EXHIBIT 4.7
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
AND MAY NOT BE SOLD, TRANSFERRED OR ASSIGNED OR UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT, THE SALE IS MADE IN ACCORDANCE WITH RULE
144 UNDER SUCH ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL THAT SUCH
SALE, TRANSFER OR ASSIGNMENT IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SUCH ACT.
WARRANT TO PURCHASE COMMON STOCK
OF
HEALTHGATE DATA CORP.
(void after April 27, 2005)
This Warrant to Purchase Common Stock (this "Warrant") is issued as of October
27, 2003 (the "Effective Date") and certifies that, for value received, the
Holder hereof (as defined below) is entitled to purchase the Warrant Stock (as
defined below) from HealthGate Data Corp., a Delaware corporation (the
"Company"), at any time during the Exercise Period (as defined below) by the
exercise or conversion of this Warrant in accordance with the terms and subject
to the conditions set forth in this Warrant.
1. DEFINITIONS. As used in this Warrant, the following terms shall have the
definitions ascribed to them below:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Common Stock" shall mean the Common Stock, par value $0.03 per share, of
the Company.
(c) "Exercise Period" shall mean the period commencing on the Effective Date and
ending at 5:00 p.m., Eastern Standard Time, on April 27, 2005.
(d) "Fair Market Value," with respect to a share of Warrant Stock shall mean, as
applicable, (A) if the Common Stock is publicly traded on a stock exchange or a
NASDAQ system or the over-the counter bulletin board (OTC-BB), the average
closing price (last trade) of Common Stock for the last ten (10) trading days on
which trades occurred immediately prior to the date of valuation or (B)
otherwise, the fair market value of one share of Common Stock, as determined in
good faith by the Board, provided that the Holder shall have the right to demand
that such fair market value be determined instead by a mutually agreeable
valuation firm or, if no firm can be mutually agreed upon, by a
nationally-recognized accounting firm selected by an arbitrator chosen pursuant
to the rules of the American Arbitration Association.
(e) "Holder" shall mean each person or entity that validly holds this Warrant
(or any portion thereof) for so long as this Warrant (or any portion thereof) is
so held, the initial Holder being Duke University Medical Center.
(f) "Warrant Price" shall mean $1.20 per share of Warrant Stock, subject to
adjustment as described in Section 4 below.
(g) "Warrant Stock" shall mean 30,000 shares of the Common Stock, subject to
adjustment as described in Section 4 below.
2. EXERCISE OF WARRANT. This Warrant may be exercised by the Holder with respect
to the Warrant Stock for which this Warrant, or any portion thereof, at any time
and from time to time during the Exercise Period. Whenever the Holder desires to
exercise this Warrant, or a portion hereof, the Holder shall surrender, at the
principle office of the Company, this Warrant, together with the Notice of
Exercise and the Investment Representation Statement in the forms attached
hereto as ATTACHMENTS 1 AND 3, respectively, duly completed and executed, and
accompanied by payment in full of the Warrant Price in cash or by check with
respect to the shares of Warrant Stock being purchased. To the extent exercised,
this Warrant shall be deemed to have been exercised immediately prior to the
close of business on the date of its surrender for exercise as provided above,
and the Holder, or its duly-appointed nominee, shall be treated for all purposes
as the holder of record of such Warrant Stock as of the close of business on
such date. As promptly as practicable after such date but in any event within
ten (10) business days thereafter, the Company shall issue and deliver to the
Holder or such nominee a certificate or certificates for the number of full
shares of Warrant Stock issuable upon such exercise. If the Warrant shall be
exercised for less than the total number of shares of Warrant Stock then
issuable upon exercise, promptly after surrender of the Warrant upon such
exercise the Company will execute and deliver a new warrant dated the Effective
Date, evidencing the right of the Holder to purchase the balance of the Warrant
Stock purchasable hereunder upon the same terms and conditions set forth herein.
3. CONVERSION (NET ELECTION). In lieu of exercising this Warrant (or any portion
hereof), the Holder shall have the right to convert this Warrant (or any portion
hereof) into Warrant Stock by executing and delivering to the Company at its
principal office the written Notice of Conversion and Investment Representation
Statement in the forms attached hereto as ATTACHMENTS 2 AND 3, respectively,
specifying the portion of the Warrant to be converted, and accompanied by this
Warrant. The number of shares of Warrant Stock to be issued to the Holder upon
such conversion shall be computed using the following formula:
X = (P)(Y)(A-B)/A
where X = the number of shares of Warrant Stock to be issued to the
Holder for the portion of the Warrant being converted.
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P = the portion of the Warrant being converted expressed as a decimal.
Y = the total number of shares of Warrant Stock then issuable upon
exercise of the Warrant in full.
