time or times at which Options shall be granted
and the terms and provisions of the Options, and to make all other
determinations necessary or advisable for the administration of the Plan.
Options shall become exercisable as specified in the applicable Option
Agreement.

3.3 Interpretation and Construction. The Board or the
-------------------------------
Committee, as applicable, shall have the authority to interpret and construe the
provisions of the Plan or of any Option Agreement and, subject to Section 3.1,
such interpretation and construction by the Board or the Committee shall be
final and conclusive.

4. Eligible Persons. The Board or the Committee, as the case may
----------------
be, may grant Options only to Officers; provided, however, that no Incentive
Stock Option shall be granted to any individual who, at the time such Option is
granted, owns (within the meaning of
<PAGE>

Section 422 of the Code) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any Parent or Subsidiary,
unless, at the time the Incentive Stock Option is granted, the Option Price is
at least 110% of the Fair Market Value of a Share and the Incentive Stock
Option, by its terms, is not exercisable after the expiration of five years from
the date such Option is granted; provided further, however, that Incentive Stock
Options shall only be granted to Officers who are Employees of the Company or a
Parent or a Subsidiary.

5. Grant of Options.
----------------

5.1 Procedure. Subject to the provisions of Sections 8.1 and
---------
8.2, the Board or the Committee, as applicable, may (but shall not be required
to) grant Options, provided that the person to whom the Option is to be granted
subsequently becomes a party to an Option Agreement. An Option granted pursuant
to the Plan shall be presumed to be a Non-qualified Stock Option, unless the
Board or the Committee determines otherwise and so specifies in the applicable
Option Agreement.

7. Option Agreements. Option Agreements shall be in such form as
-----------------
the Board or the Committee, as applicable, shall approve or determine; provided,
however, that all Option Agreements shall comply with and be subject to the
following terms and conditions:

7.1 Manner, Time, and Medium of Payment. An Option shall be
-----------------------------------
exercised in the manner set forth in the Option Agreement relating thereto and
payment in full of the Option Price for all Shares shall be made at the time of
exercise. Payment shall be in United States dollars in the form of cash,
certified check or bank draft, or if the Board or the Committee so determines,
by delivery of fully paid Shares, or by withholding Shares with respect to which
the Optionee has exercised such Option, having a Fair Market Value on the date
of exercise equal to the sum of the Option Price for the withheld Shares and the
remaining Shares with respect to which the Optionee has exercised such Option,
or any combination of such methods of payment.
<PAGE>

7.2 Number of Shares. Subject to Section 9, the Option
----------------
Agreement shall state the number of Shares to which it pertains.

7.3 Option Price. The Option Price shall be determined by the
------------
Board or the Committee, as applicable; provided, however, that in the case of
a Non-qualified Stock Option, the Option Price shall not be less than 85% of the
Fair Market Value of a Share as of the date the Option is granted, and, in the
case of an Incentive Stock Option or a Non-qualified Stock Option granted to a
Section 162(m) Optionee, shall not be less than 100% of the Fair Market Value of
a Share as of the date the Option is granted.

7.4 Option Period. Each Option granted under the Plan shall
-------------
expire no later than ten years (or five years in the case of certain Incentive
Stock Options, as provided in Section 4 hereof) from the date the Option is
granted. Any Option Agreement may contain provisions for the earlier expiration
of the Option in the event of the Optionee's termination of service as an
Employee, retirement or death or in the event of a violation by an Optionee of
any of such Optionee's duties to the Company, any Subsidiary or any Affiliate.

7.5 Date of Exercise. An Option shall be exercisable at the
----------------
times specified by the Board or the Committee, as applicable, at the time the
Option is granted; notwithstanding the foregoing, in the event of a "Change in
Control", the Board may in its sole discretion determine that any Option granted
under the Plan shall become exercisable in full or in part, whether or not it is
then exercisable, except in the case of any Option granted to any Employees who
are also members of the Board or the Board of Directors of Synetic, in which
case such Option shall become automatically exercisable in the event of a
"Change in Control", unless otherwise provided in such Employee's employment
agreement or Option Agreement. For purposes of the Plan, a "Change in Control"
-----------------
shall be deemed to have occurred:

(iv) when the stockholders of the Company approve a merger or
consolidation of the Company without the consent or approval of a majority
of the Company Incumbent Directors;

(vi) when the stockholders of the Company approve a sale or
disposition of all or substantially all of the Company's assets;
<PAGE>

(viii) when the Company adopts a plan of liquidation; or

(ix) when Synetic adopts a plan of liquidation, so long as
Synetic is the beneficial owner of 50 percent or more of the combined
voting power of the Company's then outstanding securities.

7.8 Continuation with the Company. No Option shall be
-----------------------------
exercisable by an Optionee after the earlier of: (i) the expiration of the
Option Period, or (ii) 30 days after termination of such Optionee's service as
an Employee or such longer period as may be determined by the Board or the
Committee, as applicable (after considering the provisions of Section 422 of the
Code, if applicable) unless such termination of service occurs by reason of the
Optionee's retirement with the consent of the Company, a Subsidiary or an
Affiliate, as the case may be, or his death. The Board or the Committee may
provide in an Option Agreement that employment with a Subsidiary or an Affiliate
shall not constitute employment with the Company for purposes of such Option
Agreement. If the Optionee's services are terminated because of his retirement
with such consent or death (or if the Optionee dies within 90 days of such
retirement or 30 days of other termination of service) the Optionee (or the
representative of the estate or the heirs or legatees of a deceased Optionee)
shall have the right to exercise the unexercised portion of the Option which the
Optionee could have exercised as of the date of his retirement or death,
provided that notice of such exercise is given to the Company in writing before
the earlier of: (i) the expiration of the Option Period, and (ii) within 90 days
of the Optionee's retirement or one year of the Optionee's death, as the case
may be, or such longer period as may be determined by the Board or the Committee
(after considering the provisions of Section 422 of the Code, if applicable).
Unless otherwise provided in such Optionee's Option Agreement, if the Optionee's
service as an Employee is terminated because of the Optionee's violation of his
duties to the Company, a Subsidiary or an Affiliate as he may from time to time
have, the existence of which violation shall be determined by the Board or the
Committee, as applicable, in its sole discretion (which determination shall be
conclusive), all of the Optionee's Options shall terminate immediately and the
Optionee shall have no right after such termination to exercise any Option he
might have been able to exercise prior to his termination of service.

7.9 No Right to Continue Status. Nothing in the Plan or in any
---------------------------
Option granted under the Plan shall confer (or be deemed to confer) any right on
any Optionee to continue as an employee of the Company, any Subsidiary or any
Affiliate or shall interfere in any way with the right of the Company, any
Subsidiary or any Affiliate to terminate such status at any time, with or
without cause and with or without notice.

7.11 Other Provisions. Option Agreements shall contain such
----------------
other terms and conditions not inconsistent with the Plan as the Board or the
Committee, as applicable, shall deem advisable or as shall be required by
Section 162(m) or 422 of the Code.

7.12 Compliance with Law. Notwithstanding any provision of the
-------------------
Plan or any Option Agreement to the contrary, no Option may be granted or
exercised at any time when
<PAGE>

such Option or the granting or exercise thereof or payment therefor may result
in the violation of any law or governmental order or regulation.

8. Shares Available for Option.
---------------------------

8.1 Maximum. Subject to Sections 7.6 and 9, no more than
-------
3,500,000 Shares shall be subject to purchase pursuant to Options granted under
the Plan. At all times during the term of the Plan, the Company shall have
reserved that number of Shares less an amount equal to the number of Shares
which have been issued pursuant to the exercise of Options. At all times after
termination of the Plan, the Company shall have reserved for issuance a number
of Shares equal to the aggregate number of Shares subject to outstanding
Options.

8.2 Officer Maximum. Subject to Sections 7.6 and 9 hereof, no
---------------
Optionee shall receive Options under this Plan with respect to an aggregate of
more than 450,000 Shares in any Plan year.

incentive stock options (within the meaning of Section 422 of the Code), which
are exercisable for the first time by such Optionee during any calendar year
shall exceed $100,000, such Incentive Stock Options shall be treated, to the
extent of such excess, as Non-qualified Options.

