EXHIBIT 10.58
WEBMD, INC.
REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of the 13th day of January, 1999, among WebMD, Inc., a Georgia
corporation (the "Company"), and the persons listed on Exhibit A hereto (the
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"Purchasers"), as such Exhibit may be amended from time to time.
RECITALS:
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A. The Purchasers are the purchasers of the Company's Series B
Convertible Preferred Stock (the "Series B Preferred Stock") pursuant to a Stock
Purchase Agreement dated as of January 13, 1999 among the Purchasers and the
Company, as such may be amended from time to time (the "Stock Purchase
Agreement").
B. It is anticipated that future sales of Series B Preferred Stock may
occur.
C. The Company and the Purchasers desire to set forth the registration
rights to be granted to parties to the Stock Purchase Agreement.
AGREEMENT:
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NOW, THEREFORE, in consideration of the mutual promises, representations,
warranties, covenants, and conditions set forth herein and in the Stock Purchase
Agreement, the parties mutually agree as follows:
1. Certain Definitions. As used in this Agreement, the following terms
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shall have the following respective meanings:
"Commission" shall mean the Securities and Exchange Commission or any other
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federal agency at the time administering the Securities Act.
"Common Stock" shall mean the voting common stock, without designation as
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to series and without par value per share, of the Company.
"Holder" shall mean any holder of outstanding Registrable Securities or
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Shares.
"Initial Public Offering" means the offer and sale of shares of Common
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Stock in a transaction underwritten by an investment banking firm following the
completion of which (i) the Common Stock will be listed for trading on any
national securities exchange or (ii) there will be at least two market makers
who are making a market in the Common Stock through the Nasdaq National Market
System.
"Initiating Holders" shall mean any Holder or Holders of not less than 50%
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of the then outstanding Registrable Securities.
The terms "register", "registered" and "registration" refer to a
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registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
"Registrable Securities" means shares of Common Stock (i) issued pursuant
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to the conversion or exercise of the Shares, or (ii) issued as a dividend or
other distribution with respect to, or in exchange or in replacement of, the
Shares or such Common Stock, excluding in all cases, however (including
exclusion from the calculation of the number of outstanding Registrable
Securities), any Registrable Securities sold by a person in a transaction,
including a transaction pursuant to a registration statement under Section 2 or
Section 3 or a transaction pursuant to Rule 144 of the Securities Act, in which
such person's rights under Section 2 or Section 3 are not transferred.
"Securities Act" shall mean the Securities Act of 1933, as amended, or any
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similar federal statute promulgated in replacement thereof, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.
"Securities" shall mean the Shares and any securities issued in respect
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thereto or upon conversion thereof.
"Shares" shall mean the Series B Preferred Stock of the Company purchased
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pursuant to the Stock Purchase Agreement.
2. Demand Registration. In case the Company shall receive from Initiating
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Holders a written request that the Company effect a registration with respect to
at least 200,000 shares of Common Stock that constitute Registrable Securities
(as adjusted for stock splits, stock dividends, recapitalizations and similar
events) the Company will:
(a) promptly give written notice of the proposed registration to all other
Holders so they may have an opportunity to consider joining in such
registration, which they may do (subject to the terms and provisions of this
Agreement) at their election within ten (10) days after receipt of the notice of
the proposed registration by the Company; and
(b) as soon as practicable, use its reasonable best efforts to effect such
registration (including, without limitation, the execution of an undertaking to
file post-effective amendments, appropriate qualification under applicable blue
sky or other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any Holder or Holders joining in
such request as are specified in a written request given within ten (10) days
after receipt of notice from the Company pursuant to Section 2(a); provided that
the Company shall not be obligated to take any action to effect any such
registration, qualification or compliance pursuant to this Section 2:
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(i) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act;
(ii) Prior to the date which is one (1) year following the
effective date of the registration statement relating to an Initial Public
Offering;
(iii) Within the one hundred twenty (120) day period immediately
following the effective date of a registration statement pertaining to a public
offering of Common Stock for its own account or for the account of another
shareholder of the Company who has exercised a demand right to register shares
of Common Stock (other than a registration relating solely to a Commission Rule
145 transaction or a registration relating solely to employee benefit plans);
(iv) After the Company has effected one (1) registration pursuant
to this Section 2 and such registration has been declared or ordered effective;
or
(v) If the Company furnishes to the Initiating Holders a letter
signed by the Chief Executive Officer or the President of the Company stating
that the Company intends to file a registration statement in connection with a
bona fide firm commitment underwritten registration for securities to be offered
for its own account (the "Intended Registration"); provided, however, that if
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the Company does not file with the Commission its Intended Registration within
ninety (90) days of the request of the Initiating Holders, the Company shall
file the requested registration statement within thirty (30) days of the
termination of such ninety (90) day period.
