EXHIBIT 10.68
THIS WARRANT AND THE SHARES OF SERIES D COMMON STOCK OR COMMON STOCK
ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE FEDERAL
SECURITIES ACT OF 1933, AS AMENDED, THE GEORGIA SECURITIES ACT OF 1973, AS
AMENDED, OR THE SECURITIES LAWS OF ANY OTHER STATE. THIS WARRANT AND ANY OF
SUCH SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION UNDER SAID ACTS AND ALL
OTHER APPLICABLE SECURITIES LAWS UNLESS AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.
THIS WARRANT IS SUBJECT TO THE RESTRICTIONS ON TRANSFER CONTAINED IN
ARTICLE IV HEREOF.
WARRANT TO PURCHASE SECURITIES
OF WEBMD, INC.
THIS CERTIFIES that, for value received, WebMD, Inc., a Georgia corporation
(the "Company"), hereby agrees to grant to Gleacher NatWest Inc., a Delaware
corporation, or its registered assigns (the "Holder"), the right to purchase up
to 750,000 shares of Series D Common Stock, no par value per share (the "Series
D Stock"), subject to the terms and conditions set forth herein. This warrant
is hereinafter referred to as the "Warrant."
ARTICLE I
CERTAIN DEFINITIONS
For all purposes of this Warrant, unless the context otherwise requires,
the following terms shall have the following respective meanings:
"Act": the federal Securities Act of 1933, as amended, or any similar
federal statute, and the rules and regulations of the Commission promulgated
thereunder, all as the same shall be in effect at the time.
"Additional Shares of Common Stock": all shares of Common Stock issued by
the Company after the date hereof.
"Articles of Incorporation": the Amended and Restated Articles of
Incorporation of the Company, as further amended from time to time.
"Common Stock": unless otherwise indicated, the Company's authorized
"Common Stock," no par value per share, without designation as to series, as it
exists on the date hereof.
"Commission": the Securities and Exchange Commission or any other federal
agency then administering the Act.
"Company": WebMD, Inc., a Georgia corporation, located at 400 The Lenox
Building, 0000 Xxxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx, 00000, and any other
corporation assuming or required to assume the Warrant pursuant to Article V.
"Convertible Securities": evidences of indebtedness, shares of stock or
other securities that are convertible into or exchangeable for Additional Shares
of Common Stock.
"Exercise Price": $20.00 per share.
"Fair Market Value": with respect to a share of Series D Stock or Common
Stock, as the case may be:
(i) prior to an Initial Public Offering, the fair market value
shall equal $20.00 per share unless otherwise determined by the Board of
Directors, in its sole discretion; or
(ii) subsequent to an Initial Public Offering, the Market Price.
"Gleacher NatWest": Gleacher NatWest Inc.
"Holder": as defined on the first page hereof.
"Initial Public Offering": as defined in the Company's Articles of
Incorporation.
"Letter Agreement": Letter Agreement dated January 27, 1999 between the
Company and Gleacher NatWest regarding the provision of financial advisory
services by Gleacher NatWest to the Company.
"Market Price": with respect to a share of Common Stock on any business
day following the Initial Public Offering: (a) if such security is listed or
admitted for trading on any national securities exchange, the last sale price of
such security, regular way, or the average of the closing bid and asked prices
thereof if no such sale occurred, in each case as officially reported on the
principal securities exchange on which such security is listed, or (b) if not
reported as described in clause (a), the average of the closing bid and asked
prices of such security in the over-the-counter market as shown by the National
Association of Securities Dealers, Inc. Automated Quotation System, or any
similar system of automated dissemination of quotations of securities prices
then in common use, if so quoted, as reported by any member firm of the New York
Stock Exchange selected by the Company, or (c) if not quoted as described in
clause (b), the average of the closing bid and asked prices for such security as
reported by the National Quotation Bureau Incorporated or any similar successor
organization, as reported by any member firm of the New York Stock Exchange
selected by the Company.
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If such security is quoted on a national securities or central market system in
lieu of a market or quotation system described above, the closing price shall be
determined in the manner set forth in clause (a) of the preceding sentence if
actual transactions are reported and in the manner set forth in clause (b) of
the preceding sentence if bid and asked prices are reported but actual
transactions are not.
"Person": any individual, corporation, partnership, trust, unincorporated
organization and any government, and any political subdivision, instrumentality
or agency thereof.