9. Recapitalization or Change in Par Value of Common Stock. The
-------------------------------------------------------
aggregate number of Shares purchasable under Options granted and which may be
granted pursuant to the Plan and the Option Price for Shares covered by each
outstanding Option shall all be proportionately adjusted, as deemed appropriate
by the Board or the Committee if the Shares are split up, converted, exchanged,
reclassified or in any way substituted for. The Board or the Committee shall
provide for appropriate adjustments of the numbers of shares purchasable under
the Plan and of outstanding Options in the event of stock dividends or
distributions of assets or securities of other companies owned by the Company to
stockholders relating to Common Stock for which the record date is prior to the
date the Shares purchased by exercise of an Option are issued or transferred,
except that no such adjustment shall be made for cumulative stock dividends of
10% or less (in the aggregate) or cash dividends. Any such adjustment may
include an adjustment of the Option Price or the number of Shares for which an
Option may be exercised, or may provide for an escrow of assets or securities so
distributed to be available upon future exercise. In the event of a change in
the Company's presently authorized Common Stock which is limited to a change of
all of its presently authorized Shares of Common Stock with par value into the
same number of shares without par value, or any change of the then authorized
Shares of Common Stock with par value into the same number of shares of Common
Stock with a different par value, the shares resulting from any such change
shall be deemed to be Shares as defined in Section 1, and no change in the
number of Shares covered by each Option or in the Option Price shall take place.

10. Indemnification; Reliance; Exculpation.
--------------------------------------

10.1 Indemnification. Each person who is or shall have been a
---------------
member of the Board or of the Committee shall be indemnified and held harmless
by the Company against and from any and all loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by such person in connection
with or resulting from any claim, action, suit, or proceeding to which such
person may be a party or in which such person may be involved by reason of any
action taken or failure to act under the Plan and against and from any and all
amounts paid by such person in settlement thereof (with the Company's written
approval) or paid by such person in satisfaction of a judgment in any such
action, suit, or proceeding to the fullest extent permitted by the Delaware
General Corporation Law, subject, however, to the condition that upon the
institution of any such claim, action, suit, or proceeding, such person shall in
writing give the Company an opportunity to intervene at the Company's expense on
his or her behalf. The foregoing right of indemnification shall not be
exclusive of any other right to which such person may be entitled as a matter of
law or otherwise, or any power that the Company may have to indemnify such
person or hold him or her harmless.
<PAGE>

10.2 Reliance. Each member of the Board or of the Committee and
--------
each other officer and employee of the Company in performing duties under the
Plan shall be entitled to rely upon information and reports furnished in
connection with the administration of this Plan by any duly authorized officer
or agent of the Company.

10.3 Exculpation. No member of the Board or of the Committee
-----------
shall be liable for any action or determination made in good faith with respect
to the Plan or any Option granted under the Plan.

11. Income Tax Withholding. If the Company, any Subsidiary or any
----------------------
Affiliate shall be required to withhold any amounts by reason of any federal,
state or local tax rules or regulations in respect of the payment of cash or the
issuance of Shares pursuant to the exercise of an Option, the Company, such
Subsidiary or such Affiliate shall be entitled to deduct and withhold such
amounts from any cash payments to be made to the Optionee. In any event, the
Optionee shall either (i) make available to the Company, such Subsidiary or such
Affiliate, promptly upon request, sufficient funds or, if the Board or the
Committee so determines, Shares (valued at Fair Market Value as of the date the
withholding tax obligation arises (the "Tax Date")), to meet the requirements of
--------
such withholding, or (ii) to the extent permitted by the Board or the Committee,
irrevocably authorize the Company to withhold from the Shares otherwise issuable
to the Optionee as a result of such exercise a number of Shares having a Fair
Market Value as of the Tax Date which alone, or when added to funds paid or
Shares delivered to the Company, such Subsidiary or such Affiliate by the
Optionee, equal the amount of the minimum withholding tax obligation (the
"Withholding Election") and the Company, such Subsidiary or such Affiliate shall
--------------------
be entitled to take and authorize such steps as it may deem advisable in order
to have such funds or Shares made available to the Company, such Subsidiary or
such Affiliate out of any funds or property due or to become due to the
Optionee. An Optionee's Withholding Election may only be made prior to the Tax
Date and may be disapproved by the Board or the Committee. The Board or the
Committee may establish such rules and procedures as it may deem necessary or
advisable in connection with the withholding of taxes relating to the exercise
of any Option.

13. Set-Off. If at any time an Optionee is indebted to the Company,
-------
any Subsidiary or any Affiliate, the Company may in the discretion of the Board
or the Committee (a) withhold from the Optionee (i) following the exercise by
the Optionee of an Option, Shares issuable to the Optionee having a Fair Market
Value on the date of exercise up to the amount of such indebtedness or (ii)
following the sale by an Optionee of Shares received pursuant to the exercise of
an Option, amounts due to an Optionee in connection with the sale of such Shares
up to the amount of such indebtedness, or (b) take any substantially similar
action. The Board or the Committee may establish such rules and procedures as it
may deem necessary or advisable in connection with the taking of any action
contemplated by this Section 13.

14. Headings. The section headings contained herein have no
--------
substantive meaning or content and are not part of this Plan.

15. Governing Law. The Plan shall be construed in accordance with
-------------
the laws of the State of Delaware without regard to any principles of conflicts
of law.

<PAGE>

EXHIBIT 10.27

[FORM OF]
INDEMNIFICATION AGREEMENT

INDEMNIFICATION AGREEMENT, dated as of ___________________, 1999, by
and between CareInsite, Inc., a Delaware corporation (the "Company"), and the
director and/or officer of the Company whose name appears on the signature page
of this Agreement (the "Indemnitee"):

WHEREAS, highly competent persons are becoming more reluctant to serve
publicly held corporation as directors, officers, or in other capacities unless
they are provided with reasonable protection through insurance or
indemnification against risks of claims and actions against them arising out of
their service to and activities on behalf of the corporations;

WHEREAS, the Board of Directors of the Company (the "Board") has
determined that the Company should act to assure such persons that there will be
increased certainty of such protection in the future;

WHEREAS, it is reasonable, prudent and necessary for the Company
contractually to oblige itself to indemnify such persons to the fullest extent
permitted by applicable law so that they will serve or continue to serve the
Company free from undue concern that they will not be so indemnified; and

WHEREAS, Indemnitee in willing to serve, continue to serve, and to
take on additional service for or on behalf of the Company on the condition that
Indemnitee be so indemnified;

NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:
<PAGE>

Section 1. Service by Indemnitee. Indemnitee agrees to begin or
---------------------
continue to serve the Company or other corporation, partnership, joint venture,
employee benefit plan, trust or other enterprise affiliated with the Company
(all of which are collectively referred to as an "Affiliate") as a director or
officer. Notwithstanding anything contained herein, this Agreement shall not
create a contract of employment between the Company and the Indemnitee and the
termination of Indemnitee's relationship with the Company or an Affiliate by
either party hereto shall not be restricted by this Agreement.

Section 2. Indemnification. The Company shall indemnify Indemnitee
---------------
for, and hold Indemnitee harmless from and against, any losses, liabilities,
claims, judgments, fines or Expenses (as hereinafter defined) at any time
incurred by or assessed against Indemnitee arising out of or in connection with
the service of Indemnitee as an officer, director, advisory director, Board
Committee Member, or officer of the Company or of an Affiliate (collectively
referred to as an "Officer or Director of the Company") to the fullest extent
permitted by the laws of the State of Delaware in effect on the date hereof or
as such laws may from time to time hereafter be amended to increase the scope of
such permitted indemnification; provided, however, the Company shall indemnify
-------- -------
an Indemnitee in connection with a proceeding instituted by an Indemnitee (other
than an action to enforce indemnification rights under this agreement), only if
such Proceeding (as hereinafter defined) is authorized by the Board. Without
diminishing the scope of the indemnification provided by this Section 2, the
rights of indemnification of Indemnitee provided hereunder shall include, but
shall not be limited to, those rights set forth hereinafter.

Section 3. Action or Proceeding Other Than an Action by or in the
------------------------------------------------------
Right of the Company. Indemnitee shall be entitled to the indemnification
- --------------------
rights provided herein if Indemnitee

2
<PAGE>

is a person who was or is made a party or is threatened to be made a party to
any pending, completed or threatened Proceeding other than an action by or in
the right of the Company, by reason of (a) the fact that Indemnitee is or was an
Officer or Director of the Company or any other entity which Indemnitee is or
was serving at the request of the Company, or (b) anything done or not done by
Indemnitee in any such capacity. Pursuant to this Section, Indemnitee shall be
indemnified against Expenses, losses, claims, liabilities, judgments, fines and
amounts paid in settlement incurred by Indemnitee or on Indemnitee's behalf in
connection with any Proceeding, if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company, and, with respect to any criminal Proceeding, had no
reasonable cause to believe his conduct was unlawful.