Subject to the foregoing clauses (i) through (v), the Company shall
file a registration statement covering the Registrable Securities so requested
to be registered as soon as practicable after receipt of the request of the
Initiating Holders.
(c) Underwriting. The sale of Registrable Securities pursuant to this
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Section 2 must be made by means of a firm commitment underwriting through
underwriters who are reasonably acceptable to the Company and the holders of a
majority of the Registrable Securities that are proposed to be distributed
through such underwriting. The right of any Holder to registration pursuant to
this Section 2 shall be conditioned upon such Holder's participation in such
underwriting and the inclusion of such Holder's Registrable Securities in the
underwriting to the extent requested by such Holder (unless mutually otherwise
agreed by a majority in interest of the Holders and such Holder) to the extent
provided herein.
The Company and all Holders proposing to distribute Registrable Securities
through such underwriting shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting. Notwithstanding any other provision of this Section 2(c), if the
underwriter determines that marketing factors require a limitation of the number
of shares to be underwritten and so advises the Initiating Holders in writing,
then the Initiating Holders shall so advise the Company and all Holders (except
those Holders who have
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indicated to the Company their decision not to distribute any of their
Registrable Securities through such underwriting) and the number of Registrable
Securities that may be included in the registration and underwriting shall be
allocated first to the Holders on a pro rata basis according to the number of
Registrable Securities requested to be included by the Holders; second to the
Company; and third to other shareholders of the Company who have requested to
sell in the registration. No Registrable Securities excluded from the
underwriting by reason of the underwriter's marketing limitation shall be
included in such registration.
If any Holder disapproves of the terms of the underwriting, such person
may elect to withdraw therefrom by written notice to the Company, the
underwriter and the Initiating Holders. The Registrable Securities and/or other
securities so withdrawn from such underwriting shall also be withdrawn from such
registration; provided, however, that, if by the withdrawal of such Registrable
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Securities a greater number of Registrable Securities held by other Holders may
be included in such registration (up to the maximum of any limitation imposed by
the underwriters), then the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities in the same proportion used above in determining the
underwriter limitation.
If the underwriter has not limited the number of Registrable Securities to
be underwritten, the Company may include securities for its own account or the
account of others in such registration if the underwriter so agrees and if the
number of Registrable Securities which would otherwise have been included in
such registration and underwriting will not thereby be limited.
(d) Delay of Registration. If the Company shall furnish to the Initiating
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Holders a certificate signed by the President of the Company stating that, in
the good faith judgment of the Board of Directors of the Company, it would be
seriously detrimental to the Company and its shareholders for such registration
statement to be filed on or before the date filing would be required and it is
therefore essential to defer the filing of such registration statement, then the
Company may direct that such request for registration be delayed for a period
not in excess of ninety (90) days, such right to delay a request to be exercised
by the Company not more than twice in any one-year period.
3. Piggyback Registration.
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(a) If at any time after ninety (90) days following an Initial Public
Offering, the Company shall determine to register for sale for cash any of its
Common Stock, for its own account or for the account of others (other than the
Holders), other than a registration relating solely to employee benefit plans or
securities issued or issuable to employees or consultants (including a
registration on Form S-8), a registration relating solely to a Commission Rule
145 transaction, a registration on Form S-4 in connection with a merger,
acquisition, divestiture, reorganization or similar event or a registration on
any registration form which does not include substantially the same information
as would be required to be included in a registration statement covering the
sale of Registrable Securities, the Company promptly will give to each Holder
written notice thereof and shall use its reasonable best efforts to include in
such registration (and any related qualification under blue sky laws or other
compliance), and in any underwriting
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involved therein, all the Registrable Securities specified in a written request
or requests, made within ten (10) days after receipt of such written notice from
the Company, by any Holder or Holders. However, the Company may, without the
consent of the Holders, withdraw such registration statement prior to its
becoming effective if the Company has abandoned its proposal to register the
securities proposed to be registered thereby.