"Registration Rights Agreement" shall mean that certain Registration Rights
Agreement dated as of January 13, 1999, to which Gleacher NatWest, the Company
and certain other shareholders of the Company are parties.
"Series D Stock": as defined on the first page hereof. Following the
occurrence of an Initial Public Offering, all references in this Warrant to
"Series D Stock" shall be deemed to refer to Common Stock, by virtue of the
automatic conversion of the Series D Stock into Common Stock that will occur
pursuant to the Company's Articles of Incorporation.
"Stock Unit": one share of Series D Stock, as such stock is constituted on
the date hereof and thereafter the number of shares of Series D Stock as shall
result from the adjustments specified in Article V.
"Vesting Date": each date on which rights to purchase shares of Series D
Stock pursuant to this Warrant may vest.
"Warrant Office": as defined in Section 3.1.
"Warrant Shares": the shares of Series D Stock or Common Stock, as the
case may be, purchasable by the Holder upon the exercise of this Warrant.
ARTICLE II
EXERCISE OF WARRANT
2.1 Vesting and Exercisability. The right to purchase shares of Series D
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Stock shall vest and become exercisable in accordance with the following:
(a) The right to purchase 500,000 shares of Series D Stock shall be
granted and immediately vest and become exercisable on the date
hereof.
(b) The right to purchase 250,000 shares of Series D Stock shall be
granted on the date hereof and shall immediately vest and become
exercisable on the first anniversary of the date hereof,
provided, however, that if the services of Gleacher NatWest under
the Letter Agreement have been terminated by the Company prior to
the first anniversary of the date
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hereof, such right to purchase 250,000 shares shall not vest and
shall not become exercisable.
(c) Absent an adjustment pursuant to the terms of this Warrant, the
maximum aggregate number of shares of Series D Stock that may be
subject to purchase hereunder shall be 750,000.
2.2 Method of Exercise. To the extent this Warrant is exercisable from
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time to time, to exercise this Warrant, the Holder shall deliver to the Company
at the Warrant Office designated pursuant to Section 3.1 (a) a Notice of
Exercise substantially in the form attached hereto as Exhibit A duly executed by
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the Holder specifying the number of Warrant Shares to be purchased; (b) payment
of an amount equal to the aggregate Exercise Price for all such Warrant Shares,
which shall be made (i) in cash or by certified or bank cashier's check payable
to the order of the Company, or (ii) by delivery to the Company of that number
of shares of Series D Stock having a value computed based upon the Fair Market
Value, equal to the then applicable Exercise Price multiplied by the number of
Warrant Shares then being purchased, and (c) this Warrant. In the alternative,
this Warrant may be exercised on a net basis, such that, without the exchange of
any funds, the Holder receives that number of Warrant Shares subscribed to less
that number of Warrant Shares having an aggregate value computed based upon the
Fair Market Value equal to the aggregate Exercise Price that would otherwise
have been paid by such Holder for the number of Warrant Shares subscribed to.
The Company shall, as promptly as practicable, and in any event within five (5)
days thereafter, cause to be issued and delivered to the Holder (or its nominee)
or the transferee designated in the Notice of Exercise a certificate or
certificates representing the number of Warrant Shares specified in the Notice
of Exercise. The stock certificate or certificates so delivered shall be in
denominations of shares as may be specified in said notice and shall be issued
in the name of the Holder or such other name as shall be designated in said
notice. At the time of delivery of the certificate or certificates, appropriate
notation shall be made on the Warrant Shares Purchase Schedule attached to this
Warrant designating the number of shares purchased, and this Warrant shall then
be returned to the Holder if this Warrant has been exercised only in part. The
Holder or transferee so designated in the Notice of Exercise shall be deemed to
have become the Holder of record of such Warrant Shares for all purposes as of
the close of business on the date on which the Notice of Exercise is delivered
to the Warrant Office, provided that an amount equal to the aggregate Exercise
Price and this Warrant shall have also been delivered to the Company. The
Company shall pay all expenses, taxes (excluding capital gains and income taxes)
and other charges payable in connection with the preparation, issuance and
delivery of stock certificates, except that, in case stock certificates shall be
registered in a name or names other than the name of the Holder, funds
sufficient to pay all stock transfer taxes payable upon the issuance of stock
certificates shall be paid by the Holder promptly upon receipt of a written
request of the Company therefor.
2.3 Shares to be Fully Paid and Non-Assessable. All Warrant Shares issued
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upon the exercise of this Warrant shall be validly issued, fully paid, non-
assessable and free from preemptive rights.
