EXHIBIT 10.28
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT, dated as of January 29, 1999
(this "AGREEMENT"), by and between OnHealth Network Company, a Washington
corporation (the "COMPANY"), with headquarters located at 000 Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxxx 00000, and the purchaser set forth on the
Signature Page to this Agreement (the "BUYER").
WITNESSETH
WHEREAS, the Buyer wishes to purchase, upon the terms and
subject to the conditions of this Agreement, shares of the Company's Common
Stock par value $.01 per share (the "SHARES"); and
WHEREAS, the Company and the Buyer are executing and
delivering this Agreement in reliance upon the exemption from securities
registration afforded by Rule 506 of Regulation D as promulgated by the SEC
under the 1933 Act;
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. AGREEMENT TO SUBSCRIBE; PURCHASE PRICE.
(a) SUBSCRIPTION The Buyer hereby agrees to purchase from the
Company that number of Shares set forth on the Signature Page of this Agreement.
The purchase price per Share shall be $5.50 (the "PER SHARE PURCHASE PRICE").
(b) FORM OF PAYMENT. At the Closing (as defined in Section 5)
(1) the Buyer shall pay the Company, by wire transfer of immediately available
funds to such account as specified by the Company to the Buyer that amount equal
to the number of Shares purchased by the Buyer multiplied by the Per Share
Purchase Price, and (2) Company shall agree to deliver certificates representing
the Shares within three days of the Closing.
2. BUYER REPRESENTATIONS, WARRANTIES, ETC.
The Buyer represents and warrants to, and covenants and agrees
with, the Company as follows:
(a) PURCHASE FOR INVESTMENT. The Buyer is purchasing the
Shares for its own account for investment only and not with a view towards the
public sale or distribution thereof.
(b) ACCREDITED INVESTOR. The Buyer is an "ACCREDITED INVESTOR"
as that term is defined in Rule 501 of the General Rules and Regulations under
the 1933 Act by reason of Rule 501(a)(3);
(c) REOFFERS AND RESALES. All subsequent offers and sales of
the Shares by the Buyer shall be made pursuant to registration of the Shares
being offered and sold under the 1933 Act or pursuant to an exemption from
registration;
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(d) COMPANY RELIANCE. The Buyer understands that the Shares
are being offered and sold in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that the Company is relying upon the truth and accuracy of, and the Buyer's
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of the Buyer to acquire the
Shares;
(e) INFORMATION PROVIDED. The Buyer and its advisors, if any,
have been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the
Shares which have been requested by the Buyer; the Buyer and its advisors, if
any, have been afforded the opportunity to ask questions of the Company and have
received satisfactory answers to any such inquiries; without limiting the
generality of the foregoing, the Buyer has had the opportunity to obtain and to
review the Company's: (1) annual report on Form 10-K for the year ended December
31, 1997 (the "1997 10-K"), (2) Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1998, June 30, 1998, and September 30, 1998, (3)
definitive proxy statement for its 1998 Annual Meeting of Shareholders (to the
extent incorporated by reference in the 1997 10-K), and (4) the Company's form
S-3 Registration Statement filed December 30, 1998 (SEC 1933 Act Number
333-69989), in each case as filed with the SEC (the "SEC REPORTS"); and the
Buyer understands that its investment in the Securities involves a high degree
of risk;
(f) ABSENCE OF APPROVALS. The Buyer understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities; and
(g) SUBSCRIPTION AGREEMENT The Buyer has all requisite power
and authority, corporate or otherwise, to execute, deliver and perform its
obligations under this Agreement and the other agreements executed or to be
executed by the Buyer in connection herewith and to consummate the transactions
contemplated hereby and thereby. This Agreement has been duly and validly
authorized, executed and delivered on behalf of the Buyer and is a valid and
binding agreement of the Buyer enforceable in accordance with its terms, subject
as to enforceability to general principles of equity and to bankruptcy,
insolvency, moratorium and other similar laws affecting the enforcement of
creditors' rights generally.