Section 4. Actions by or in the Right of the Company. Indemnitee
-----------------------------------------
shall be entitled to the indemnification rights provided herein if Indemnitee is
a person who was or is made a party or is threatened to be made a party to any
pending, completed or threatened Proceeding brought by or in the right of the
Company to procure a judgment in its favor by reason of (a) the fact that
Indemnitee is or was an Officer or Director or any other entity which Indemnitee
is or was serving at this request of the Company, or (b) anything done or not
done by Indemnitee in any such capacity. Pursuant to this section Indemnitee
shall be indemnified against Expenses, losses, claims, liabilities, judgments,
fines and amounts paid in settlement incurred by Indemnitee or on Indemnitee's
behalf in connection with any Proceeding if Indemnitee acted in good faith and
in a manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company. Notwithstanding the foregoing provisions of this
section, no such indemnification shall be made in respect of any claim, issue or
matter as to which Delaware law expressly prohibits such

3
<PAGE>

indemnification by reason of an adjudication of liability of Indemnitee to the
Company; provided, however, that in such event such indemnification shall
-------- -------
nevertheless be made by the Company to the extent that the Court of Chancery of
the State of Delaware or the court in which such action or suit was brought
shall determine equitable under the circumstances.

Section 5. Indemnification for Costs, Charges and Expenses of Party
--------------------------------------------------------
Who is Wholly or Partly Successful. Notwithstanding any provision of this
- ----------------------------------
Agreement, to the extent that Indemnitee has been wholly successful on the
merits or otherwise involved in any Proceeding on any claim, issue or matter,
Indemnitee shall be indemnified against all Expenses incurred by Indemnitee or
on Indemnitee's behalf in connection therewith. If Indemnitee is not wholly
successful in such Proceeding but is successful, on the merits or otherwise, as
to one or more but less than all claims, issues or matters in such Proceeding,
the Company shall indemnify Indemnitee to the maximum extent permitted by law,
against all Expenses, judgments, penalties, fines and amounts paid in
settlement, incurred by Indemnitee with each successfully resolved claim, issue
or matter. For purposes of this Section and without limitation, the termination
of any such claim, issue or matter by dismissal with or without prejudice shall
be deemed to be a successful result as to such claim, issue or matter.

Section 6. Indemnification for Expenses of a Witness.
-----------------------------------------
Notwithstanding any other provision of this Agreement, to the extent that the
Indemnitee is, by reason of the fact, or was an Officer or Director of the
Company or any other entity which Indemnitee is or was serving at the request of
the Company, a witness in any Proceeding, Indemnitee shall be indemnified by the
Company against all Expenses actually and reasonably incurred by Indemnitee or
on Indemnitee's behalf in connection therewith.

4
<PAGE>

Section 7. Advancement of Expenses and Costs. All Expenses incurred
---------------------------------
by or on behalf of Indemnitee (or reasonably expected by the Indemnitee to be
incurred by the Indemnitee within three months) shall be paid by the Company in
advance of the final disposition of such Proceeding within twenty days after the
receipt by the Company of a statement or statements from Indemnitee requesting
from time to time such advance or advances. Indemnitee's entitlement to such
advancement of Expenses shall include those incurred in connection with any
proceeding by Indemnitee seeking an adjudication or award in arbitration
pursuant to this Agreement. Such statement or statements shall reasonably
evidence such expenses incurred (or reasonably expected to be incurred) by
Indemnitee in connection therewith and shall include or be accompanied by a
written undertaking by or on behalf of Indemnitee to repay such amount if it
shall ultimately be determined that Indemnitee is not entitled to be indemnified
therefor pursuant to the terms of this Agreement.

Section 8. Procedure for Determination of Entitlement to
---------------------------------------------
Indemnification. (a) When seeking indemnification under this Agreement,
- ---------------
Indemnitee shall submit a written request for indemnification to the Company.
Such request shall include documentation or information which is reasonably
necessary for the Company to make a determination of Indemnitee's entitlement to
indemnification hereunder and which is reasonably available to Indemnitee.
Determination of Indemnitee's entitlement to indemnification shall be made not
later than 30 days after receipt by the Company of the Indemnitee's written
request for indemnification. The Secretary of the Company shall, promptly upon
receipt of Indemnitee's request for indemnification, advise the Board that
Indemnitee has made such request for indemnification.

5
<PAGE>

(b) The entitlement of the Indemnitee to indemnification under this
Agreement shall be determined in the specific case by the Board of a majority
vote of a quorum consisting of Disinterested Directors (as hereinafter defined).
If such a quorum is not obtainable or if the Board by the majority vote of
Disinterested Directors so directs, the determination shall be made by
Independent Counsel (as hereinafter defined).

(c) In the event the determination of entitlement is to be made by
Independent Counsel, such Independent Counsel shall be selected by the Board and
approved by Indemnitee. Upon failure of the Board to so select such Independent
Counsel or upon failure of Indemnitee to so approve, such Independent Counsel
shall be selected by the Chancellor of the State of Delaware or such other
person as the Chancellor shall designate to make such selection.

(d) If the Board or Independent Counsel shall have determined that
Indemnitee is not entitled to indemnification to the full extent of Indemnitee's
request, Indemnitee shall have the right to seek entitlement to indemnification
in accordance with the procedures set forth in Section 10 hereof.

Section 9. Effect of Certain Procedures. (a) If the person or
----------------------------
persons empowered to make a determination with respect to entitlement to
indemnification shall have failed to make the requested indemnification within
30 days after receipt by the Company of such request, the requisite
determination of entitlement to indemnification shall be deemed to have been
made and Indemnitee shall be absolutely entitled to such indemnification, absent
(i) misrepresentation by Indemnitee of a material fact in the request for
indemnification or (ii) a final judicial determination that all or any part of
such indemnification is expressly prohibited by law. The termination of any
Proceeding by judgment, order, settlement or conviction, or upon a plea of nolo
----
contendere or its
- ----------

6
<PAGE>

equivalent, shall not, of itself, adversely affect the rights of Indemnitee to
indemnification hereunder except as may be specifically provided herein, or
create a presumption that Indemnitee did not act in good faith and in a manner
which Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company or create a presumption that (with respect to any
criminal action or proceeding) Indemnitee had reasonable cause to believe that
Indemnitee's conduct was unlawful.

(b) For purposes of any determination of good faith hereunder,
Indemnitee shall be deemed to have acted in good faith if Indemnitee's action is
based on the records or books of account of the Company or an Affiliate,
including financial statements, or on information supplied to Indemnitee by the
officers of the Company or an Affiliate in the course of their duties, or on the
advice of legal counsel for the Company or an Affiliate or on information or
records given or reports made to the Company or an Affiliate by an independent
certified public accountant or by an appraiser or other expert selected with
reasonable care by the Company or an Affiliate. The provisions of this Section
9(b) shall not be deemed to be exclusive or to limit in any way the other
circumstances in which the Indemnitee may be deemed to have met the applicable
standard of conduct set forth in this Agreement.

(c) The knowledge and/or actions, or failure to act, of any director,
officer, agent or employee of the Company or an Affiliate shall not be imputed
to Indemnitee for purposes of determining the right to indemnification under
this Agreement.

Section 10. Remedies in Cases of Determination not to Indemnify or to
---------------------------------------------------------
Advance Expenses. (a) In the event that (i) a determination is made that
- ----------------
Indemnitee is not entitled to indemnification hereunder, (ii) advances are not
made pursuant to Section 7 or (iii) payment has

7
<PAGE>

not been timely made following a determination of entitlement to indemnification
pursuant to Sections 8 and 9, Indemnitee shall be entitled to seek a final
adjudication in an appropriate court of the State of Delaware or any other court
of competent jurisdiction of Indemnitee's entitlement to such indemnification in
advance. Alternatively, Indemnitee at Indemnitee's option may seek an award in
arbitration to be conducted by a panel of three arbitrators in Wilmington,
Delaware, or in Bergen County, New Jersey, pursuant to the rules of the American
Arbitration Association then prevailing, such award to be made within sixty days
following the filing of the demand for arbitration. The Company shall not oppose
Indemnitee's right to seek arbitration of any such claim.

(b) In the event a determination has been made, in whole or in part,
that Indemnitee is not entitled to indemnification, any such judicial proceeding
or arbitration shall be made de novo and Indemnitee shall not be prejudiced by
-- ----
reason of any determination that Indemnitee is not entitled to indemnification.

(c) If a determination is made or deemed to have been made pursuant to
the terms of Section 9 or Section 10 hereof that Indemnitee is entitled to
indemnification, the Company shall be bound by such determination in any
judicial proceeding or arbitration in the absence of (i) a misrepresentation of
a material fact by Indemnitee or (ii) a final judicial determination that all or
any part of such indemnification is expressly prohibited by law.

(d) The Company and Indemnitee agree that they shall be precluded from
asserting that the procedures and presumptions of this Agreement are not valid,
binding and enforceable. The Company and Indemnitee further agree to stipulate
in any such court or before

8
<PAGE>

any such arbitrators that the Company and Indemnitee are bound by all the
provisions of this Agreement and are precluded from making any assertion to the
contrary.