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2.4 No Fractional Shares to be Issued. The Company shall not be required
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upon any exercise of this Warrant to issue a certificate representing any
fraction of a share of Series D Stock.
2.5 Legend on Warrant Shares. Each certificate for Warrant Shares issued
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upon exercise of this Warrant, unless at the time of exercise such shares are
registered under the Act, shall bear substantially the following legend (and any
additional legend required by any national securities exchanges upon which such
shares may, at the time of such exercise, be listed or under applicable
securities laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED,
OR THE GEORGIA SECURITIES ACT OF 1973, AS AMENDED ("THE ACTS"),
OR THE SECURITIES LAWS OF ANY STATE. THEY MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, HYPOTHECATED, ENCUMBERED, OR
OTHERWISE DISPOSED OF UNLESS, IN THE OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE ISSUER, SUCH TRANSFER WOULD BE
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACTS
OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION.
Any certificate issued at any time in exchange or substitution for any
certificate bearing such legend (except a new certificate issued upon completion
of a public distribution pursuant to a registration statement under the Act of
the securities represented thereby) shall also bear the above legend unless, in
the opinion of counsel to the Company, the securities represented thereby need
no longer be subject to the restrictions on transferability. In addition, the
provisions of Article IV shall be binding upon all subsequent holders of this
Warrant.
2.6 Acknowledgment of Continuing Obligation. The Company shall, at the
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time of any exercise of this Warrant in whole or in part, upon request of the
Holder, acknowledge in writing its continuing obligation to such holder in
respect of any rights to which the Holder shall continue to be entitled after
exercise in accordance with this Warrant; provided, however, that the failure of
the Holder to make any such request shall not affect the continuing obligation
of the Company to the Holder in respect of such rights.
ARTICLE III
WARRANT OFFICE; TRANSFER, DIVISION
OR COMBINATION OF WARRANTS
3.1. Warrant Office. The Company shall maintain an office for certain
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purposes specified herein (the "Warrant Office"), which office shall initially
be the Company's location set forth in Article I hereof, and may subsequently be
such other office of the Company or of
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any transfer agent of the Common Stock in the continental United States as to
which written notice has previously been given to all of the Holders of the
Warrants.
3.2. Ownership of Warrant. The Company may deem and treat the Person in
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whose name this Warrant is registered as the Holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any notice
to the contrary, until presentation of this Warrant for registration of transfer
as provided in this Article III.
3.3. Transfer of Warrant. The Company agrees to maintain at the Warrant
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Office books for the registration of permitted transfers of this Warrant.
Subject to the provisions of Article IV, this Warrant and all rights hereunder
are transferable, in whole or in part, on the books at that office, upon
surrender of this Warrant at that office, together with a written assignment of
this Warrant duly executed by the Holder or his or its duly authorized agent or
attorney and funds sufficient to pay any transfer taxes payable upon the making
of the transfer. Subject to Article IV, upon surrender and payment, the Company
shall execute and deliver a new Warrant in the name of the assignee, noting
thereon the number of Warrant Shares theretofore purchased under this Warrant,
and this Warrant shall promptly be canceled. A Warrant may be exercised by a new
Holder for the purchase of shares of Series D Stock without having a new warrant
issued.
3.4. Division or Combination of Warrants. This Warrant may not be divided
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or combined with any other warrant.
3.5. Expenses of Delivery of Warrants. The Company shall pay all
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expenses, taxes (other than transfer taxes), and other charges payable in
connection with the preparation, issuance and delivery of new Warrants
hereunder.
ARTICLE IV
RESTRICTION ON TRANSFER
4.1. Restrictions on Transfer. Notwithstanding any provisions contained
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in this Warrant to the contrary, this Warrant shall not be exercisable or
transferable except upon the conditions specified in this Article IV, which
conditions are intended, among other things, to insure compliance with the
provisions of the Act in respect of the exercise or transfer of the Warrant.