3. COMPANY REPRESENTATIONS, WARRANTIES, ETC.
Except as set forth in a document of even date hereof (the
"COMPANY DISCLOSURE SCHEDULE"), the Company represents and warrants to, and
covenants and agrees with, the Buyer that:
(a) ORGANIZATION AND AUTHORITY The Company is a corporation
duly organized and validly existing under the laws of its jurisdiction of
incorporation, and has all requisite corporate power and authority to (i) own,
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lease and operate its properties and to carry on its business as described in
the SEC Reports and as now being conducted, and (ii) to execute, deliver and
perform its obligations under this Agreement and a Registration Rights Agreement
to be delivered at the Closing (the "REGISTRATION RIGHTS AGREEMENT"), and to
consummate the transactions contemplated hereby and thereby.
(b) CAPITALIZATION The authorized capital stock of the Company
consists of (i) 29,000,000 shares of Common Stock of which 12,981,652 shares of
Common Stock were outstanding on January 25, 1999, all of which are fully paid
and nonassessable; and (ii) 1,000,000 shares of Preferred Stock, $.01 par value,
of which 5,800 shares are designated as Series B Preferred Stock, of which no
shares are outstanding; and as of the Closing there will be no material increase
from January 25, 1999 in the number of shares of Common Stock outstanding. As of
January 25, 1999, the Company had outstanding options, warrants and similar
rights entitling the holders to purchase 3,595,628 shares of Common Stock. Other
than as set forth in the preceding sentence, the Company does not have
outstanding any material amount of securities (or obligations to issue any such
securities) convertible into, exchangeable for or otherwise entitling the
holders thereof to acquire shares of Common Stock, except as disclosed in the
SEC Reports. The Company has duly reserved from its authorized and unissued
shares of Common Stock the full number of shares required for (y) all options,
warrants, convertible securities and other rights to acquire shares of Common
Stock which are outstanding and (z) all shares of Common Stock and options and
other rights to acquire shares of Common Stock which may be issued or granted
under the stock option and similar plans which have been adopted by the Company.
(c) AUTHORIZATION. The Shares have been duly authorized. There
are no preemptive or similar rights of any shareholder of the Company or any
other Person to acquire any of the Shares. The Company and the Shares meet the
criteria for continued listing and trading on the Nasdaq SmallCap Market
("NASDAQ SmallCap"); the Company has not been notified since January 1, 1999 by
the Nasdaq SmallCap of any failure or potential failure to meet the criteria for
continued listing and trading on the Nasdaq SmallCap and no suspension of
trading in the Common Stock is in effect. Subject to compliance, if required,
with Rule 4310(c)(25)(H) of the Nasdaq SmallCap, the Company knows of no reason
that the Shares will not be eligible for listing on the Nasdaq SmallCap. For
purposes of this Agreement, "PERSON" means an individual, partnership,
corporation, limited liability company, trust, incorporated organization,
unincorporated association or joint stock company.
(d) SUBSCRIPTION AGREEMENT; REGISTRATION RIGHTS AGREEMENT.
This Agreement, and the Registration Rights Agreement have been duly and validly
authorized by the Company, this Agreement has been duly executed and delivered
by the Company and this Agreement is, and the Registration Rights Agreement,
when executed and delivered by the Company, will be, valid and binding
obligations of the Company enforceable in accordance with their respective
terms, subject as to enforceability to general principles of equity and to
bankruptcy, insolvency, moratorium and other similar laws affecting the
enforcement of creditors' rights generally.
(e) NON-CONTRAVENTION. The execution and delivery by the
Company of this Agreement and the other documents contemplated by this Agreement
and the consummation by the Company of the issuance of the Shares as
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contemplated by this Agreement, and the other transactions contemplated by this
Agreement and the Registration Rights Agreement do not and will not, with or
without the giving of notice or the lapse of time, or both (i) result in any
violation of any terms of the Articles of Incorporation or by-laws of the
Company, (ii) conflict with or result in a breach by the Company of any of the
terms or provisions of, or constitute a default under, or result in the
modification, amendment, termination or cancellation of, result in the
acceleration of any obligation of the Company under, or result in the creation
or imposition of any lien, security interest, charge or encumbrance upon any of
the properties or assets of the Company pursuant to, any indenture, mortgage,
deed of trust or other agreement or instrument to which the Company is a party
or by which the Company or any of its respective properties or assets is bound
or affected, (iii) violate or contravene any applicable law, rule or regulation
or any applicable decree, judgment or order of any court, United States federal
or state regulatory body, administrative agency or other governmental body
having jurisdiction over the Company or any of its respective properties or
assets or (iv) have any material adverse effect on any permit, certification,
registration, approval, consent, license or franchise necessary for the Company
to own or lease and operate any of their respective properties or to conduct any
of their respective businesses or the ability of the Company to make use
thereof.
