REGISTRATION RIGHTS AGREEMENT BY AND BETWEEN WEBMD CORPORATION AND WEBMD HEALTH CORP. DATED AS OF [_______________], 2005
Exhibit 4.2
BY AND BETWEEN
WEBMD CORPORATION
AND
DATED AS OF [_______________], 2005
Table of Contents
| Page | ||||||
SECTION 1. |
Definitions | 3 | ||||
SECTION 2. |
Demand Registration | 6 | ||||
SECTION 3. |
Piggy-Back Registration | 7 | ||||
SECTION 4. |
Blackout Periods | 8 | ||||
SECTION 5. |
Registration Procedures | 8 | ||||
SECTION 6. |
Expenses | 12 | ||||
SECTION 7. |
Rule 144 and Rule 144A Information | 12 | ||||
SECTION 8. |
Indemnification and Contribution | 13 | ||||
SECTION 9. |
Certain Additional Limitations on Registration Rights | 15 | ||||
SECTION 10. |
Limitations on Registration of Other Securities; Representation | 16 | ||||
SECTION 11. |
No Inconsistent Agreements | 16 | ||||
SECTION 12. |
Selection of Managing Underwriters | 16 | ||||
SECTION 13. |
Term of Registration Rights | 17 | ||||
SECTION 14. |
Miscellaneous | 17 | ||||
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REGISTRATION RIGHTS AGREEMENT, dated as of [___], 2005 (this “Agreement”),
between WebMD Health Corp., a Delaware corporation (the “Company”), and WebMD Corporation,
a Delaware corporation (the “Parent”).
RECITALS
WHEREAS, the Company is a wholly owned subsidiary of Parent;
WHEARAS, the authorized capital stock of the Company comprises 500 million shares of Class A
common stock, par value $.01 per share (the “Class A Common Stock”), 150 million shares of
Class B common stock, par value $.01 per share (the “Class B Common Stock”), and 50 million
shares of preferred stock (the “Preferred Stock”);
WHEREAS, pursuant to the transactions contemplated by the registration statement of the
Company on Form S-1 (File No. 333-124832) filed with the Securities and Exchange Commission on May
12, 2005, as the same may be amended from time to time (the “IPO Registration Statement”),
the Company intends to offer newly issued shares of Company’s Class A common stock in an initial
public offering (the “Offering”);
WHEREAS, upon completion of the Offering and as of the date hereof, Parent is the owner of all
of the outstanding Class B Common Stock, which is convertible into Class A Common Stock on a
one-for-one basis, subject to adjustment as provided in the Amended and Restated Certificate of
Incorporation of the Company.
NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained and
for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the Company and Parent, for themselves,
their successors, and assigns, hereby agree as follows:
SECTION 1. Definitions. Capitalized terms used in this Agreement without definition
shall have the following meanings (such meanings being equally applicable to both the singular and
plural form of the terms defined):
“Affiliate” shall mean, with respect to any specified Person, any other Person that
directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under
common Control with, such specified Person.
“Agreement” shall have the meaning set forth in the preamble of this Agreement.
“Assignment and Acceptance” shall have the meaning set forth in Section 14(d) of this
Agreement.
“Blackout Period” shall have the meaning set forth in Section 4 of this Agreement.
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“Business Day” shall mean any day that is not a Saturday, a Sunday or a day on which
commercial banks are required or permitted by law to be closed in the City of New York in the State
of New York.
“Class A Common Stock” shall have the meaning set forth in the recitals of this
Agreement.
“Class B Common Stock” shall have the meaning set forth in the recitals of this
Agreement.
“Commission” shall mean the Securities and Exchange Commission, or any successor
thereto.
“Company” shall have the meaning set forth in the preamble of this Agreement.
“Control” (including the terms “Controlled by” and “under common Control
with”) means the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the ownership of voting
securities, as trustee or executor, by contract or otherwise, including, without limitation, the
ownership, directly or indirectly, of securities having the power to elect a majority of the board
of directors or similar body governing the affairs of such Person.
“Demand for Registration” shall have the meaning set forth in Section 2(d) of this
Agreement.
“Demand Registration” shall have the meaning set forth in Section 2(a) of this
Agreement.
“Demand Registration Statement” shall have the meaning set forth in Section 2(a) of
this Agreement.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and all
rules and regulations promulgated thereunder.
“Holder” shall mean the Parent and its successors by operation of law or by way of
merger.
“IPO” shall mean the initial public offering of the Class A Common Stock pursuant to
the Offering.
“IPO Registration Statement” shall have the meaning set forth in the recitals of this
Agreement.
“Indemnified Party” shall have the meaning set forth in Section 8(d) of this
Agreement.