4.2. Opinion of Counsel. In connection with any exercise or transfer of
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this Warrant, the following provisions shall apply:
(a) If in the written opinion of counsel to the Holder delivered to
the Company (which opinion and counsel must be reasonably acceptable to the
Company), proposed exercise or transfer of this Warrant may be effected without
registration of this Warrant or the Common Stock issuable hereunder under the
Act, the Holder shall be entitled to
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exercise or transfer this Warrant as proposed. In no event shall the Company be
obligated (i) to effect a registration under the Act or any state securities law
so as to permit the proposed exercise or transfer of this Warrant or (ii) to
qualify to do business or to file a general consent to service of process in any
state or other jurisdiction; provided, however, that the Company shall have the
obligation to register the shares of Common Stock issued upon exercise of this
Warrant on the terms set forth in the Registration Rights Agreement.
(b) If in the opinion of such counsel, the proposed exercise or
transfer of this Warrant may not be effected without registration of this
Warrant under the Act, the Holder shall not be entitled to exercise or transfer
this Warrant until registration is effective or until exercise or transfer may
be effected without registration, in the opinion of such counsel as set forth in
Section 4.2(a) above.
ARTICLE V
ADJUSTMENTS
5.1. Adjustments to Number of Stock Units. The number of shares of Series
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D Stock comprising a Stock Unit shall be subject to adjustment from time to time
as set forth in this Section 5.1.
(a) Stock Dividends, Subdivision and Combination. In case at any
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time or from time to time the Company shall:
(i) take a record of the holders of its Common Stock of any
series for the purpose of entitling them to receive a dividend payable in, or
other distribution of, Common Stock, or
(ii) subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock, or
(iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock;
then the number of shares of Series D Stock comprising a Stock Unit immediately
after the happening of any such event shall be adjusted so as to consist of the
number of shares of Series D Stock that a record holder of the number of shares
of Series D Stock comprising a Stock Unit immediately prior to the happening of
such event would own or be entitled to receive after the happening of such
event. The adjustments required by this subsection shall be made whenever and
as often as any specified event requiring an adjustment shall occur.
(b) Certain Other Dividends and Distributions. In case at any time
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or from time to time the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive any dividend or other
distribution of
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(i) cash (other than a cash distribution made as a dividend
payable out of the net earnings or net profits of the Company realized during
the year of such distribution or the last preceding year and accumulated net
earnings or net profits of the Company from the date hereof to the time of such
distribution, computed in accordance with generally accepted accounting
principles employed by the Board of Directors of the Company for purposes of
financial reports to shareholders of the Company); or
(ii) any evidences of its indebtedness, any shares of its stock
or any other securities or property of any nature whatsoever (other than cash);
then at least five (5) business days prior to the record date to determine
shareholders entitled to receive such dividend or distribution, the Company
shall give notice of such proposed dividend or distribution to the Holder for
the purpose of enabling the Holder to exercise the same, and thereby participate
in such dividend or distribution.
(c) Issuance of Additional Shares.
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(i) In case at any time prior to the occurrence of the
Initial Public Offering the Company shall (except as hereinafter provided) issue
or sell any Additional Shares of Common Stock for a consideration per share less
than the Exercise Price, then the number of shares of Series D Stock thereafter
comprising a Stock Unit shall be adjusted to that number determined by
multiplying the number of shares of Series D Stock comprising a Stock Unit
immediately prior to such adjustment by a fraction (i) the numerator of which
shall be the number of shares of Common Stock issued and outstanding plus the
number of Additional Shares of Common Stock deemed to be outstanding pursuant to
Subsection 5.1(d) immediately prior to the issuance of such Additional Shares of
Common Stock plus the number of such Additional Shares of Common Stock so issued
and (ii) the denominator of which shall be the number of shares of Common Stock
issued and outstanding plus the number of Additional Shares of Common Stock
deemed to be outstanding pursuant to Subsection 5.1(d) immediately prior to the
issuance of such Additional Shares of Common Stock plus the number of shares of
Common Stock that the aggregate consideration for the total number of such
Additional Shares of Common Stock so issued would purchase at the Exercise
Price.
(ii) In case at any time after the date of the occurrence of
the Initial Public Offering the Company shall (except as hereinafter provided)
issue or sell any Additional Shares of Common Stock for a consideration per
share less than the Market Price, then the number of shares of Common Stock
thereafter comprising a Stock Unit shall be adjusted to that number determined
by multiplying the number of shares of Common Stock comprising a Stock Unit
immediately prior to such adjustment by a fraction (i) the numerator of which
shall be the number of shares of Common Stock issued and outstanding plus the
number of Additional Shares of Common Stock deemed to be outstanding pursuant to
Subsection 5.1(d) immediately prior to the issuance of such Additional Shares of
Common Stock plus the number of such Additional Shares of Common Stock so issued
and (ii) the denominator of which shall be the number of shares of Common Stock
issued and outstanding plus the number of Additional Shares of Common Stock
deemed to be outstanding pursuant to Subsection 5.1(d) immediately prior to the
issuance of such Additional Shares of Common Stock plus the number of shares of
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Common Stock that the aggregate consideration for the total number of such
Additional Shares of Common Stock so issued would purchase at the Market Price.