(e) To the extent deemed appropriate by the arbitrators or the court,
interest shall be paid by the Company to Indemnitee at a reasonable interest
rate, for amounts which the Company indemnifies the Indemnitee.

Section 11. Expenses Incurred by Indemnitee to Enforce this
-----------------------------------------------
Agreement. Reasonable expenses incurred by Indemnitee in connection with the
- ---------
preparation and submission of Indemnitee's request for indemnification hereunder
shall be borne by the Company. In the event that Indemnitee is a party to or
intervenes in any proceeding in which the validity or enforceability of this
Agreement is at issue or seeks an adjudication or award in arbitration to
enforce Indemnitee's rights under, or to recover damages for breach of, this
Agreement, Indemnitee, if Indemnitee prevails in whole in such action, shall be
entitled to recover from the Company and shall be indemnified by the Company
against, any Expenses incurred by Indemnitee. If it is determined that
Indemnitee is entitled to indemnification of part (but not all) of the
indemnification so requested, Expenses incurred in seeking enforcement of such
partial indemnification shall be reasonably prorated among such claims, issues
or matters.

Section 12. Non-exclusivity. The rights of indemnification and to
---------------
receive advances as provided by this Agreement shall not be deemed exclusive of
any other rights to which Indemnitee may at any time be entitled under
applicable law, certificate of incorporation, the By-Laws, any agreement, a vote
of stockholders or a resolution of directors, or otherwise. No amendment,
alteration, rescission or replacement of this Agreement or any provision hereof
shall be effective as to Indemnitee with respect to any action taken or omitted
by such Indemnitee in

9
<PAGE>

Indemnitee's position with the Company or an Affiliate or any other entity which
Indemnitee is or was serving at the request of the Company prior to such
amendment, alteration, rescission or replacement.

Section 13. Duration of Agreement. This Agreement shall apply to any
---------------------
claim asserted and any Expenses incurred in connection with any claim asserted
on or after the effective date of this Agreement and shall continue until and
terminate upon the later of: (a) 10 years after Indemnitee has ceased to occupy
any of the positions or have any of the relationships described in Section 2, 3
or 4 of this Agreement; or (b) the final termination of all pending or
threatened Proceedings of the kind described herein with respect to Indemnitee.
This Agreement shall be binding upon the Company and its successors and assigns
and shall inure to the benefit of Indemnitee and Indemnitee's spouse, assigns,
heirs, devisees, executors, administrators or other legal representatives.

Section 14. Severability. If any provision or provisions of this
------------
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including, without limitation, all portions of any
Sections of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that are not themselves invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby; and (b) to
the fullest extent possible, the provisions of this Agreement (including,
without limitation, all portions of any Section of this Agreement containing any
such provision held to be invalid, illegal or unenforceable, that are not
themselves invalid, illegal or unenforceable) shall be construed so as to give
effect to the intent manifested by the provision held invalid, illegal or
unenforceable.

10
<PAGE>

Section 15. Identical Counterparts. This Agreement may be executed
----------------------
in one or more counterparts, each of which shall for all purposes be deemed to
be an original but all of which together shall constitute one and the same
Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of this
Agreement.

Section 16. Headings. The headings of the Sections of this Agreement
--------
are inserted for convenience only and shall not be deemed to constitute part of
this Agreement or to affect the construction thereof.

Section 17. Definitions. For purposes of this Agreement:
-----------

(a) "Disinterested Director" shall mean a director of the Company who
is not or was not a party to the Proceeding in respect of which
indemnification is being sought by Indemnitee.

(b) "Expenses" shall include all reasonable attorneys' fees and costs,
retainers, court costs, transcripts, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or expenses
customarily incurred in connection with asserting or defending claims.

(c) "Independent Counsel" shall mean a law firm or lawyer that neither
is presently nor in the past five years has been retained to represent:
(i) the Company or Indemnitee in any matter material to either such party,
or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term
"Independent Counsel" shall not include any firm or person who, under

11
<PAGE>

the applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee's right to indemnification
under this Agreement. All fees and expenses of the Independent Counsel
incurred in connection with acting pursuant to this Agreement shall be
borne by the Company.

(d) "Proceeding" includes any action, suit, arbitration, alternate
dispute resolution mechanism, investigation, administrative hearing or any
other proceeding, whether civil, criminal, administrative or investigative,
provided, however, that the term "Proceeding" shall include any action
-------- -------
instituted by an Indemnitee (other than an action to enforce
indemnification rights under this Agreement) only if such action is
authorized by the Board.

Section 18. Modification and Waiver. No supplement, modification or
-----------------------
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto; provided, however, that any such mutually agreed upon
-------- -------
supplement, amendment or modification shall not require stockholder approval if
such modification, amendment or supplement is made to conform to any amendment
or revision of Delaware General Corporation Law which expands the Indemnitee's
right to indemnification thereunder or is otherwise beneficial to Indemnitee or,
in the sole judgment of the Board, does not materially and adversely affect the
rights and protection of the Company or unless otherwise required by Delaware
General Corporation Law.

Section 19. No Duplicative Payment. The Company shall not be liable
----------------------
under this Agreement to make any payment of amounts otherwise indemnifiable
hereunder if and to the

12
<PAGE>

extent that Indemnitee has otherwise actually received such payment under any
insurance policy, contract, agreement or otherwise.

Section 20. Notices. All notices, requests, demands and other
-------
communications hereunder shall be in writing and shall be deemed to have been
duly given if (a) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed, or (b) mailed by
certified or registered mail, with postage prepaid on the third business day
after the date on which it is so mailed:

(i) If to Indemnitee, to the address appearing on the signature page
hereof.

(ii) If to the Company to:

CareInsite, Inc.
669 River Drive
River Drive Center II
Elmwood Park, NJ 07407;
Attention: General Counsel

or such other address as may have been furnished to Indemnitee by the Company or
to the Company by Indemnitee, as the case may be.

Section 11. Governing Law. The parties agree that this Agreement
-------------
shall be governed by, and construed and enforced in accordance with, the laws of
the State of Delaware.

13
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of this ___ day of ___, 1999.

CAREINSITE, INC.

By
-----------------------------------
Authorized Officer

INDEMNITEE

-------------------------------------
Signature

-------------------------------------
Print Name

-------------------------------------
Address

-------------------------------------
City and State

<PAGE>

EXHIBIT 10.35
STOCK OPTION AGREEMENT

STOCK OPTION AGREEMENT (this "Agreement") made as of March 15, 1999,
---------
between SYNETIC, INC., a Delaware corporation (the "Company"), and JAMES LOVE
-------
("Optionee").
- ----------

RECITAL
-------

The Company desires to provide Optionee with an opportunity to acquire
shares of Common Stock (as defined below) of the Company. As a result, the
Company has elected to issue to Optionee an option to acquire 275,000 shares of
its Common Stock and intends that such option comply with the requirements of
Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
--------
Act").
- ---

AGREEMENTS
----------

In consideration of the Recital (which is incorporated by reference)
and the mutual covenants of this Agreement, the Company and Optionee agree as
follows:

1. Confirmation of Grant of Option. Pursuant to a determination by
-------------------------------
the Stock Option Committee of the Board of Directors of the Company (the
"Board"), effective as of March 15, 1999 (the "Date of Grant"), the Company
----- -------------
hereby confirms that Optionee has been granted, subject to the terms of this
Agreement, the right (the "Option") to purchase 275,000 shares of Common Stock
------
of the Company ("Common Stock"). All of the shares hereunder are hereinafter
------------
referred to as "Shares". Said number of Shares subject to the Option may be
------
adjusted as provided in Section 9.

As used herein, "Committee" shall mean the Stock Option Committee of
---------
the Board (and any successor committee appointed by the Board).

2. Exercisability of Option.
-------------------------------------------------

2.1. Subject to the terms and conditions of this Agreement (including
Section 2.3), the Option shall become exercisable:

2.1.1. with respect to 20% of the Shares, on and after March 15, 2000
(the "First Vesting Date");

2.1.2. with respect to an additional 20% of the Shares, on and after
the first anniversary of the First Vesting Date;

2.1.3. with respect to an additional 20% of the Shares, on and after
the second anniversary of the First Vesting Date;
<PAGE>

2.1.4. with respect to an additional 20% of the Shares, on and
after the third anniversary of the First Vesting Date; and

2.1.5. with respect to the remainder of the Shares, on and after the
fourth anniversary of the First Vesting Date (the "Last Vesting
Date").

2.2. Notwithstanding any other provision of this Agreement, the
Committee may determine that the Option shall become exercisable in full or in
part, whether or not it is then exercisable, upon such circumstances or events
as the Committee determines, in its sole discretion, merits special
consideration.