(f) APPROVALS. No authorization, approval or consent of, or
filing with, any court, governmental body, regulatory agency, self-regulatory
organization, or stock exchange or market or the shareholders of the Company is
required to be obtained or made by the Company for (1) the execution, delivery
and performance by the Company of this Agreement and the Registration Rights
Agreement, and (2) the issuance and sale of the Shares as contemplated by this
Agreement other than (w) the listing of the Shares on the Nasdaq SmallCap, (x)
registration of the resale of the Shares under the 1933 Act as contemplated by
the Registration Rights Agreement, and (y) filing of one or more Forms D with
respect to the Shares as required under Regulation D of the Securities Act of
1933 and related filings under applicable state securities laws.
(g) INFORMATION PROVIDED. The information provided by or on
behalf of the Company to the Buyer in connection with the transactions
contemplated by this Agreement, including, without limitation, the information
referred to in Section 2(e) of this Agreement, does not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they are made, not misleading, it being understood that, for purposes of
this Section 3(g), any statement contained in such information shall be deemed
to be modified or superseded for purposes of this Section 3(g) to the extent
that a statement in any document included in such information which was prepared
or filed with the SEC on a later date modifies or replaces such statement,
whether or not such later prepared or filed statement so states. The Company has
not filed any reports with the SEC under the 1934 Act since December 31, 1998.
(h) ABSENCE OF CERTAIN CHANGES. Except as disclosed in the SEC
Reports, since December 31, 1997, there has been no material adverse change and
no material adverse development in the business, properties, operations,
condition (financial or other), results of operations or prospects of the
Company. Except as and to the extent disclosed, reflected or reserved against in
the financial statements of the Company and the notes thereto included in the
SEC Reports, the Company has no material (individually or in the aggregate)
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liabilities, debts or obligations whether accrued, absolute, contingent or
otherwise, and whether due or to become due. Since December 31, 1997, the
Company has not incurred any liabilities, debts or obligations of any nature
whatsoever which are individually or in the aggregate material to the Company,
other than those incurred in the ordinary course of their respective businesses
or disclosed in the SEC Reports.
(i) ABSENCE OF CERTAIN PROCEEDINGS. Except as described in the
SEC Reports, there is no action pending or, to the knowledge of the Company,
threatened against the Company, in any such case likely to have a material
adverse effect on the business, properties, condition (financial or other),
results of operations or prospects of the Company or the transactions
contemplated by this Agreement or any of the documents contemplated hereby or
which would adversely affect the validity or enforceability of, or the authority
or ability of the Company to perform its obligations under, this Agreement or
any of such other documents; neither the Company nor any director or officer
thereof is or has been the subject of any action involving (i) a claim of
violation of or liability under federal or state securities laws or (ii) a claim
of breach of fiduciary duty. The Company does not have pending before the SEC
any request for confidential treatment of information and to the best of the
Company's knowledge no such request will be made by the Company prior to the
time the Registration Statement relating to the Shares which is contemplated by
the Registration Rights Agreement is first ordered effective by the SEC; and
there has not been, and the Company has not been notified of any pending or
contemplated any investigation by the SEC involving the Company or any current
or former director or officer of the Company.
(j) SEC FILINGS. The Company has timely filed all required
forms, reports and other documents required to be filed with the SEC under the
1934 Act. All of such forms, reports and other documents complied, when filed,
in all material respects, with all applicable requirements of the 1933 Act and
the 1934 Act.
4. CERTAIN COVENANTS AND ACKNOWLEDGEMENTS.
(a) TRANSFER RESTRICTIONS. The Company and the Buyer
acknowledge and agree that (1) the Shares have not been and are not being
registered for resale under the 1933 Act (other than as provided in the
Registration Rights Agreement), and the Securities may not be transferred unless
(A) subsequently registered for resale thereunder or (B) the Buyer shall have
delivered to the Company an opinion of counsel, reasonably satisfactory in form,
scope and substance to the Company, to the effect that the Shares to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration and (2) any resale of the Shares made in reliance on Rule 144
promulgated under the 1933 Act may be made only in accordance with the terms of
Rule 144 and further, if Rule 144 is not applicable, any such resale of Shares
under circumstances in which the seller, or the person through whom the sale is
made, may be deemed to be an underwriter, as that term is used in the 1933 Act,
may require compliance with some other exemption under the 1933 Act or the rules
and regulations of the SEC thereunder.