(b) Underwriting. If the registration of which the Company gives notice is
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for a registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to Section
3(a). In such event the right of any Holder to registration pursuant to Section
3(a) shall be conditioned upon such Holder's participation in such underwriting
and the inclusion of such Holder's Registrable Securities in the underwriting to
the extent provided herein. All Holders proposing to distribute their securities
through such underwriting shall (together with the Company and any other
shareholders of the Company distributing their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company.
Notwithstanding any other provision of this Section 3(b), if the underwriter or
the Company determines that marketing factors require a limitation of the number
of shares to be underwritten, the underwriter may exclude some or all
Registrable Securities from such registration and underwriting. The Company
shall so advise all Holders (except those Holders who have indicated to the
Company their decision not to distribute any of their Registrable Securities
through such underwriting), and the number of shares of Registrable Securities
that may be included in the registration and underwriting, if any, shall be
allocated among such Holders as follows:
(i) In the event of a piggyback registration pursuant to Section
3(a) that is initiated by the Company, then the number of shares that may be
included in the registration and underwriting shall be allocated first to the
Company and then to all selling shareholders, including the Holders, who have
requested to sell in the registration on a pro rata basis according to the
number of shares requested to be included; and
(ii) In the event of a piggyback registration pursuant to Section
3(a) that is initiated by the exercise of demand registration rights by a
shareholder or shareholders of the Company (other than the Holders), then the
number of shares that may be included in the registration and underwriting shall
be allocated first to such selling shareholders who exercised such demand and
then to all selling shareholders, including the Holders, who have requested to
sell in the registration, on a pro rata basis according to the number of shares
requested to be included;
provided, however, that in no event shall the total number of shares included in
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the offering by HBO & Company of Georgia ("HBOC"), Sirrom Investments, Inc.
("Sirrom"), Premiere Technologies, Inc. ("Premiere") and Matria Healthcare, Inc.
("Matria") pursuant to a piggyback registration be less than the number of
securities included in the offering by any other single selling shareholder
pursuant to piggyback registration rights unless all securities held by HBOC,
Sirrom, Premiere and Matria requested to be included in such offering are
included in such offering or unless HBOC, Sirrom, Premiere and Matria waive such
limitation or choose not to sell any shares in such registration, and the number
of shares that Holders
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would otherwise be entitled to include in such registration may be reduced to
give effect to this requirement.
(c) No Registrable Securities excluded from the underwriting by reason of
the underwriter's marketing limitation shall be included in such registration.
If any Holder disapproves of the terms of any such underwriting, such person may
elect to withdraw therefrom by written notice to the Company and the
underwriter. The Registrable Securities and/or other securities so withdrawn
from such underwriting shall also be withdrawn from such registration; provided,
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however, that, if by the withdrawal of such Registrable Securities a greater
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number of Registrable Securities held by other Holders may be included in such
registration (up to the maximum of any limitation imposed by the underwriters),
then the Company shall offer to all Holders who have included Registrable
Securities in the registration the right to include additional Registrable
Securities pursuant to the terms and limitations set forth herein in the same
proportion used above in determining the underwriter limitation.
4. Registration Procedures. In the case of each registration,
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qualification or compliance effected by the Company pursuant to Section 2 or
Section 3, the Company will keep each Holder advised in writing as to the
initiation of each registration, qualification and compliance and as to the
completion thereof. At its expense, the Company will use its reasonable best
efforts to:
(a) Keep such registration, qualification or compliance effective for a
period of ninety (90) days or until the Holder or Holders have completed the
distribution described in the registration statement relating thereto, whichever
first occurs; and
(b) Furnish such number of prospectuses and other documents incident
thereto as a Holder from time to time may reasonably request.