A = the Fair Market Value of one share of Warrant Stock as of
the last business day immediately prior to the date the notice
of conversion is received by the Company.
B = the Warrant Price on the date of conversion.
Any portion of this Warrant that is converted shall be immediately canceled.
This Warrant, to the extent converted, shall be deemed to have been converted
immediately prior to the close of business on the date of its surrender for
conversion as provided above, and the Holder, or its duly-appointed nominee,
shall be treated for all purposes as the holder of record of such Warrant Stock
as of the close of business on such date. As promptly as practicable after such
date, but in any event within ten (10) business days thereafter, the Company
shall issue and deliver to the Holder or such nominee a certificate or
certificates for the number of full shares of Warrant Stock issuable upon such
conversion. If the Warrant shall be converted for less than the total number of
shares of Warrant Stock then issuable upon conversion, promptly after surrender
of the Warrant upon such conversion, the Company will execute and deliver a new
Warrant, dated the date hereof, evidencing the right of the Holder to purchase
the balance of the Warrant Stock purchasable hereunder upon the same terms and
conditions set forth herein.
4. ADJUSTMENTS AND NOTICES.
(a) SUBDIVISION, STOCK DIVIDENDS OR COMBINATIONS. In case the Company shall
at any time subdivide the outstanding shares of Common Stock or shall issue a
dividend in the form of Common Stock with respect to Common Stock, the Warrant
Price in effect immediately prior to such subdivision or the issuance of such
dividend shall be proportionately decreased, and the number of shares of Warrant
Stock purchasable immediately prior to such subdivision or issuance of dividend
shall be proportionately increased, effective at the close of business on the
date of such subdivision or dividend. In case the Company shall at any time
combine the outstanding shares of Common Stock the Warrant Price in effect
immediately prior to such combination shall be proportionately increased, and
the number of shares of Warrant Stock purchasable immediately prior to such
combination shall be proportionately decreased, effective at the close of
business on the date of such combination. The provisions of this Section 4(a)
shall similarly apply to successive subdivisions, dividends in Common Stock and
combinations.
(b) RECLASSIFICATION, EXCHANGE, SUBSTITUTION, ETC. In case of any capital
reorganization, reclassification, exchange, substitution or other event results
in a change of the rights, preferences or other terms of the Common Stock (other
than a liquidation, a change in par value or a change resulting from a stock
dividend or subdivision or combination of shares) (any of the foregoing, a
"Recapitalization Event"), the Company shall, as a condition to such event,
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duly execute and deliver to the Holder a new warrant so that the Holder shall
have the right to receive, at a total purchase price not to exceed that payable
upon the exercise of the unexercised portion of this Warrant, and in lieu of the
Warrant Stock theretofore issuable upon exercise of this Warrant, the kind and
amount of shares of stock, other securities, money and property that would have
been receivable by the Holder upon such event had the Holder exercised this
Warrant in full immediately prior to the effective time of such event. Such new
warrant shall provide for adjustments that shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section 4. The provisions
of this Section 4(b) shall similarly apply to successive Recapitalization
Events.
(c) MERGER. In case of any merger or consolidation of the Company into or
with another corporation where the Company is not the surviving corporation,
such successor or purchasing corporation shall, as a condition to closing such
merger or consolidation, duly execute and deliver to the Holder a new warrant so
that the Holder shall have the right to receive, at a total purchase price not
to exceed that payable upon the exercise of the unexercised portion of this
Warrant, and in lieu of the Warrant Stock theretofore issuable upon exercise of
this Warrant, the kind and amount of shares of stock, other securities, money
and property that would have been receivable by the Holder pursuant to such
merger or consolidation had the Holder exercised this Warrant in full
immediately prior to the effective time of such event. In the event that all
holders of Common Stock do not receive the same kind and amount of consideration
pursuant to such merger or consolidation, the Holder shall have the right to
choose the kind and amount of consideration for which the new warrant will be
exercisable from among the combinations of kind and amount of consideration
offered to any holder of Common Stock pursuant to such merger or consolidation.
Such new warrant shall provide for adjustments that shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
4. The provisions of this Section 4(c) shall similarly apply to successive
mergers and consolidations.