(c) RESTRICTIVE LEGEND.
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The Buyer further acknowledges and agrees that until such time
as the Shares have been registered for resale under the 1933 Act as contemplated
by the Registration Rights Agreement and such registration statement has been
declared effective by the Securities and Exchange Commission, the certificates
for the Shares may bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of the certificates
for the Shares):
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended. The securities have been
acquired for investment and may not be resold, transferred or assigned
in the absence of an effective registration statement for the
securities under the Securities Act of 1933, as amended, or an opinion
of counsel reasonably acceptable to the Company that registration is
not required under said Act.
(c) REGISTRATION RIGHTS AGREEMENT. On or before the Closing
Date, the parties hereto agree to enter into the Registration Rights Agreement
in the form attached hereto as ANNEX I.
(d) FORM D. The Company agrees to file a Form D with respect
to the Shares as required under Regulation D and to provide a copy thereof to
the Buyer promptly after such filing. The Buyer agrees to cooperate with the
Company in connection with such filing and, upon request of the Company, to
provide all information relating to the Buyer reasonably required for such
filing.
(e) AUTHORIZATION FOR TRADING; REPORTING STATUS. Within ten
business days after the Closing, the Company shall file a notification for
listing of additional shares with the Nasdaq SmallCap relating to the Shares and
provide evidence of such filing to the Buyer. So long as the Buyer beneficially
owns any of the Shares, the Company shall file all reports required to be filed
with the SEC pursuant to Section 13 or 15(d) of the 1934 Act and the Company
shall not voluntarily terminate its status as an issuer required to file reports
under the 1934 Act even if the 1934 Act or the rules and regulations thereunder
would permit such termination.
(f) BLUE SKY LAWS. The Company shall take such action as and
to the extent it shall be necessary or required to qualify, or to obtain an
exemption for, the Shares pursuant to this Agreement under such of the
securities or "blue sky" laws of jurisdictions as shall be applicable to the
sale of the Shares pursuant to this Agreement. The Company shall furnish copies
of all filings, applications, orders and grants or confirmations of exemptions
relating to such securities or "blue sky" laws.
(g) CERTAIN EXPENSES Whether or not any closing occurs, the
Company shall pay or reimburse the Buyer for all reasonable expenses (including,
without limitation, legal fees and expenses of counsel to the Buyer) incurred by
the Buyer, not in excess of $3,000, in connection with this Agreement and the
transactions contemplated hereby.
(h) CERTAIN TRADING RESTRICTIONS. The Buyer agrees that on the
Closing Date it will have no short position in the Common Stock. So long as the
Company is in compliance in all material respects with its obligations to the
Buyer under this Agreement and the Registration Rights Agreement, the Buyer
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agrees that (1) from the Closing Date until the SEC Effective Date (as defined
in the Registration Rights Agreement), it will not sell or contract to sell any
shares of Common Stock or engage in any short sales or other hedging
transactions relating to the Common Stock, (2) during the period from the SEC
Effective Date to the date on which the Buyer no longer owns any Common Shares,
the Buyer shall not engage in short sales or other hedging transactions relating
to the Common Stock.
(i) BEST EFFORTS. Each of the parties shall use its
commercially reasonably best efforts timely to satisfy each of the conditions to
the other party's obligations to sell and purchase the Shares set forth in
Section 6 or 7, as the case may be, of this Agreement on or before the Closing
Date.
5. CLOSING.
Subject to the satisfaction or waiver of the conditions set
forth in Sections 6 and 7, the Closing shall take place shall be 12:00 noon,
Seattle, Washington time (the "CLOSING"), on or before the date which is three
Business Days after the date of this Agreement, or such other mutually agreed to
time. The closing of such sale of the Shares shall occur on the Closing Date at
the offices of Xxxxxxx Xxxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx,
Xxxxxxxxxx 00000.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL AND ISSUE.