5. Rule 144(k). Notwithstanding anything to the contrary contained
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herein, no Holder shall have rights to a registration under Section 2 or Section
3 after the time that such Holder could sell all of its Registrable Securities
pursuant to Rule 144(k) promulgated under the 1933 Act or any successor rule
thereto.
6. Registration Expenses. The Company shall pay all expenses in
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connection with any registration, including, without limitation, all
registration, filing and NASD fees, printing expenses, all fees and expenses of
complying with securities or blue sky laws, the fees and disbursements of one
counsel for the Holders and the fees and disbursements of counsel for the
Company and of its independent accountants; provided that, in any registration,
each party shall pay for its own underwriting discounts and commissions and
transfer taxes. The Company shall not, however, be required to pay for expenses
of any registration proceeding begun pursuant to Section 2, the request of which
has been subsequently withdrawn by the Initiating Holders (unless the withdrawal
is based upon material adverse information concerning the Company of which the
Initiating Holders were unaware at the time of such request), in which case such
expenses shall be borne by the Holders whose securities were to be included in
the registration in proportion to the number of shares for which such
registration was requested.
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7. Assignment of Rights. No Holder may assign its rights under this
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Agreement to any party without the prior written consent of the Company, and any
attempted transfer in violation of this Section 7 shall be null and void;
provided, however, that a Holder may assign its rights under this Agreement
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without such prior written consent to a transferee or assignee that controls, is
controlled by or is under common control with such Holder.
8. Information by Holder. The Holder or Holders of Registrable Securities
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included in any registration shall furnish to the Company such information
regarding such Holder or Holders and the distribution proposed by such Holder or
Holders as the Company may request in writing.
9. "Market Stand-off" Agreement. Each Holder agrees not to sell or
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otherwise transfer or dispose of any Common Stock (or other securities) of the
Company held by it during the 180 day period following the effective date of the
Initial Public Offering if so requested by the Company and underwriters of
Common Stock (or other securities) of the Company. The Company may impose stop-
transfer instructions with respect to the shares (or securities) subject to the
foregoing restriction until the end of such period.
10. Indemnification.
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(a) In the event of the offer and sale of Registrable Securities held by
Holders under the 1933 Act, the Company shall, and hereby does, indemnify and
hold harmless each Holder, its directors, officers and partners and each other
Person, if any, who controls such Holder within the meaning of Section 15 of the
1933 Act, against any losses, claims, damages or liabilities, joint or several,
to which the Holder or any such director or officer or controlling person may
become subject under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement under which such shares were registered under the 1933
Act, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein in light of the circumstances in
which they were made not misleading, and the Company shall reimburse the Holder,
and each such director, officer, partner and controlling person for any legal or
any other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability, action or proceeding;
provided that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from such
registration statement, any such preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement in reliance upon and in conformity
with written information furnished to the Company through an instrument duly
executed by or on behalf of such Holder specifically stating that it is for use
in the preparation thereof. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Company, or any such
director, officer, partner or controlling person and shall survive the transfer
of such shares by the Holder.
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(b) The Company may require, as a condition to including any Registrable
Securities to be offered by a Holder in any registration statement filed
pursuant to this Section 10, that the Company shall have received an agreement
from such Holder to be bound by the terms of this Section 10, including an
undertaking reasonably satisfactory to it from such Holder, to indemnify and
hold the Company, its directors and officers and each other Person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act, against
any losses, claims, damages or liabilities, joint or several, to which the
Company or any such director or officer or controlling person may become subject
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement in or omission or alleged omission from such registration
statement, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, if such statement or
alleged statement or omission or alleged omission was made in reliance upon and
in conformity with written information about such Holder as a Holder of the
Company furnished to the Company through an instrument duly executed by such
Holder specifically stating that it is for use in the preparation of such
registration statement, preliminary prospectus, final prospectus, summary
prospectus, amendment or supplement; provided, however, that such indemnity
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agreement found in this Section 10(b) shall in no event exceed the gross
proceeds from the offering received by such Holder. Such indemnity shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Company or any such director, officer or controlling person and shall
survive the transfer by any Holder of such shares.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action or proceeding involving a claim referred to in
Section 10(a) or (b) (including any governmental action), such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the indemnifying party of the commencement of such
action; provided that the failure of any indemnified party to give notice as
provided herein shall not relieve the indemnifying party of its obligations
under Section 10(a) or (b), except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any such action is
brought against an indemnified party, unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist or the indemnified party may have defenses not
available to the indemnifying party in respect of such claim, the indemnifying
party shall be entitled to participate in and to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation. Neither an indemnified nor an indemnifying party shall be liable
for any settlement of any action or proceeding effected without its consent. No
indemnifying party shall, without the consent of the indemnified party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
litigation.