The provisions of this Subsection 5.1(c) shall not apply to any issuance of
Additional Shares of Common Stock for which an adjustment is provided under
Subsection 5.1(a). No adjustment of the number of shares of Series D Stock or
Common Stock comprising a Stock Unit shall be made under this subsection upon
the issuance of any Additional Shares of Common Stock that are issued pursuant
to the exercise of any warrants or other subscription or purchase rights or
pursuant to the exercise of any conversion or exchange rights in any
Convertible Securities, if any such adjustment shall previously have been made
upon the issuance of such warrants or other rights or upon the issuance of such
Convertible Securities (or upon the issuance of any warrant or other rights
therefor) pursuant to Subsection 5.1(d).
(d) Issuance of Warrants, Convertible Securities or Other Rights. In
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case at any time or from time to time the Company shall issue or sell any
warrants or other rights to subscribe for or purchase any Additional Shares of
Common Stock or any Convertible Securities, whether or not the rights to
exchange or convert thereunder are immediately exercisable, and the
consideration per share for which Additional Shares of Common Stock may at any
time thereafter be issuable pursuant to such warrants or other rights or
pursuant to the terms of such Convertible Securities shall be lower than the
Exercise Price, then the number of shares of Series D Stock thereafter
comprising a Stock Unit shall be adjusted as provided in Subsection 5.1(c) and
the aggregate consideration for such maximum number of Additional Shares of
Common Stock shall be deemed to be the minimum consideration received and
receivable by the Company for the issuance of such Additional Shares of Common
Stock pursuant to such warrants or other rights or pursuant to the terms of such
Convertible Securities. No adjustment of the number of shares of Series D Stock
comprising a Stock Unit shall be made under this Subsection 5.1(d) upon the
issuance of any Convertible Securities that are issued pursuant to the exercise
of any warrants or other subscription or purchase rights therefor, if any such
adjustment shall previously have been made upon the issuance of such warrants or
other rights pursuant to this Subsection 5.1(d).
(e) Superseding Adjustment of Stock Unit. If, at any time after any
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adjustment of the number of shares comprising a Stock Unit shall have been made
pursuant to the foregoing Subsection 5.1(d) on the basis of the issuance of
warrants or other rights or the issuance of other Convertible Securities, or
after any new adjustments of the number of shares comprising a Stock Unit shall
have been made pursuant to this Subsection 5.1(e),
(i) such warrants or rights or the right of conversion or
exchange in such other Convertible Securities shall expire, and a portion of
such warrants or rights, or the right of conversion or exchange in respect of a
portion of such other Convertible Securities, as the case may be, shall not have
been exercised, and/or
(ii) the consideration per share, for which shares of Common
Stock are issuable pursuant to such warrants or rights or the terms of such
other Convertible Securities, shall be increased for any reason,
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then such previous adjustment shall be rescinded and annulled and the Additional
Shares of Common Stock that were deemed to have been issued by virtue of the
computation made in connection with the adjustment so rescinded and annulled
shall no longer be deemed to have been issued by virtue of such computation.
Thereupon, a recomputation shall be made of the effect of such rights or options
or other Convertible Securities on the basis of
(x) treating the number of Additional Shares of Common Stock, if any,
theretofore actually issued or issuable pursuant to the previous exercise
of such warrants or rights or such right of conversion or exchange, as
having been issued on the date or dates of such exercise and for the
consideration actually received and receivable therefor, and
(y) treating any such warrants or rights or any such other
Convertible Securities that then remain outstanding as having been granted
or issued immediately after the time of such increase of the consideration
per share for which shares of Common Stock are issuable under such warrants
or rights or other Convertible Securities;
and, if and to the extent called for by the foregoing provisions of this Section
5.1 on the basis aforesaid, a new adjustment of the number of shares comprising
a Stock Unit shall be made, which new adjustment shall supersede the previous
adjustment so rescinded and annulled.
(f) Other Provisions Applicable to Adjustment Under This Section.