The Buyer understands that the Company's obligation to sell
the Shares to the Buyer pursuant to this Agreement at the Closing is conditioned
upon the satisfaction of the following conditions precedent on or before the
Closing (any or all of which may be waived by the Company in its sole
discretion):
(a) Delivery by the Buyer to the Company of good funds as
payment in full of an amount equal to the Per Share Purchase Price for each of
the Shares;
(b) The accuracy on the Closing Date of the representations
and warranties of the Buyer contained in this Agreement as if made on the
Closing Date and the performance by the Buyer on or before the Closing Date of
all covenants and agreements of the Buyer required to be performed on or before
the Closing Date; and
(c) On the Closing Date, no legal action, suit or proceeding
shall be pending or threatened which seeks to restrain or prohibit the
transactions contemplated by this Agreement.
7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The Company understands that the Buyer's obligation to
purchase the Shares from the Company pursuant to this Agreement at the Closing
is conditioned upon the satisfaction of the following conditions precedent on or
before the Closing (any or all of which may be waived by the Buyer in its sole
discretion):
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(a) Delivery by the Company of the certificates for the Shares
for the account of the Buyer in accordance with this Agreement (such delivery,
the parties agree, may be up to three days after the Closing);
(b) The accuracy on the Closing Date of the representations
and warranties of the Company contained in this Agreement as if made on the
Closing Date and the performance by the Company on or before the Closing Date of
all covenants and agreements of the Company required to be performed on or
before the Closing Date and receipt by the Buyer of a certificate, dated the
Closing Date, of the Chief Executive Officer or the Chief Financial Officer of
the Company confirming such matters and such other matters as the Buyer may
reasonably request;
(c) The receipt by the Buyer of a certificate, dated the
Closing Date, of the Secretary of the Company certifying (1) the Articles of
Incorporation and By-Laws of the Company as in effect on the Closing Date, (2)
all resolutions of the Board of Directors (and committees thereof) of the
Company relating to this Agreement and the transactions contemplated hereby and
(3) such other matters as reasonably requested by the Buyer;
(e) The parties shall have executed a Registration Rights
Agreement in the form attached hereto as ANNEX I;
(f) The Company and the Company's transfer agent shall have
executed an Order to Issue and Register substantially in the form attached
hereto as Annex II.
(g) Receipt by the Buyer on the Closing Date of an opinion of
Xxxxxxx Xxxxx & Xxxxx LLP, counsel for the Company, dated the Closing Date, in
form, scope and substance reasonably satisfactory to the Buyer;
(h) The Buyer shall have received a Certificate of the
Company's transfer agent dated as of the Closing substantially in the form
attached hereto as Annex III; and
(i) On the Closing Date, no legal action, suit or proceeding
shall be pending or threatened which seeks to restrain or prohibit the
transactions contemplated by this Agreement.
8. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of Washington.
(b) COUNTERPARTS. This Agreement may be executed in
counterparts and by the parties hereto on separate counterparts, all of which
together shall constitute one and the same instrument. A facsimile transmission
of this Agreement bearing a signature on behalf of a party hereto shall be legal
and binding on such party. Although this Agreement is dated as of the date first
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set forth above, the actual date of execution and delivery of this Agreement by
each party is the date set forth below such party's signature on the signature
page hereof. Any reference in this Agreement or in any of the documents executed
and delivered by the parties hereto in connection herewith to (1) the date of
execution and delivery of this Agreement by the Buyer shall be deemed a
reference to the date set forth below the Buyer's signature on the signature
page hereof, (2) the date of execution and delivery of this Agreement by the
Company shall be deemed a reference to the date set forth below the Company's
signature on the signature page hereof and (3) the date of execution and
delivery of this Agreement or the date of execution and delivery of this
Agreement by the Buyer and the Company shall be deemed a reference to the later
of the dates set forth below the signatures of the parties on the signature page
hereof.
(c) HEADINGS, ETC. The headings, captions and footers of this
Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement.
(d) SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction.
(e) AMENDMENTS. No amendment, modification, waiver, discharge
or termination of any provision of this Agreement nor consent to any departure
by the Buyer or the Company therefrom shall in any event be effective unless the
same shall be in writing and signed by the party to be charged with enforcement,
and then shall be effective only in the specific instance and for the purpose
for which given. No course of dealing between the parties hereto shall operate
as an amendment of this Agreement.