2.3. The unexercised portion of the Option (both vested and non-
vested) shall automatically and without notice terminate and become null and
void at the time of the earliest to occur of the following:

2.3.1. The tenth anniversary of the Date of Grant.

2.3.2. Subject to the provisions of Sections 2.3.3, 2.3.4, 2.3.5
and 2.3.6 below, 30 days following the date of termination of Optionee's
status as an employee of the Company and its subsidiaries in the case of
the vested portion of the Option and immediately following such date of
termination in the case of the unvested portion of the Option; provided,
however, that if following such termination as an employee, Optionee is
retained as a consultant, the Board or the Committee, in its sole
discretion, may continue the Option for the balance of the term with
respect to either (a) all Shares covered by it or (b) the Shares for which
the Option has become exercisable as of the date of termination pursuant to
Section 2.1 (in which case the Option shall not be deemed to have
terminated) or may permit the termination to stand. Any such continuation
shall not be deemed the grant of a new option.

2.3.3. If Optionee retires as an employee of the Company with the
consent of the Company, the Option shall expire on the date of
retirement, except for any portion thereof which was otherwise exercisable
on the date of retirement, which shall expire unless exercised within a
period of 90 days after the date of retirement.

2.3.4. If Optionee dies within the 30 day period following the date
of termination of Optionee's status as an employee or consultant
(described in Section 2.3.2) or the 90-day period following retirement with
the consent of the Company (described in Section 2.3.3), any unexercised
portion of the Option which was otherwise exercisable on the date of death
shall be exercisable by Optionee's personal representatives or heirs at
law, if no personal representative is required by the governing state law,
at any time within the one year period from date of death.

2.3.5. In the event of the termination of Optionee's employment by
the Company without Cause (as defined in Optionee's Employment Agreement
with the

2
<PAGE>

Company dated February 28, 1999 (the "Employment Agreement")) or
--------------------
as a result of Optionee's death or Disability (as defined in the Employment
Agreement), the Option shall remain outstanding and continue to vest, and
shall otherwise be treated as if he remained in the employ of the Company
through the earlier of (i) (A) the second (or first if the Company has
waived Optionee's covenant not to compete with the Company set forth in the
Employment Agreement at or prior to the first anniversary of the date of
termination) anniversary of the date of termination in the event of a
termination of Optionee's employment by the Company without Cause or (B)
the Last Vesting Date, in the case of Optionee's death or Disability and
(ii) the occurrence of any circumstance or event that would constitute
Cause. If Optionee dies or becomes Disabled while an employee or
consultant of the Company, the Option shall remain exercisable until the
first anniversary of the later of (i) the Last Vesting Date and (ii) the
date of termination of Optionee's employment.

2.3.6. If Optionee's employment with the Company or any subsidiary is
terminated for Cause, the existence of which shall be determined by the
Committee, in its sole discretion (which determination shall be
conclusive), the Option (both the vested and unvested portions) shall
terminate immediately and Optionee shall have no right after such
termination to exercise any Option he might have exercised prior to his
termination of service.

3. Method of Exercise of Option. Optionee (or the representative of
----------------------------
his estate or his heirs or legatees or a Permitted Transferee (as defined
below)) may exercise all or a portion of the Option to the extent vested and
exercisable by giving written notice of exercise to the Company at its principal
business office, specifying the number of Shares for which the Option is
exercised, accompanied by payment in full of the Option Price for such Shares
together with any amount required for payroll withholding tax under all
applicable federal, state or local laws or regulations. If the Company has
established a form for notice of exercise, Optionee shall use such form. The
Company shall cause certificates for the Shares so purchased to be delivered to
Optionee, such Permitted Transferee or Optionee's personal representatives,
heirs or legatees at its principal business office, as soon as practicable
following receipt of the notice of exercise and the applicable purchase price.
Payment of the Option Price shall be made in United States dollars in the form
of cash, certified check or bank draft, or, with the consent of the Committee,
by delivery to the Company of shares of Common Stock which Optionee has owned
for at least six months, or if the Committee so determines, by withholding
Shares with respect to which Optionee has exercised the Option having a fair
market value (as determined by the Committee) on the date of exercise equal to
the sum of the Option Price for the withheld Shares and the remaining Shares
with respect to which Optionee has exercised the Option, or pursuant to a
"cashless" exercise through a broker or any combination of such methods of
payment. Shares shall be valued at the fair market value (as determined by the
Committee) on the date of exercise.

4. Option Price. Subject to adjustment as provided in Section 9,
------------
the exercise price of the Shares covered by this Agreement shall be $43.00 per
Share.

5. Non-Transferability of Option. The Option is not assignable or
-----------------------------
transferable except by will or by the laws of descent and distribution and the
Option may not

3
<PAGE>

be exercised other than by Optionee or, after the death of Optionee, by
Optionee's personal representative, heirs or legatees; provided, however, that
the Committee may, subject to such terms and conditions as the Committee shall
specify, permit the transfer of the Option to Optionee's family members or to
one or more trusts established in whole or in part for the benefit of one or
more of such family members ("Permitted Transferees"). Without limiting the
---------------------
generality of the foregoing, the Option may not be assigned, transferred (except
as permitted in the preceding sentence), pledged or hypothecated in any way
(whether by operation of law or otherwise), and shall not be subject to levy,
attachment or similar process. Any attempt to assign, transfer, pledge or
hypothecate the Option contrary to the provisions of this Agreement, and any
levy, attachment or similar process upon the Option shall be null and void and
without effect, and the Board or the Committee may, in its discretion, upon the
happening of any such event, terminate the Option as of the date of such event.

6. No Rights Prior to Issuance of Shares. Optionee shall have no
-------------------------------------
rights as a stockholder with respect to the Shares until the date the Company
has issued and delivered the Shares to Optionee as evidenced by the appropriate
entry on the books of the transfer agent of the Company or by actual delivery of
stock certificates, and Optionee's name shall have been entered as the
stockholder of record on the books of the Company and then only as to such
Shares as are actually issued and delivered to Optionee following exercise of
the Option prior to its termination.

7. Restrictions on Exercise and on Common Stock.
--------------------------------------------

7.1. The Shares issued upon exercise of the Option shall be issued
only to Optionee or a person permitted to exercise the Option pursuant to
Section 5.

7.2. The Option shall not be exercisable, in whole or in part, until
such time as the Shares are registered by the Company on a Form S-8.

7.3. The Company may require Optionee to represent to the Company, in
writing, when the Option is exercised, that Optionee is exercising the Option
for Optionee's own account for investment only and not with a view to
distribution and that Optionee will not make any sale, transfer or other
disposition of any Shares purchased except (i) pursuant to a registration
statement filed under the Securities Act of 1933 as amended, which the
Securities and Exchange Commission has declared effective, (ii) pursuant to an
opinion of counsel satisfactory in form and substance to the Company that the
sale, transfer or other disposition may be made without registration, or (iii)
pursuant to a "no action" letter issued to Optionee by the Securities and
Exchange Commission. The Company may require each share certificate
representing Shares to bear a legend stating that the Shares evidenced thereby
may not be sold or transferred except in compliance with the Securities Act of
1933, as amended, and the provisions of this Agreement. The certificate(s) may
be made subject to a stop transfer order placed with the Company's transfer
agent. Notwithstanding anything contained herein to the contrary, the Option
shall not be exercisable at a time when the exercise thereof may result in the
violation of any law or governmental order or regulation.

4
<PAGE>

8. Right to Terminate Employment. This Agreement does not
-----------------------------
constitute a contract of, or an implied promise to continue, Optionee's
employment or status with the Company or any subsidiary of the Company; and
nothing contained in this Agreement shall confer upon Optionee the right to
continue such employment or status; nor does this Agreement affect the right of
the Company to terminate Optionee's employment or status at any time. Optionee
shall have no rights in the benefits conferred by the Option or in any Shares
except to the extent the Option is exercised while vested and prior to
termination. Termination of the Option by reason of termination of employment
shall give no rise for any claim for damages by Optionee under this Agreement
and shall be without prejudice to any rights or remedies which the Company or
any subsidiary of the Company may have against Optionee.

9. Adjustment.
----------

9.1. In the event of any subdivision (stock split) or consolidation
(reverse split) of the issued Common Stock of the Company, or any other
recapitalization of the Company, or any business combination or other
transaction involving the Company, which shall substantially affect the rights
of holders of Common Stock, the Board or the Committee shall make such
appropriate adjustments to the number of Shares and price per Share covered by
the Option, and any other rights under the Option, as deemed appropriate by the
Board or the Committee, as the case may be (whose good faith determination shall
be absolute and binding upon Optionee), to provide Optionee with a benefit
equivalent to that to which Optionee would have been entitled if such event had
not occurred.