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The following provisions shall be applicable to the making of adjustments of the
number of shares of Series D Stock comprising a Stock Unit hereinbefore provided
for in this Section 5.1:
(i) Treasury Stock. The sale or other disposition of any
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issued shares of Common Stock owned or held by or for the account of the Company
shall be deemed an issuance thereof for the purposes of this Section 5.1.
(ii) Computation of Consideration. To the extent that any
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Additional Shares of Common Stock or any Convertible Securities or any warrants
or other rights to subscribe for or purchase any Additional Shares of Common
Stock or any Convertible Securities shall be issued for a cash consideration,
the consideration received by the Company therefor shall be deemed to be the
amount of the cash received by the Company therefor, or, if such Additional
Shares of Common Stock or Convertible Securities are offered by the Company for
subscription, the subscription price, or, if such Additional Shares of Common
Stock or Convertible Securities are sold to underwriters or dealers for public
offering without a subscription offering, the initial public offering price, in
any such case excluding any amounts paid or receivable for accrued interest or
accrued dividends (but without deduction of any compensation, discounts or
expenses
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paid or incurred by the Company for and in the underwriting of, or otherwise in
connection with, the issuance thereof). To the extent that such issuance shall
be for a consideration other than cash, then, except as herein otherwise
expressly provided, the amount of such consideration shall be deemed to be the
fair value of such consideration at the time of such issuance as determined in
good faith by the Board of Directors of the Company (but without deduction of
any compensation, discounts or expenses paid or incurred by the Company for and
in the underwriting of, or otherwise in connection with, the issuance thereof).
In case any Additional Shares of Common Stock or Convertible Securities or any
warrants or other rights to subscribe for or purchase such Additional Shares of
Common Stock or Convertible Securities shall be issued in connection with any
merger in which the Company issues any securities, the amount of consideration
therefor shall be deemed to be the fair value, as determined in good faith by
the Board of Directors of the Company, of such portion of the assets and
business of the nonsurviving corporation as such Board in good faith shall
determine to be attributable to such Additional Shares of Common Stock,
Convertible Securities, warrants or other rights, as the case may be. In the
event of any consolidation or merger of the Company in which the Company is not
the surviving corporation or in the event of any sale of all or substantially
all of the assets of the Company for stock or other securities of any
corporation, the Company shall be deemed to have issued a number of Additional
Shares of Common Stock or Convertible Securities of the other corporation
computed on the basis of the actual exchange ratio on which the transaction was
predicated, and the consideration received for such issuance shall be equal to
the fair market value, as determined in good faith by the Board of Directors of
the Company, on the date of such transaction, of such stock or securities of the
other corporation, and if any such calculation results in adjustment of the
number of shares of Series D Stock comprising a Stock Unit immediately prior to
such merger, conversion or sale for purposes of this Subsection 5.1(f), such
merger, conversion or sale shall be deemed to have been made after giving effect
to such adjustment. The consideration for any Additional Shares of Common Stock
issuable pursuant to any warrants or other rights to subscribe for or purchase
the same shall be the consideration received by the Company for issuing such
warrants or other rights, plus the additional consideration payable to the
Company upon the exercise of such warrants or other rights. The consideration
for any Additional Shares of Common Stock issuable pursuant to the terms of any
Convertible Securities shall be the consideration received by the Company for
issuing any warrants or other rights to subscribe for or purchase such
Convertible Securities, plus the consideration paid or payable to the Company in
respect of the subscription for or purchase of such Convertible Securities, plus
the additional consideration, if any, payable to the Company upon the exercise
of the right of conversion or exchange in such Convertible Securities.
(iii) When Adjustments to be Made. The adjustments required by
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the preceding subsections of this Section 5.1 shall be made whenever and as
often as any specified event requiring an adjustment shall occur, except that no
adjustment of the number of shares of Series D Stock comprising a Stock Unit
that would otherwise be required shall be made (except in the case of a
subdivision or combination of shares of the Series D Stock, as provided for in
Subsection 5.1(a)) unless and until such adjustment, either by itself or with
other adjustments not previously made, adds or subtracts at least 1/20th of a
share to or from the number of shares of Series D Stock comprising a Stock Unit
immediately prior to the making of such adjustment. Any adjustment representing
a change of less than such minimum amount (except as aforesaid) shall be carried
forward and made as soon as such adjustment, together with other adjustments
required by this section and not previously made, would result in a minimum
adjustment. For the purpose of any adjustment, any specified event shall be
deemed to have occurred at the close of business on the date of its occurrence.