(f) WAIVERS. Failure of any party to exercise any right or
remedy under this Agreement or otherwise, or delay by a party in exercising such
right or remedy, or any course of dealings between the parties, shall not
operate as a waiver thereof or an amendment hereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or exercise of any other right or power.
(g) NOTICES. Any notices required or permitted to be given
under the terms of this Agreement shall be delivered personally (which shall
include telephone line facsimile transmission with answer back confirmation) or
by courier and shall be effective upon receipt, if delivered personally or by
courier, in the case of the Company addressed to the Company at its address
shown in the introductory paragraph of this Agreement, Attention: Chief
Financial Officer (telephone line facsimile transmission number (000) 000-0000),
or, in the case of the Buyer, at its address or telephone line facsimile
transmission number shown on the signature page of this Agreement, with a copy
to Xxxxxxx Xxxxxx; Xxxxxxx Xxxxxxx & Xxxxxxxx LLP, Xxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx, 00000 (telephone line facsimile transmission number (000) 000-0000)
or such other address or telephone line facsimile transmission number as a party
shall have provided by notice to the other party in accordance with this
provision.
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(h) ASSIGNMENT. No party to this Agreement may assign, by
operation of law or otherwise, all or any portion of its rights, obligations, or
liabilities under this Agreement without the prior written consent of the
Company.
(i) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The respective
representations, warranties, covenants and agreements of the Buyer and the
Company contained in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement shall survive the delivery of payment
for the Shares and shall remain in full force and effect regardless of any
investigation made by or on behalf of them or any Person controlling or advising
any of them.
(j) ENTIRE AGREEMENT. This Agreement and the Registration
Rights Agreement set forth the entire agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior agreements and
understandings, whether written or oral, with respect thereto.
(k) TERMINATION. The Buyer shall have the right to terminate
this Agreement by giving notice to the Company at any time at or prior to the
Closing Date if:
(1) the Company shall have failed, refused, or been unable at
or prior to the date of such termination of this Agreement to perform
any of its obligations hereunder;
(2) any other condition of the Buyer's obligations
hereunder is not fulfilled; or
(3) the closing of the sale of the Shares shall not have
occurred on or before February 5, 1999, other than solely by reason of
a breach of this Agreement by the Buyer.
Any such termination shall be effective upon the giving of notice thereof by the
Buyer. Upon such termination, the Buyer shall have no further obligation to the
Company hereunder and the Company shall remain liable for any breach of this
Agreement or the other documents contemplated hereby which occurred on or prior
to the date of such termination.
(l) FURTHER ASSURANCES. Each party to this Agreement will
perform any and all acts and execute any and all documents as may be necessary
and proper under the circumstances in order to accomplish the intents and
purposes of this Agreement and to carry out its provisions.
(m) PUBLIC STATEMENTS, PRESS RELEASES, ETC. The Company and
the Buyer shall have the right to approve before issuance any press releases or
any other public statements with respect to the transactions contemplated
hereby; PROVIDED, HOWEVER, that the Company shall be entitled, without the prior
approval of the Buyer, to make any press release or other public disclosure with
respect to such transactions as is required by applicable law and regulations
(although the Buyer shall be consulted by the Company in connection with any
such press release or other public disclosure prior to its release).
(n) CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be
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applied against any party.
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SUBSCRIPTION AGREEMENT--SIGNATURE PAGE
IN WITNESS WHEREOF, this Agreement has been duly executed by the Buyer
and the Company by their respective officers or other representatives thereunto
duly authorized on the respective dates set forth below.