9.2. In case the Company is merged or consolidated with another
corporation, or in case of a reorganization of the Company, the Board or the
board of directors of any corporation assuming the obligations of the Company
hereunder shall either (i) make appropriate provisions for the protection of any
outstanding portion of the Option by the substitution on an equitable basis of
appropriate securities of the Company, or appropriate securities of the merged,
consolidated, or otherwise reorganized corporation, or the appropriate
adjustment in the option price, or both, or (ii) give written notice to Optionee
that his Option must be exercised, to the extent then exercisable, within 60
days of the date of such notice or the Option will terminate, and to the extent
that the Option is not exercised within such 60-day period it shall terminate
and be of no further effect.

10. Taxes. If the Company shall be required to withhold any amounts
-----
by reason of any federal, state or local tax rules or regulations in respect of
the payment of cash or the issuance of Shares pursuant to the exercise of an
Option, the Company shall be entitled to deduct and withhold such amounts from
any cash payments to be made to Optionee. In any event, Optionee shall either
(i) make available to the Company, promptly when requested by the Company,
sufficient funds to meet the requirements of such withholding, or (ii) to the
extent permitted by the Committee, irrevocably authorize the Company to withhold
from the Shares otherwise issuable to Optionee as a result of such exercise a
number of Shares having a fair market value, as of the date the withholding tax
obligation arises (the "Tax Date") which alone, or when added to funds paid to
--------
the Company by Optionee, equal the amount of the minimum withholding tax
obligation (the "Withholding Election") and the Company shall be entitled to
--------------------

5
<PAGE>

take and authorize such steps as it may deem advisable in order to have such
funds made available to the Company out of any funds or property due or to
become due to Optionee. Optionee's Withholding Election may only be made prior
to the Tax Date and may be disapproved by the Committee. The Committee may
establish such rules and procedures as it may deem necessary or advisable in
connection with the withholding of taxes relating to the exercise of the Option.

11. Set-Off. If at any time Optionee is indebted to the Company or
-------
any subsidiary, the Company may in the discretion of the Board or the Committee
(a) withhold from Optionee (i) following the exercise by Optionee of an Option,
Shares issuable to Optionee having a fair market value on the date of exercise
up to the amount of indebtedness to the Company or (ii) following the sale by an
Optionee of Shares received pursuant to the exercise of an Option, amounts due
to such Optionee in connection with the sale of such Shares up to the amount of
indebtedness to the Company, or (b) take any substantially similar action. The
Board or the Committee may establish such rules and procedures as they deem
necessary or advisable in connection with the taking of any action contemplated
by this Section 11.

12. Notices. Each notice relating to this Agreement shall be in
-------
writing and delivered in person or by certified mail to the proper address.
Each notice to the Company shall be addressed to it at its principal office,
attention of the General Counsel. Each notice to Optionee (or other person or
persons then entitled to exercise the Option) shall be addressed to Optionee (or
such other person or persons) at Optionee's most recent address on the books of
the Company. Anyone to whom a notice may be given under this Agreement may
designate a new address by notice to that effect. Each notice shall be deemed
to have been given on the day it is received.

13. Benefits of Agreement. This Agreement shall inure to the benefit
---------------------
of and be binding upon each successor of the Company. Rights granted to the
Company under this Agreement shall be binding upon Optionee's personal
representatives and heirs at law.

14. Source of Rights. This Agreement shall be the sole and exclusive
----------------
sources of any and all rights which Optionee, and Optionee's Permitted
Transferees, personal representatives or heirs at law, may have in respect of
the Option as granted hereunder.

15. Captions. The captions contained in this Agreement are for
--------
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.

16. Interpretation and Construction. The Option shall be
-------------------------------
administered by the Committee. The Committee shall have authority to interpret
and construe the terms of the Option, to make all determinations necessary or
advisable for the administration of the Option (including determinations
relating to the delivery of Shares of Common Stock in payment of the purchase
price of the Shares covered by the Option and any tax withholding obligations,
subject to compliance with any applicable rules promulgated under Section 16 of
the Exchange Act). The good faith interpretation and construction by the Board
or by the Committee of any provision of this Agreement shall be final and
conclusive and binding on the parties hereto.

6
<PAGE>

17. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall constitute an original, but all of which taken
together shall constitute one and the same Agreement.

18. Governing Law. This Agreement shall be construed in accordance
-------------
with and governed by the laws of the State of New Jersey without regard to any
principles of conflict of laws.

EXECUTION
---------

The parties signed this Agreement as of the day and year first above
written, whereupon it became binding in accordance with its terms.

SYNETIC, INC.

By:
----------------------------------
Charles A. Mele
Executive Vice President
and General Counsel

-----------------------------------
James Love

<PAGE>
EXHIBIT 10.39

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (the "Agreement") dated as of June 11, 1999, by
---------
and between CAREINSITE, INC., a Delaware corporation (the "Company"), and STEVEN
-------
ZATZ ("Executive").
---------

WHEREAS, the Company desires to employ Executive on a full-time basis
and Executive desires to be so employed by the Company;

NOW, THEREFORE, in consideration of the mutual covenants in this
Agreement, the parties agree as follows:

1. Effectiveness of Agreement and Employment of Executive.
------------------------------------------------------

1.1. Effectiveness of Agreement. This Agreement shall become
--------------------------
effective as of June 11, 1999 (the "Effective Date").
--------------

1.2. Employment by the Company. The Company hereby employs Executive
-------------------------
and Executive hereby accepts such employment with the Company. Executive shall
report to the Chief Executive Officer or Chairman of the Board of the Company,
or to any person that the Chief Executive Officer or Chairman of the Board of
the Company may designate. Executive's title shall initially be Senior Vice
President of the Company. Executive shall perform such duties and services for
the Company, its subsidiaries and affiliates (such subsidiaries and affiliates
collectively, "Affiliates"), and at such locations, as may be designated from
----------
time to time by the Company. Executive shall use his best and most diligent
efforts to promote the interests of the Company and the Affiliates, and shall
devote all of his business time and attention to his employment under this
Agreement.

1.3. Confidentiality. (a) Executive understands and acknowledges that
---------------
in the course of his employment, he will have access to and will learn
information that is proprietary to, or confidential to the Company and its
Affiliates that concerns the operation, methodology and plans of the Company and
its Affiliates, including, without limitation, business strategy and plans,
financial information, protocols, proposals, manuals, clinical procedures and
guidelines, technical data, computer source codes, programs, software, know-how
and specifications, copyrights, trade secrets, market information, Developments
(as hereinafter defined), information regarding acquisition and other strategic
partner candidates, and customer information (collectively, "Proprietary
-----------
Information"). Executive agrees that, at all times (including following
- -----------
termination of his employment with the Company), he will keep confidential and
will not disclose directly or indirectly any such Proprietary Information to any
third party, except as required to fulfill his duties hereunder, and will not
misuse, misappropriate or exploit such Proprietary Information in any way. The
restrictions contained herein shall not apply to any
<PAGE>

information which Executive can demonstrate (i) was known by Executive prior to
the Effective Date, (ii) was already available to the public or the Company's
industry at the time of disclosure, or subsequently becomes available to the
public or the Company's industry, otherwise than by breach of this Agreement by
Executive, (iii) was the subject of a court order for Executive to disclose or
(iv) was learned by Executive from an unrelated third party to which the Company
had disclosed such information without any duty of confidentiality. Upon any
termination of Executive's employment, Executive shall immediately return to the
Company all copies of any Proprietary Information in his possession.

(b) Executive agrees that at no time during his employment by the
Company or thereafter, shall he make, or cause or assist any other person to
make, any statement or other communication to any third party which falsely
impugns or attacks, or is otherwise critical of, the reputation, business or
character of the Company, its Affiliates or any of their respective officers or
employees.

1.4. Restrictions on Solicitation. During the period beginning on the
----------------------------
Effective Date and ending on the first anniversary of the date of cessation of
the employment of Executive for any reason whatsoever (or ending on the six
month anniversary of the date of cessation of the employment of Executive
pursuant to Section 4.4 or 4.6, subject to extension under Section 4.4 or 4.6)
(the "Restricted Period"), Executive shall not, directly or indirectly, without
-----------------
the prior written approval of the Company, solicit or contact any customer, or
any prospective customer, of the Company or any of the Affiliates for any
commercial pursuit which is in competition with the Company or any of the
Affiliates, or that is contemplated from time to time by the Business Plan (as
defined below) or take away or interfere or attempt to interfere with any
custom, trade, business or patronage of the Company or any of the Affiliates.
During the Restricted Period, Executive shall not, directly or indirectly,
without the prior written approval of the Company, solicit or induce, or attempt
to induce, any employees, agents or consultants of or to the Company or any of
the Affiliates to leave the employ of the Company or such Affiliate or do
anything from which Executive is restricted by reason of this Agreement nor
shall Executive, directly or indirectly, offer or aid others to offer employment
to or interfere or attempt to interfere with any employees, agents or
consultants of the Company or any of the Affiliates. For purposes of this
Agreement, "Business Plan" shall mean, at any point in time, the then current
-------------
business plan of the Company or any of the Affiliates and any business plans of
the Company or any of the Affiliates in effect during the prior 18 months.