(d) SALE OF ASSETS. In case of any sale, transfer or lease (but not
including a transfer or lease by pledge or mortgage to a bona fide lender) of
all or substantially all of the assets of the Company, the Company shall, as a
condition to closing any such sale, transfer or lease, offer to the Holder for
thirty (30) days a new warrant entitling the Holder to receive, at a total
purchase price not to exceed that payable upon the exercise of the unexercised
portion of this Warrant, and in lieu of the Warrant Stock theretofore issuable
upon exercise of this Warrant, a pro rata portion of the kind and amount of
shares of stock, other securities, money and property receivable by the Company
upon such sale, transfer or lease, such pro rata portion to be a fraction, the
numerator of which is the number of shares of Warrant Stock for which this
Warrant is then exercisable and the denominator of which is the total number of
shares of Common Stock then issued and outstanding (assuming the conversion or
exchange of all equity securities, options and warrants (including this Warrant)
then convertible or exchangeable for Common Stock at the rate of conversion or
exchange then in effect). Such new warrant shall provide for adjustments that
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Section 4. In the event that the Holder does not accept such offer
of a new warrant within thirty (30) days of receiving notice of the Company's
offer, the Company shall have the right to consummate the sale, transfer or
lease without delivering such new warrant to the Holder and this Warrant shall
continue in full force and effect, unaffected by such sale, transfer or lease.
If the Holder does
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accept such offer within such thirty (30) day period, the Company shall duly
execute and deliver such new warrant to the Holder prior the consummation of
such sale, transfer or lease. The provisions of this Section 4(d) shall
similarly apply to successive such sales, transfers and leases.
(e) IN-KIND DIVIDEND OR DISTRIBUTION. Upon the payment of a dividend or the
making of a distribution with respect to Common Stock in securities, money or
property other than Common Stock, the Holder shall be entitled to receive, upon
exercise or conversion of this Warrant, both the Warrant Stock and the kind and
amount of shares of securities, money and property that would have been
receivable by the Holder upon the payment of such dividend or distribution had
the Holder exercised this Warrant in full immediately prior to the record date
for such dividend or distribution (such additional securities, money and
property, all proceeds thereof and any other property substituted therefore, the
"Additional Property"); provided, however, that no additional Warrant Price
shall be payable by the Holder upon the exercise or conversion of this Warrant
in respect of such Additional Property. In the event that this Warrant is
exercised or converted in part, but not in whole, the Holder shall be entitled
to the portion of the Additional Property that is attributable to the Warrant
Stock actually received by the Holder upon such exercise or conversion. Any new
warrant that is issued to the Holder in lieu of this Warrant pursuant to
Sections 4(b), 4(c) or 4(d) shall be exercisable for such Additional Property in
addition to the property specified in such sections; provided, however, that any
Additional Property that is convertible or exchangeable by its terms into Common
Stock shall be treated, for purposes of calculating the Holder's pro rata
portion in Section 4(d), as the number of additional shares of Common Stock as
such Additional Property is convertible or exchangeable into shares of Common
Stock, and such Additional Property shall otherwise be excluded from the subject
matter of the new warrant issued pursuant to such Section 4(d). The provisions
of this Section 4(e) shall similarly apply to successive such dividends and
distributions.
(f) NO IMPAIRMENT. The Company shall not, by amendment of its Certificate
of Incorporation or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed under this Warrant by the Company, but shall at all times
in good faith assist in carrying out of all the provisions of this Warrant and
in taking all such action as may be necessary or appropriate to protect the
Holder's rights under this Warrant against impairment. If the Company takes any
action other than as described above that adversely affects the Holder's rights
under this Warrant, the Warrant Price shall be adjusted downward in an equitable
manner.
(g) NOTICE. The Company shall give the Holder written notice of any event
described in this Section 4 as soon as the Company has actual knowledge of such
event but in no event later than the effective time of such event or such
earlier time as shall be otherwise required pursuant to this Section 4. Such
notice shall provide a brief summary of the event (including a reference to the
subsection of this Section 4 which describes such event) and the Holder's rights
as a result thereof and shall set forth, as and if applicable, the Warrant Price
as adjusted, the increased or decreased number of shares of Warrant Stock
purchasable upon the exercise of this Warrant, and reasonable detail regarding
the method of calculation of each. The Company also agrees to notify
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the Holder in writing of any proposed public offering of any class of equity
securities of the Company at least thirty (30) days prior to the effective date
thereof.
5. MISCELLANEOUS.
(a) NO SHAREHOLDER RIGHTS. This Warrant, by itself, as distinguished from
any Warrant Stock purchased hereunder, shall not entitle its holder to any of
the rights of a shareholder of the Company.
(b) FRACTIONAL SHARES. No fractional shares shall be issuable upon exercise
or conversion of the Warrant and the number of shares of Warrant Stock to be
issued upon such exercise or conversion shall be rounded down to the nearest
whole share. If a fractional share interest would otherwise have arisen upon any
exercise or conversion of the Warrant, the Company shall eliminate such
fractional share interest by paying the Holder an amount computed by multiplying
the fractional interest by the Fair Market Value of a full share of Warrant
Stock on the date of exercise or conversion.