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(iv) Fractional Interests. In computing adjustments under this
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section, fractional interests in Series D Stock shall be taken into account to
the nearest one-thousandth of a share.
(v) When Adjustment Not Required -- Abandonment of Plan for
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Dividend and the Like. If the Company shall take a record of the holders of its
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Common Stock for the purpose of entitling them to receive a dividend or
distribution or subscription or purchase rights and shall, thereafter and before
the distribution to shareholders thereof, legally abandon its plan to pay or
deliver such dividend, distribution, subscription or purchase rights, then
thereafter no adjustment shall be required by reason of the taking of such
record and any such adjustment previously made in respect thereof shall be
rescinded and annulled.
(g) Reorganization, Reclassification, Merger, Consolidation or
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Disposition of Assets. In case the Company shall reorganize its capital,
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reclassify its capital stock, merge or consolidate into another corporation,
then the number of shares of stock purchasable upon exercise of this Warrant
shall be adjusted to consist of the number of shares of stock or other
securities that a record holder of the number of shares of Series D Stock
purchasable upon exercise of this Warrant immediately prior to such event would
own or be entitled to receive immediately after such event.
(h) No Adjustment. Notwithstanding the foregoing, an adjustment as
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provided in this Section 5.1 shall not be made if (a) the Company offers
securities to the public pursuant to a registration statement under the
Securities Act; (b) the Company issues securities pursuant to the acquisition by
the Company of any product, technology, know-how or another corporation by
merger, purchase of all or substantially all of the assets, or any other
reorganization whereby the Company owns over fifty percent (50%) of the voting
power of such corporation; (c) the Company issues shares of its capital stock in
connection with any stock split, stock dividend or recapitalization by the
Company; (d) the Company issues any shares of common stock of the Company
pursuant to options, warrants or rights granted before the date hereof, or
granted before or after the date hereof if granted to purchase shares of such
common stock in favor of employees, directors, officers, strategic partners or
consultants of the Company or any subsidiary thereof pursuant to a stock option
plan or agreement approved by the Company's Board of Directors; provided that
such stock options thereunder, if granted after the date hereof, are granted at
a conversion or exercise price that the Company's Board of Directors determines
in good faith is not less than the fair market value of the securities into
which they are exercisable as of the date of grant; or (e) the Company converts
any securities into Common Stock pursuant to the Company's Articles of
Incorporation, as amended.
5.2. Notice to Holder. Whenever the Company takes any action that causes
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the composition of a Stock Unit to change under Sections 5.1(a) through 5.1(g),
the Company shall provide the Holder with written notice of such change and the
number of Warrant Shares for which this Warrant is or will become exercisable.
Such notice will be provided not more than ten days after any such action has
occurred.
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ARTICLE VI
ADDITIONAL NOTICES TO WARRANT HOLDER
In addition to any other notice required hereunder, the Company shall
provide the Holder with a copy of any notice that the Company is required to
provide those Persons holding shares of Series D Stock on the same date such
persons receive such notice.
ARTICLE VII
EXPIRATION
Rights to purchase shares under this Warrant shall expire and may not be
exercised after the fifth anniversary of their respective Vesting Dates.
ARTICLE VIII
CERTAIN COVENANTS OF THE COMPANY
The Company has taken all action necessary to authorize the issuance of
this Warrant and the issuance of shares of Series D Stock upon exercise hereof.
The Company covenants and agrees that it will reserve and set apart and have at
all times, free from preemptive rights, a number of shares of authorized but
unissued Series D Stock or other securities deliverable upon the exercise of
this Warrant from time to time sufficient to enable it at any time to fulfill
all its obligations hereunder.
ARTICLE IX
MISCELLANEOUS
9.1. Entire Agreement. This Warrant and the Letter Agreement contain the
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entire agreement between the Holder and the Company with respect to the purchase
of the Warrant Shares and supersedes all prior arrangements or understandings
with respect thereto.
9.2. Waiver and Amendment. Any term or provision of this Warrant may be
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waived at any time by the party that is entitled to the benefits thereof, and
any term or provision of this Warrant may be amended or supplemented at any time
by agreement of the holder hereof and the Company, except that any waiver of any
term or condition, or any amendment or supplementation, of this Warrant must be
in writing. A waiver of any breach or failure to enforce any of the terms or
conditions of this Warrant shall not in any way affect, limit or waive a party's
rights hereunder at any time to enforce strict compliance thereafter with any
term or condition of this Warrant. In the event this Warrant is ever divided and
held by more than one person, the "Holder" for such purposes shall mean the
holders of a majority of the Warrant Shares.