1.5. Restrictions on Competitive Employment. (a) During the
--------------------------------------
Restricted Period, Executive shall not, anywhere in the United States, directly
or indirectly, without the prior written approval of the Company, own an
interest in or, as principal, agent, employee, consultant or otherwise, engage
in activities for or render services to, any firm or business (i) engaged in
direct or indirect competition with the Company or any of its Affiliates, (ii)
developing products or services competitive with those of the Company or any of
its Affiliates or (iii) conducting any business in which the Company or any of
its Affiliates is then engaged if Executive has engaged in activities for such
business of the Company or such Affiliates or obtained Proprietary Information
with respect thereto (all of the businesses in clauses (i), (ii) and (iii)
collectively, "Competitive Business"); provided, however, that in the
--------------------

2
<PAGE>

event that this Agreement is assigned by the Company to an unrelated third party
pursuant to Section 7.4, the definition of "Competitive Business" for purposes
of this Section 1.5 shall not include any products or services of such third
party that are unrelated to the products or services produced or provided by the
Company or the Affiliates immediately prior to the date of such assignment,
except to the extent Executive becomes directly or indirectly involved in the
production or provision of such third party products or services or obtains
Proprietary Information with respect thereto. Notwithstanding the foregoing,
Executive may have an interest consisting of publicly traded securities
constituting less than 1 percent of any class of publicly traded securities in
any public company engaged in a Competitive Business so long as he is not
employed by and does not consult with, or become a director of or otherwise
engage in any activities for, such company.

(b) For purposes of the covenant not to compete set forth in paragraph
(a) above, Executive acknowledges that the Company and its Affiliates presently
conduct their businesses throughout the United States. Executive agrees that
the Restricted Period and the geographical areas encompassed by such covenant
are necessary and reasonable in order to protect the Company and its Affiliates
in the conduct of their businesses. The parties intend that the foregoing
covenant of Executive shall be construed as a series of separate covenants, one
for each geographic area specified. Except for geographic coverage, each such
separate covenant shall be deemed identical in terms to the covenant set forth
in paragraph (a) above. To the extent that the foregoing covenant or any
provision of this Section 1.5 shall be deemed illegal or unenforceable by a
court or other tribunal of competent jurisdiction with respect to (i) any
geographic area, (ii) any part of the time period covered by such covenant,
(iii) any activity or capacity covered by such covenant or (iv) any other term
or provision of such covenant, such determination shall not affect such covenant
with respect to any other geographic area, time period, activity or other term
or provision covered by or included in such covenant.

1.6. Assignment of Developments. All Developments that are at any
--------------------------
time made, conceived or suggested by Executive, whether acting alone or in
conjunction with others, arising out of or as a result of Executive's employment
with the Company shall be the sole and absolute property of the Company and the
Affiliates, free of any reserved or other rights of any kind on Executive's
part. During Executive's employment and, if such Developments were made,
conceived or suggested by Executive during or as a result of Executive's
employment under this Agreement or any other employment with the Company or the
Affiliates, thereafter, Executive shall promptly make full disclosure of any
such Developments to the Company and, at the Company's cost and expense, do all
acts and things (including, among others, the execution and delivery under oath
of patent and copyright applications and instruments of assignment) deemed by
the Company to be necessary or desirable at any time in order to effect the full
assignment to the Company and the Affiliates of Executive's right and title, if
any, to such Developments. For purposes of this Agreement, the term

"Developments" shall mean all data, discoveries, findings, reports, designs,
- -------------
inventions, improvements, methods, practices, techniques, developments,
programs, concepts, and ideas, whether or not patentable, relating to the
present or planned activities, or future activities, or the products and
services of the Company or any of the Affiliates.

3
<PAGE>

1.7. Remedies. Executive acknowledges and agrees that damages for a
--------
breach or threatened breach of any of the covenants set forth in Sections 1.3
through 1.6 will be difficult to determine and will not afford a full and
adequate remedy, and therefore agrees that the Company, in addition to seeking
actual damages in connection therewith, may seek specific enforcement of any
such covenant in any court of competent jurisdiction, including, without
limitation, by the issuance of a temporary or permanent injunction.

2. Compensation and Benefits.
-------------------------

2.1. Salary. The Company shall pay Executive for services during his
------
employment under this Agreement a base salary at the annual rate of $175,000

("Base Salary"). Any and all increases to Executive's Base Salary shall be
- -------------
determined by the Board of Directors of the Company, in its sole discretion.
Such Base Salary shall be payable in equal installments, no less frequently than
monthly, pursuant to the Company's customary payroll policies in force at the
time of payment, less any required or authorized payroll deductions.

2.2. Benefits. During his employment under this Agreement, Executive
--------
shall be entitled to participate, on the same basis and at the same level as
other similarly situated executives of the Company, in any group insurance,
hospitalization, medical, health and accident, disability, fringe benefit and
tax-qualified retirement plans or programs or vacation leave of the Company now
existing or hereafter established to the extent that he is eligible under the
general provisions thereof. In addition, the Company shall reimburse Executive
for any out-of-pocket expenses incurred by Executive to continue his group
health plan coverage with his previous employer pursuant to Section 4980B(f) of
the Internal Revenue Code of 1986, as amended, for a period commencing on the
Effective Date and ending on the earlier of (i) the relocation of Executive's
residence to the Elmwood Park, New Jersey area and (ii) the 18 month anniversary
of the Effective Date.

2.3. Expenses. Pursuant to the Company's customary policies in force
--------
at the time of payment, Executive shall be promptly reimbursed, against
presentation of vouchers or receipts therefor, for all authorized expenses
properly and reasonably incurred by him on behalf of the Company or its
Affiliates in the performance of his duties hereunder. Executive shall also be
reimbursed for any reasonable legal expenses incurred in connection with the
negotiation of this Agreement, in an amount not to exceed $5,000.

2.4. Travel and Living; Relocation. The Company and Executive
-----------------------------
understand that Executive currently maintains a residence in New Canaan,
Connecticut, but that Executive will be required initially to work at the
Company's headquarters in Elmwood Park, New Jersey. The Company agrees to
provide Executive with an allowance for temporary housing in the Elmwood Park,
New Jersey area for a period commencing on the Effective Date and ending on the
earlier of (i) the relocation of Executive's residence to the Elmwood Park, New
Jersey area and (ii) the 18 month anniversary of the Effective Date. The
Company agrees to pay any expenses related to the relocation of Executive and
his family to the Elmwood Park, New Jersey area, in an amount not to exceed
$50,000.

4
<PAGE>

3. Employment Period.
-----------------

Executive's employment under this Agreement shall commence as of the
Effective Date, and shall terminate on the fifth anniversary thereof (the

"Initial Employment Period"), unless terminated earlier pursuant to Section 4.
- --------------------------
Unless written notice of either party's desire to terminate this Agreement has
been given to the other party prior to the expiration of the Initial Employment
Period (or any one-month renewal thereof contemplated by this sentence), the
term of this Agreement shall be automatically renewed for successive one-month
periods.

4. Termination.
-----------

4.1. Termination by the Company for Cause. (a) Executive's
------------------------------------
employment with the Company may be terminated at any time by the Company for
Cause. Upon such a termination, the Company shall have no obligation to
Executive other than the payment of Executive's earned and unpaid compensation
to the effective date of such termination.

(b) For purposes of this Agreement, the term "Cause" shall mean any of
-----
the following:

1. A willful failure of Executive to perform his duties in any
material respect which failure is not cured by Executive within 20 days
following written notice from the Company detailing such failure;

2. Any willful misconduct by Executive relating, directly or
indirectly, to the Company or any of its Affiliates, which breach, if
susceptible to cure, is not cured by Executive within 20 days following
written notice from the Company detailing such breach;

3. Any breach by Executive of any material provision contained
in this Agreement (including, without limitation, Sections 1.3 through
1.6), which breach, if susceptible to cure, is not cured by Executive
within 20 days following written notice from the Company detailing such
breach;

4. Any breach by Executive of a material Company policy known by
Executive, which breach, if susceptible to cure, is not cured by Executive
within 20 days following written notice from the Company detailing such
breach; or

5. Executive's conviction of a felony or crime involving moral
turpitude.

4.2. Permanent Disability. If during his employment with the Company,
--------------------
Executive shall become ill, mentally or physically disabled, or otherwise
incapacitated so as to be unable regularly to perform the duties of his position
for a period in excess of 90 consecutive days or more than 120 days in any
consecutive 12 month period, then the Company shall have the right to terminate
Executive's employment with the Company upon written notice to

5
<PAGE>

Executive. Upon such a termination, the Company shall have no obligation to
Executive other than the payment of Executive's earned and unpaid compensation
to the effective date of such termination.