“Indemnifying Party” shall have the meaning set forth in Section 8(d) of this
Agreement.
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“Maximum Number of Securities” shall have the meaning set forth in Section 2(b) of
this Agreement.
“NASD” shall mean the National Association of Securities Dealers, Inc., or any
successor entity thereof.
“Notice of Election” shall have the meaning set forth in Section 2(a) of this
Agreement.
“Offering” shall have the meaning set forth in the recitals of this Agreement.
“Parent” shall have the meaning set forth in the preamble of this Agreement.
“Person” shall mean any individual, corporation, limited liability company,
partnership, joint venture, firm, trust, unincorporated organization, government or any agency or
political subdivision thereof or other entity.
“Piggy-Back Registration” shall have the meaning set forth in Section 3(a) of this
Agreement.
“Piggy-Back Registration Statement” shall have the meaning set forth in Section 3(a)
of this Agreement.
“Preferred Stock” shall have the meaning set forth in the recitals of this Agreement.
“Registrable Securities” shall mean shares of Class A Common Stock issuable or issued
upon conversion of shares of Class B Common Stock. For purposes of this Agreement, (i) Registrable
Securities shall cease to be Registrable Securities when a Registration Statement covering such
Registrable Securities has been declared effective under the Securities Act by the Commission and
such Registrable Securities have been disposed of pursuant to such effective Registration Statement
and (ii) the Registrable Securities of a Holder shall not be deemed to be Registrable Securities at
any time when the entire amount of such Registrable Securities proposed to be sold by the Holder in
a single sale constitute less than 1% of the then outstanding shares of Class A Common Stock or, in
the opinion of counsel satisfactory to the Company and the Holder, each in their reasonable
judgment, may be distributed to the public pursuant to Rule 144 (or any successor provision then in
effect) under the Securities Act in any three-month period or any such Registrable Securities have
been sold in a sale made pursuant to Rule 144 (or any successor provision then in effect) of the
Securities Act.
“Registration Statement” shall mean the Demand Registration Statement, the Piggy-Back
Registration Statement and/or the Shelf Registration Statement, as the case may be.
“Securities Act” shall mean the Securities Act of 1933, as amended, and all rules and
regulations promulgated thereunder.
“Shelf Registration” shall have the meaning set forth in Section 2(c) of this
Agreement.
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“Shelf Registration Statement” shall have the meaning set forth in Section 2(c) of
this Agreement.
SECTION 2. Demand Registration.
(a) Commencing from the 365th day after the effective date of the IPO Registration
Statement, at any time and from time to time, upon receipt of a written request (such request
referred to in this Agreement as, the “Notice of Election”) from the Holder requesting that
the Company effect a registration (a “Demand Registration”) under the Securities Act
covering all or part of the Registrable Securities held by the Holder which specifies the number of
Registrable Securities that the Holder elects to include in such Demand Registration and the
intended method or methods of disposition thereof, the Company shall use its reasonable best
efforts, but in any event no later than 30 days (excluding any days which occur during a permitted
Blackout Period under Section 4 below) after receipt of the Notice of Election from the Holder
pursuant to this Section 2(a), file with the Commission and use its commercially reasonable efforts
to cause to be declared effective, a registration statement (a “Demand Registration
Statement”) relating to all shares of Registrable Securities which the Company has been so
requested to register by the Holder for sale, to the extent required to permit the disposition (in
accordance with the intended method or methods thereof, as aforesaid) of the Registrable Securities
so registered; provided, however, that the Company shall not be required to file a
Demand Registration Statement and otherwise comply with the provisions of this Section 2(a) unless
the aggregate number of the Registrable Securities requested to be registered (i) constitute at
least 5% of the Registrable Securities issued and outstanding as of the date of this Agreement or
(ii) have an aggregate minimum market value of at least $[___] based on the closing trading
price of the Class A Common Stock on the date the written demand to file such Demand Registration
Statement is made.
(b) If the Holder in a Demand Registration relating to a public offering so request that the
offering be underwritten with a managing underwriter selected in the manner set forth in Section 12
below and such managing underwriter of such Demand Registration advises the Company in writing
that, in its opinion, the number of securities to be included in such offering is greater than the
total number of securities which can be sold therein without having a material adverse effect on
the distribution of such securities or otherwise having a material adverse effect on the
marketability thereof (the “Maximum Number of Securities”), then the Company shall include
in such Demand Registration the Registrable Securities that the Holder has requested to be
registered thereunder only to the extent the number of such Registrable Securities does not exceed
the Maximum Number of Securities. If the amount of such Registrable Securities does not exceed the
Maximum Number of Securities, the Company may include in such Registration any other securities of
the Company and other securities held by other security holders of the Company, as the Company may
in its discretion determine or be obligated to allow, in an amount which, together with the
Registrable Securities included in such Demand Registration, shall not exceed the Maximum Number of
Securities.
