Exhibit 10.32
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 EXCEPT TO AN AFFILIATE OF THE
HOLDER 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 October 29, 2004)
This Warrant to Purchase Common Stock (this "Warrant") is issued as of March 22,
2001 (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) "Agreement" shall mean that certain Amended and Restated NBCi
Strategic Alliance Agreement, dated as of March 22, 2001, by and between the
Company and NBC Internet, Inc.
(c) "Common Stock" shall mean the Common Stock, par value $0.01
per share, of the Company.
(d) "Exercise Period" shall mean the period commencing on the
Effective Date and ending at 5:00 p.m., Pacific Standard Time, on October 29,
2004.
(e) "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 national market system, the average closing price (last trade) of
Common Stock for the ten (10) trading day period 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
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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.
(f) "Holder" shall mean each person or entity who 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 NBC Internet, Inc.
(g) "Warrant Price" shall mean $_____per share of Warrant Stock,
subject to adjustment as described in Section 4 below.
(h) "Warrant Stock" shall mean 200,000 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. This Warrant,
to the extent exercised, 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 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
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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, 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
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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 accept such offer within such thirty (30) day period, the Company shall
duly execute and delivery 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 therefor, 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 Articles
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
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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 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 Articles 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
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of Warrant Stock upon the full exercise of this Warrant. Issuance of this
Warrant shall constitute 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 State of California, 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 State of California.
(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: March 22, 2001
HEALTHGATE DATE CORP.
By:________________________________
Title:_____________________________
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Attachment 1
NOTICE OF EXERCISE
TO: HEALTHGATE DATA CORP.
1. The undersigned hereby elects to purchase shares of the Common
Stock, par value $0.01 per share, of HealthGate Data Corp. pursuant to the terms
of the attached Warrant, and tenders herewith payment of the purchase price in
full, together with all applicable transfer taxes, if any.
2. Please issue a certificate or certificates representing said
shares of Common Stock in the name of the undersigned or in such other name as
is specified below:
________________________________________
(Name)
________________________________________
(Address)
________________________________ ___________________________________________
(Date) (Name of Warrant Holder)
By:____________________________________________
Title:_________________________________________
(Title and signature of authorized person)
Attachment 2
NOTICE OF CONVERSION
TO: HEALTHGATE DATA CORP.
1. The undersigned hereby elects to acquire __________________ shares
of the Common Stock, par value $0.01 per share, of HealthGate Data Corp.
pursuant to the terms of the attached Warrant, by conversion of __________
percent (__%) of the Warrant.
2. Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:
________________________________________
(Name)
________________________________________
(Address)
________________________________ ___________________________________________
(Date) (Name of Warrant Holder)
By:____________________________________________
Title:_________________________________________
(Title and signature of authorized person)
Attachment 3
INVESTMENT REPRESENTATION STATEMENT
Shares of Common Stock
(as defined in the attached Warrant) of
HEALTHGATE DATA CORP.
In connection with the purchase of the above-listed securities, the undersigned
hereby represents to HealthGate Data Corp. (the "Company") as follows:
(a) The securities to be received upon the exercise of the Warrant (the
"Securities") will be acquired for investment for its own account, not as a
nominee or agent, and not with a view to the sale or distribution of any part
thereof, and the undersigned has no present intention of selling, granting
participation in or otherwise distributing the same, but subject, nevertheless,
to any requirement of law that the disposition of its property shall at all
times be within its control.
(b) The undersigned understands that the Securities issuable upon
exercise of the Warrant at the time of issuance may not be registered under the
Securities Act of 1933, as amended (the "Act"), and applicable state securities
laws, on the ground that the issuance of such securities is exempt pursuant to
Section 4(2) of the Act and state law exemptions relating to offers and sales
not by means of a public offering, and that the Company's reliance on such
exemptions is predicated on the undersigned's representations set forth herein.
(c) The undersigned agrees that in no event will it make a disposition
of any Securities acquired upon the exercise of the Warrant unless and until (i)
it shall have notified the Company of the proposed disposition and shall have
furnished the Company with a statement of the circumstances surrounding the
proposed disposition, and (ii) it shall have furnished the Company with an
opinion of counsel reasonably satisfactory to the Company and Company's counsel
to the effect that (A) appropriate action necessary for compliance with the Act
and any applicable state securities laws has been taken or an exemption from the
registration requirements of the Act and such laws is available, and (B) the
proposed transfer will not violate any of said laws.
(d) The undersigned acknowledges that an investment in the Company is
highly speculative and represents that it is able to fend for itself in the
transactions contemplated by this Statement, has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of its investments, and has the ability to bear the economic risks
(including the risk of a total loss) of its investment. The undersigned
represents that it has had the opportunity to ask questions of the Company
concerning the Company's business and assets and to obtain any additional
information which it considered necessary, and has had all questions which have
been asked by it satisfactorily answered by the Company.
(e) The undersigned acknowledges that the Securities issuable upon
exercise of the Warrant must be held indefinitely unless subsequently registered
under the Act or an exemption
from such registration is available. The undersigned is aware of the provisions
of Rule 144 promulgated under the Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the shares, the availability of certain current public information about the
Company, the resale occurring not less than one (1) year after a party has
purchased and paid for the security to be sold, the sale being through a
"broker's transaction" or in transactions directly with a "market makers" (as
provided by Rule 144(f)) and the number of shares being sold during any
three-month period not exceeding specified limitations.
Dated:__________________________
__________________________________________
(Typed or Printed Name)
By:_______________________________________
(Signature)
Title:____________________________________