4.3. Death. Executive's employment with the Company shall be deemed
-----
terminated by the Company upon the death of Executive and the Company shall have
no obligation to Executive or Executive's estate other than the payment of
Executive's earned and unpaid compensation to the effective date of such
termination.

4.4. Termination by the Company Without Cause. Executive's employment
----------------------------------------
with the Company may be terminated at any time by the Company without Cause. If
the Company terminates Executive's employment without Cause (not including by
notice of the Company pursuant to Section 3 of its desire to not renew this
Agreement), the Company shall have no obligation to Executive other than (i) the
payment of Executive's earned and unpaid compensation to the effective date of
such termination, (ii) as provided in Section 5 of this Agreement and the Stock
Option Agreement (as defined below) and (iii) a continuation of Executive's Base
Salary (at the rate in effect at the time of such termination) for a period (the
"Severance Period") commencing on the date of termination and ending on the six
----------------
month anniversary of the date of termination; provided, however, that the
Severance Period may, at the election of the Company upon written notice
provided to Executive on or prior to the 30/th/ day following the commencement
of the Severance Period, be extended by a period of up to an additional six
months, in which case the Restricted Period for purposes of Sections 1.4 and 1.5
shall be extended by same amount of time.

4.5. Liquidated Damages. Executive acknowledges that any payments and
------------------
benefits under Sections 4 and 5 resulting from a termination of his employment
with the Company are in lieu of any and all claims that Executive may have
against the Company (other than benefits under the Company's employee benefit
plans that by their terms survive termination of employment and benefits under
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended and
rights to indemnification under certain indemnification arrangements for
officers of the Company), and represent liquidated damages (and not a penalty).
The Company may request that Executive confirm such acknowledgment in writing
prior to the receipt of such benefits.

4.6. Termination by Executive for Good Reason. (a) Executive's
----------------------------------------
employment with the Company may be terminated at any time by Executive for Good
Reason. If Executive terminates his employment for Good Reason, the Company
shall have the same obligations to Executive that it would have had under
Section 4.4 if Executive's employment with the Company were terminated by the
Company without Cause.

(b) For purposes of this Agreement, the term "Good Reason" shall mean
-----------
any of the following conditions or events which condition(s) or event(s) remain
in effect 20 days after written notice is provided by Executive to the Company
detailing such condition or event:

1. A material reduction in Executive's title or responsibilities, as
set forth in Section 1.2;

6
<PAGE>

2. The relocation of Executive's principal place of work more than 30
miles from the Elmwood Park, New Jersey area or the New York City
metropolitan area; or

3. Any material breach by the Company of this Agreement (including,
without limitation, any reduction in Executive's Base Salary).

4.7. Termination by Executive Without Good Reason. Executive may
--------------------------------------------
resign from his employment with the Company at any time without Good Reason.
Upon such a termination, the Company shall have no obligation other than the
payment of Executive's earned but unpaid compensation to the effective date of
such termination.

5. Stock Option.
------------

Upon the initial public offering of the Company's common stock,
Executive shall be granted an option (the "Stock Option") to purchase 160,000
------------
shares of the Company's common stock (the "Shares") pursuant to the terms of a
------
stock option agreement to be entered into between the Company and Executive,
which agreement shall be in substantially the same form provided by the Company
to its officers generally (the "Stock Option Agreement"). The Stock Option
----------------------
shall be exercisable in accordance with the following schedule:

Number of Months Elapsed % of Stock
from the Date of Grant Option Exercisable
---------------------- ------------------

30 40%
42 60%
54 80%
66 100%

In the event that Executive's employment with the Company is terminated by the
Company without Cause under Section 4.4 or by Executive for Good Reason under
Section 4.6, 20% of the Stock Option (i.e., options to purchase 32,000 Shares)
(or, if such termination occurs more than 12 but less than 30 months from the
date of grant of the Stock Option, 40% of the Stock Option (i.e., options to
purchase 64,000 Shares)), if then unvested, shall remain outstanding and
continue to vest as if Executive remained in the employ of the Company through
the earlier of (i) the next vesting date of the Stock Option and (ii) any breach
by Executive of any provision of this Agreement (including, without limitation,
Section 1.3, 1.4, 1.5 or 1.6). Notwithstanding the foregoing, all of the terms
and conditions of the Stock Option shall be governed exclusively by the express
provisions of the Stock Option Agreement.

6. Notices.
-------

Any notice or communication given by either party hereto to the other
shall be in writing and personally delivered or mailed by registered or
certified mail, return receipt requested, postage prepaid, to the following
addresses:

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(a) if to the Company:

CareInsite, Inc.
River Drive Center 2
669 River Drive
Elmwood Park, New Jersey 07407-1361
Telecopier No.: (201) 703-3401
Attention: Legal Counsel

(b) if to Executive at the address set forth below.

Any notice shall be deemed given when actually delivered to such
address, or two days after such notice has been mailed or sent by Federal
Express, whichever comes earliest. Any person entitled to receive notice may
designate in writing, by notice to the other, such other address to which
notices to such person shall thereafter be sent.

7. Miscellaneous.
-------------

7.1. Representations and Covenants. In order to induce the Company to
-----------------------------
enter into this Agreement, Executive makes the following representations and
covenants to the Company and acknowledges that the Company is relying upon such
representations and covenants:

(a) No agreements or obligations exist to which the Executive is a
party or otherwise bound, in writing or otherwise, that in any way
interfere with, impede or preclude him from fulfilling all of the terms and
conditions of this Agreement.

(b) Executive, during his employment, shall use his best efforts to
disclose to the Chairman of the Board or Chief Executive Officer of the
Company in writing or by other effective method any bona fide information
known by him and not known to the Chairman of the Board or Chief Executive
Officer of the Company that he reasonably believes would have any material
negative impact on the Company or an Affiliate.

7.2. Entire Agreement. This Agreement and the Stock Option Agreement
----------------
contain the entire understanding of the parties in respect of their subject
matter and supersede upon their effectiveness all other prior agreements and
understandings between the parties with respect to such subject matter.

7.3. Amendment; Waiver. This Agreement may not be amended,
-----------------
supplemented, canceled or discharged, except by written instrument executed by
the party against whom enforcement is sought. No failure to exercise, and no
delay in exercising, any right, power or privilege hereunder shall operate as a
waiver thereof. No waiver of any breach of any provision of this Agreement
shall be deemed to be a waiver of any preceding or succeeding breach of the same
or any other provision.

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7.4. Binding Effect; Assignment. The rights and obligations of this
--------------------------
Agreement shall bind and inure to the benefit of any successor of the Company by
reorganization, merger or consolidation, or any assignee of all or substantially
all of the Company's business and properties. The Company may assign its rights
and obligations under this Agreement to any of its Affiliates without the
consent of the Executive. Executive's rights or obligations under this
Agreement may not be assigned by Executive, except that the rights specified in
Section 4.3 shall pass upon the Executive's death to Executive's executor or
administrator.

7.5. Headings. The headings contained in this Agreement are for
--------
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.

7.6. Governing Law; Interpretation. This Agreement shall be construed
-----------------------------
in accordance with and governed for all purposes by the laws and public policy
(other than conflict of laws principles) of the State of New Jersey applicable
to contracts executed and to be wholly performed within such State.

7.7. Further Assurances. Each of the parties agrees to execute,
------------------
acknowledge, deliver and perform, and cause to be executed, acknowledged,
delivered and performed, at any time and from time to time, as the case may be,
all such further acts, deeds, assignments, transfers, conveyances, powers of
attorney and assurances as may be reasonably necessary to carry out the
provisions or intent of this Agreement.

7.8. Severability. The parties have carefully reviewed the provisions
------------
of this Agreement and agree that they are fair and equitable. However, in light
of the possibility of differing interpretations of law and changes in
circumstances, the parties agree that if any one or more of the provisions of
this Agreement shall be determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the provisions of this
Agreement shall, to the extent permitted by law, remain in full force and effect
and shall in no way be affected, impaired or invalidated. Moreover, if any of
the provisions contained in this Agreement are determined by a court of
competent jurisdiction to be excessively broad as to duration, activity,
geographic application or subject, it shall be construed, by limiting or
reducing it to the extent legally permitted, so as to be enforceable to the
extent compatible with then applicable law.

7.9. Withholding Taxes. All payments hereunder shall be subject to
-----------------
any and all applicable federal, state, local and foreign withholding taxes.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

CAREINSITE, INC.

By:_______________________

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Name:
Title:

EXECUTIVE

---------------------------
Steven Zatz

15 Mill Road Street
---------------------------
Street

New Canaan, Connecticut 06840
-------------------------------------
City, State, Zip Code