(c) REPRESENTATIONS OF THE COMPANY.
(i) This Warrant has been duly and validly authorized,
executed and delivered by the Company and constitutes a valid and
binding agreement of the Company enforceable against the Company in
accordance with its terms. The execution and delivery of this Warrant
is not, and the issuance of the Warrant Stock upon exercise of this
Warrant in accordance with the terms hereof will not be, inconsistent
with the Company's Certificate of Incorporation or bylaws, does not
and will not contravene any law, governmental rule or regulation,
judgment or order applicable to the Company, and does not and will not
conflict with or contravene any provision of, or constitute a default
under, any material indenture, mortgage, contract or other instrument
of which the Company is a party or by which it is bound or require the
consent or approval of, the giving of notice to, the registration or
filing with or the taking of any action in respect of or by, any
Federal, state or local government authority or agency or other
person, except for the filing of notices pursuant to federal and state
securities laws, which filings will be effected by the time required
thereby.
(ii) All Warrant Stock which may be issued upon the
exercise or conversion of this Warrant shall, upon issuance in
accordance with the terms hereof, be duly authorized, validly issued,
fully paid and nonassessable, and free of any pre-emptive rights, liens
and encumbrances, except for restrictions on transfer provided for
herein or under applicable federal and state securities laws.
(d) RESERVATION OF WARRANT STOCK. At all times during the Exercise Period
prior to the full exercise or conversion of this Warrant, the Company will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of Warrant Stock upon the full exercise of
this Warrant. Issuance of this Warrant shall constitute
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full authority to the Company's officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
shares of Warrant Stock issuable upon the exercise or conversion of this
Warrant.
(e) TRANSFER OF WARRANT. This Warrant may be transferred or assigned by the
Holder, in whole or in part, provided that such transfer or assignment is in
compliance with any restrictive legend set forth hereon. Such transfer shall be
effected without charge to the Holder hereof upon surrender of this Warrant with
a properly executed assignment at the principal office of the Company and,
thereafter, the Company shall issue a new warrant registered in the name of the
transferee. If the Warrant is being transferred in part the Company shall issue
new warrants, in each case evidencing the right to purchase the appropriate
number of shares of Warrant Stock, registered in the names of the Holder and the
transferee, as applicable. Upon any transfer of all or any part of this Warrant
to any transferee, such transferee shall be deemed the "Holder" of such warrant
as such term is used herein and shall be deemed the owner thereof for all
purposes. Each Holder, by taking or holding this Warrant, consents and agrees to
be bound by the provisions of this Warrant and consents and agrees that this
Warrant, when endorsed in blank, shall be deemed negotiable, and that the holder
hereof, when this Warrant shall have been so endorsed, may be treated by the
Company, at the Company's option, and all other persons dealing with this
Warrant as the absolute owner hereof for any purpose and as the person entitled
to exercise the rights represented by this Warrant, or to the transfer hereof on
the books of the Company any notice to the contrary notwithstanding, but until
such transfer on such books, the Company may treat the registered owner hereto
as the owner for all purposes.
(f) LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. Upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in case of loss, theft or
destruction, of indemnity reasonably satisfactory to it, and upon reimbursement
to the Company of all reasonable expenses incidental thereto, and upon surrender
and cancellation of this Warrant, if mutilated, the Company will make and
deliver a new Warrant of like tenor (but with no additional rights or
obligations) and dated as of such cancellation, in lieu of this Warrant.
(g) HEADINGS. The headings in this Warrant are for purposes of convenience
and reference only, and shall not be deemed to constitute a part hereof.
(h) SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall be a Saturday or a Sunday or shall be a legal holiday in the Commonwealth
of Massachusetts, then such action may be taken or such right may be exercised
on the next succeeding day that is not a Saturday, Sunday or legal holiday in
the Commonwealth of Massachusetts.
(i) AMENDMENT AND WAIVER. Neither this Warrant nor any term hereof may be
changed or waived orally, but only by an instrument in writing signed by the
Company and the Holder of this Warrant.
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(j) NOTICES. All notices and other communications from the Company to the
Holder of this Warrant shall be delivered personally or mailed by first class
mail, postage prepaid, to the address furnished to the Company in writing by the
last Holder of this Warrant who shall have furnished an address to the Company
in writing, and if mailed shall be deemed given three days after deposit in the
United States mail.
(k) GOVERNING LAW. This Warrant shall be governed by the laws of the State
of Delaware, as such laws are applied to contracts to be entered into and
performed entirely in Delaware by Delaware residents.
ISSUED: October 27, 2003
HEALTHGATE DATA CORP.
By:
------------------------
Xxxxxxx X. Xxxxx
President & Chief Executive Officer
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