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(d) The indemnification required by Section 10(a) and (b) shall be made by
periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or expenses, losses, damages or
liabilities are incurred.
(e) If the indemnification provided for in this Section 10 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage or expense referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense as is appropriate to
reflect the relative benefits received by the indemnified party on the one hand,
and the indemnifying party on the other from the offering of the Common Stock,
as well as other relevant equitable considerations.
11. Miscellaneous
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(a) Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Georgia applicable to contracts between
Georgia residents entered into and to be performed entirely within the State of
Georgia.
(b) Successors and Assigns. Except as otherwise provided herein, the
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provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
(c) Entire Agreement. This Agreement constitutes the full and entire
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understanding and agreement between the parties with regard to the subjects
hereof.
(d) Notices, etc. All notices and other communications required or
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permitted hereunder shall be in writing and shall be effective three (3) days
after mailed by first-class mail, postage prepaid, or otherwise delivered by
hand or by messenger, addressed (a) if to a Purchaser, at such Purchaser's
address set forth on the attached exhibit, or at such other address as such
Purchaser shall have furnished to the Company in writing, or (b) if to any other
holder of Registrable Securities, at such address as such Holder shall have
furnished the Company in writing, or, until any such Holder so furnishes an
address to the Company, then to and at the address of the last Holder of such
Registrable Securities who has so furnished an address to the Company, or (c) if
to the Company, at such address as the Company shall have furnished to each
Purchaser and each such other Holder in writing.
(e) Delays or Omissions. No delay or omission to exercise any right, power
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or remedy accruing to any Holder of any Registrable Securities, upon any breach
or default of the Company under this Agreement, shall impair any such right,
power or remedy of such Holder nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or of or in any similar
breach or default thereunder occurring; nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any Holder of any breach or default under this
Agreement, or any waiver on the part of any Holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
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this Agreement, or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
(f) Counterparts. This Agreement may be executed in any number of
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counterparts, each of which may be executed by less than all of the Purchasers,
each of which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
(g) Severability. In the case any provision of this Agreement shall be
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invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
(h) Amendments. The provisions of this Agreement may be amended at any
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time and from time to time, and particular provisions of this Agreement may be
waived, with and only with an agreement or consent in writing signed by the
Company and by the holders of a majority of the number of shares of Registrable
Securities (or securities convertible into Registrable Securities) outstanding
as of the date of such amendment or waiver; provided, however, that without
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obtaining the consent of any other party to this Agreement, the Company may
amend this Agreement to add hereto as parties each person or entity who
purchases Shares pursuant to the Stock Purchase Agreement on or after the date
of this Agreement, such Amendment to be effected by obtaining the signature of
each such party and the Company to a counterpart to this Agreement. Each
Purchaser acknowledges that by the operation of this Section 11(h), the holders
of a majority of the outstanding Registrable Securities may have the right and
power to diminish or eliminate all rights of such Purchaser under this Agreement
and that parties may be added to this Agreement as Purchasers and their
securities may be added to this Agreement as Registrable Securities without the
consent of any Purchaser.
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This Registration Rights Agreement is hereby executed as of the date first
above written.
WebMD, INC.
By: /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxxx X. Xxxxx, Xx.
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Xxxxxxx X. Xxxxxx XXXXXXXX X. XXXXX, XX.
Chief Executive Officer
HALL FAMILY INVESTMENTS, L.P.
By: /s/ Xxxxx Xxxx Green
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Xxxxx Xxxx Green
KEP VI, LLC
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, Managing Member
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EXHIBIT A
Number of Shares of
Purchaser Series B Preferred Stock
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KEP VI, LLC 100,000
Xxxxxxxx X. Xxxxx, Xx. 50,000
Hall Family Investments, L.P. 50,000
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