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9.3. Illegality. In the event that any one or more of the provisions
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contained in this Warrant shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in any other respect and the remaining
provisions of this Warrant shall not, at the election of the party for whom the
benefit of the provision exists, be in any way impaired.
9.4. Filing of Warrant. A copy of this Warrant shall be filed in the
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records of the Company.
9.5. Notices. Any notice or other document required or permitted to be
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given or delivered to the Holder shall be delivered personally, or sent by
certified or registered mail, to the Holder at the last address shown on the
books of the Company maintained at the Warrant Office for the registration of,
and the registration of transfer of, the Warrant or at any more recent address
of which any Holder shall have notified the Company in writing. Any notice or
other document required or permitted to be given or delivered to the Company
shall be delivered at, or sent by certified or registered mail to, the Warrant
Office, attention: Chief Executive Officer, or such other address within the
United States of America as shall have been furnished by the Company to the
Holder hereof.
9.6. Limitation of Liability; Not Shareholders. No provision of this
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Warrant shall be construed as conferring upon the Holder the right to vote,
consent, receive dividends or receive notice other than as herein expressly
provided in respect of meetings of shareholders for the election of directors of
the Company or any other matter whatsoever as a shareholder of the Company. No
provision hereof, in the absence of affirmative action by the Holder to purchase
Warrant Shares, and no enumeration herein of the rights or privileges of the
Holder, shall give rise to any liability of such Holder for the purchase price
of any Warrant Shares or as a shareholder of the Company, whether such liability
is asserted by the Company or by creditors of the Company.
9.7. Loss, Destruction, Etc. of Warrant. Upon receipt of evidence
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satisfactory to the Company of the loss, theft, mutilation or destruction of the
Warrant, and in the case of any such loss, theft or destruction, upon delivery
of a bond of indemnity in such form and amount as shall be reasonably
satisfactory to the Company, or in the event of such mutilation, upon surrender
and cancellation of the Warrant, the Company shall make and deliver a new
warrant, of like tenor, in lieu of such lost, stolen, destroyed or mutilated
Warrant. Any Warrant issued under the provisions of this Section 9.7 in lieu of
any Warrant alleged to be lost, destroyed or stolen, or in lieu of any mutilated
Warrant, shall constitute an original contractual obligation on the part of the
Company.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in its
name by its Chief Executive Officer and its corporate seal to be impressed
hereon as of the 27th day of January, 1999.
[CORPORATE SEAL] WEBMD, INC.
Attest:
By: /s/ W. Xxxxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
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Name: W. Xxxxxxx Xxxxxx Xxxxxxx X. Xxxxxx, Chief Executive
-----------------------------
Officer
Title: Executive Vice President
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15
WARRANT SHARES PURCHASE SCHEDULE
NO. OF SHARES PURCHASED DATE OF PURCHASE NOTATION BY COMPANY OFFICER
---------------------------- ----------------------- ------------------------------------
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EXHIBIT A
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TO WARRANT
NOTICE OF EXERCISE
Dated:_____________________________
The undersigned hereby irrevocably elects to exercise its right to purchase
_____ shares of the [SERIES D STOCK] [COMMON STOCK], no par value per share, of
WebMD, Inc., such right being pursuant to a Warrant dated _______________ ____,
1999, as issued to Gleacher NatWest Inc., for up to ________ shares of such
[SERIES D STOCK] [COMMON STOCK], and (i) remits herewith the sum of $_______ in
payment for same in accordance with said warrant or (ii), in accordance with
Section 2.2 of the Warrant, elects to receive such number of shares by having
credited to the undersigned the Market Value (as such term is defined in the
Warrant) of a sufficient number of additional shares of [SERIES D STOCK] [COMMON
STOCK] for which the Warrant could otherwise be exercised such that such Market
Value equals the Exercise Price for such shares of [SERIES D STOCK] [COMMON
STOCK].
INSTRUCTIONS FOR REGISTRATION OF STOCK
Name____________________________________________________________________________
(Please typewrite or print in block letters)
Address_________________________________________________________________________
Signature:______________________________
Shares Heretofore Purchased
Under Warrant:
___________________________________