BUYERS
Name Xxxxxx X. Xxxxxx as Trustee UDT dated 3/13/85
Number of Shares 100,000
Name UMBTRU
Number of Shares 2,000,000
Name Xxxxx Xxxxxx
Number of Shares 46,000
Name Xxxxx X. Xxxxx
Number of Shares 50,000
Name Xxxxx X. Xxxxxxxxxx
Number of Shares 200,000
Name Xxx X. Xxxxx
Number of Shares 200,000
ONHEALTH NETWORK COMPANY
By: \s\ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
Date: January 29, 1999
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ANNEX II
OnHealth Network Company
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
January 29, 1999
American Stock Transfer and Trust Company
RE: ORDER TO ISSUE AND REGISTER
Ladies and Gentlemen:
The Board of Directors of OnHealth Network Company, a Washington
corporation (the "Company"), has authorized the issuance and sale of 2,596,000
shares of the Company's Common Stock (the "Common Stock"), pursuant to the
Subscription Agreement, dated January 29, 1999 (the "Subscription Agreement")
between the Company and UMBTRU, Xxxxxx X. Xxxxxx as Trustee UDT dated 3/13/85,
Xxxxx X. Xxxxx, Xxxxx Xxxxxx, Xxxxx X. Xxxxxxxxxx, and Xxx X. Xxxxx (the
"Purchasers"). The Company is selling 2,596,000 shares of its Common Stock to
the Purchasers. You are, therefore, hereby authorized and requested, as Transfer
Agent and Registrar of the Company's Common Stock: (i) to issue and register for
original issuance 2,596,000 shares of the Company's Common Stock in the names
and amounts set forth on the attached Exhibit A, and (ii) to cause certificates
representing such shares of Common Stock to the Purchasers to be delivered to
the Purchasers at the addresses set forth on the attached Exhibit A
Attached please find a copy of the opinion of Xxxxxxx Xxxxx & Xxxxx LLP
regarding the due authorization of the Common Stock issuable pursuant to the
Subscription Agreement.
Very truly yours,
ON HEALTH NETWORK COMPANY
--------------------------
Xxxxxxx X. Xxxxxx
Vice President
ACCEPTED AND AGREED:
American Stock Transfer and Trust Company
By
-------------------------------------
Print Name:
---------------------------
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EXHIBIT A
LIST OF PURCHASERS
Name Xxxxxx X. Xxxxxx as Trustee UDT dated 3/13/85
Number of Shares 100,000
Send Shares to #1 Below
Name UMBTRU
Number of Shares 2,000,000
Send Shares to #1 Below
Name Xxxxx Xxxxxx
Number of Shares 46,000
Send Shares to #1 Below
Name Xxxxx X. Xxxxx
Number of Shares 50,000
Send Shares to #1 Below
Name Xxxxx X. Xxxxxxxxxx
Number of Shares 200,000
Send Shares to #2 Below
Name Xxx X. Xxxxx
Number of Shares 200,000
Send Shares to #2 Below
#1
Xxxxxxx, Phleger & Xxxxxxxx LLP
Xxx Xxxxxx, Xxxxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
#2
Xxxxxxx Shchwab & Co
Institutional Service Group
0000 Xxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxx
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ANNEX III
OnHealth Network Company
CERTIFICATE OF TRANSFER AGENT AND REGISTRAR
American Stock Transfer and Trust Company (the "Agent") does hereby
certify that:
1. The Agent is duly appointed and authorized to act as Transfer Agent
and Registrar for the Common Stock, par value $0.01 per share (the "Common
Stock"), of OnHealth Network Company, a Washington corporation (the "Company").
2. The Agent, as Transfer Agent and Registrar, pursuant to written
instructions from the Company, has duly issued, countersigned and registered
certificates evidencing an aggregate of 2,596,000 shares of Common Stock of the
Company as an original issue by the Company, in the names and denominations
previously requested by ______________________________,
______________________________, ______________________________, and
______________________________ (the "Purchasers") as set forth on the
Subscription Agreement, dated as of
January 29, 1999, by and between the Company and the Representative.
3. Such certificates were signed by duly authorized officers of the
Company by their facsimile signatures and countersigned and registered on behalf
of the Agent, as Transfer Agent and Registrar, by a representative of the Agent,
who, at the time of affixing his or her signature, was and still is duly
authorized to countersign and register said certificates.
4. The Agent is duly and validly registered as a "Transfer Agent" in
accordance with Section 17A(c) of the Securities Exchange Act of 1934, as
amended.
5. There are a total of __________ shares of Common Stock of the
Company issued and outstanding as of this date, after giving effect to the
action described in paragraph 2 above.
IN WITNESS WHEREOF, the Agent has caused this Certificate to be
executed by a duly authorized officer on its behalf on January 29, 1999.
American Stock Transfer & Trust Company
By: ________________________________
Name:
Title:
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