(c) Any Demand Registration Statement may be required by the Holder to be in an appropriate
form under the Securities Act (a “Shelf Registration Statement”) relating to any or all of the Registrable Securities in accordance with the methods and distribution set forth in
the Shelf Registration Statement and Rule 415 under the Securities Act (the “Shelf
Registration”).
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Any such demand to file a Shelf Registration Statement shall require the use
of two Demand for Registration requests.
(d) The Holder shall be entitled to an aggregate of 5 registrations of Registrable Securities
pursuant to this Section 2 (each, a “Demand for Registration”); provided, that a
registration requested pursuant to this Section 2 shall not be deemed to have been effected for
purposes of this Section 2(d) unless (i) a Registration Statement relating thereto has been
declared effective by the Commission, (ii) it has remained effective for the period set forth in
Section 5(a), (iii) the Company shall have complied with the provisions of Sections 2(a), 2(b) and
2(c), without giving effect to the proviso in Section 2(a), and (iv) the offering of Registrable
Securities pursuant to such Registration Statement is not subject to any stop order, injunction or
other order or requirement of the Commission (other than any such stop order, injunction, or other
requirement of the Commission prompted by act or omission of the Holder of Registrable Securities).
(e) Notwithstanding anything to the contrary contained herein, the Company shall not be
required to prepare and file more than two Demand Registration Statements in any twelve-month
period.
SECTION 3. Piggy-Back Registration.
(a) If, at any time after the IPO, the Company proposes to file on its behalf and/or on behalf
of any holder of its securities (other than a holder of Registrable Securities) a registration
statement under the Securities Act on any form (other than a registration statement on Form S-4 or
S-8 or any successor form for securities to be offered in a transaction of the type referred to in
Rule 145 under the Securities Act or to employees of the Company pursuant to any employee benefit
plan, respectively) for the registration of any of its equity interests (a “Piggy-Back
Registration”), it will give written notice to the Holder at least 20 days before the initial
filing with the Commission of such piggy-back registration statement (a “Piggy-Back
Registration Statement”), which notice shall set forth the intended method of disposition of
the securities proposed to be registered by the Company. The notice shall offer to include in such
filing the aggregate number of shares of Registrable Securities as the Holder may request, subject
to the limits set forth in Section 3(c) below.
(b) If the Holder desires to have Registrable Securities registered under this Section 3, it
shall advise the Company in writing within 10 days after the date of receipt of such offer from the
Company, setting forth the amount of such Registrable Securities for which registration is
requested. The Company shall thereupon include in such filing the number or amount of Registrable
Securities for which registration is so requested, subject to paragraph (c) below, and shall use
its commercially reasonable efforts to effect registration of such Registrable Securities under the
Securities Act.
(c) If the Piggy-Back Registration relates to an underwritten public offering and the managing
underwriter of such proposed public offering advises in writing that, in its opinion, the amount of
Registrable Securities requested to be included in the Piggy-Back Registration in addition to the
securities being registered by the Company would be greater than the Maximum
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Number of Securities (having the same meaning as defined in Section 2 but replacing the term “Demand
Registration” with “Piggy-Back Registration”), then:
(i) in the event the Company initiated the Piggy-Back Registration, the Company shall
include in such Piggy-Back Registration (A) the securities the Company proposes to register
and (B) the securities of all other selling security holders, including the Holder, to be
included in such Piggy-Back Registration in an amount which together with the securities the
Company proposes to register, shall not exceed the Maximum Number of Securities, such amount
to be allocated among such selling security holders on a pro rata basis (based on the number
of securities of the Company held by each such selling security holder); and
(ii) in the event any holder of Securities of the Company initiated the Piggy-Back
Registration, the Company shall include in such Piggy-Back Registration (A) the securities
such initiating security holder proposes to register, (B) the securities of any other
selling security holders (including the Holder), in an amount which together with the
securities the initiating security holder proposes to register, shall not exceed the Maximum
Number of Securities, such amount to be allocated among such other selling security holders
on a pro rata basis (based on the number of securities of the Company held by each such
selling security holder) and (C) any securities the Company proposes to register, in an
amount which together with the securities the initiating security holder and the other
selling security holders propose to register, shall not exceed the Maximum Number of
Securities.
SECTION 4. Blackout Periods. The Company shall have the right to delay the filing or
effectiveness of a Registration Statement required pursuant to Sections 2 or 3 hereof during no
more than two (2) periods aggregating to not more than 90 days in any twelve-month period (a
“Blackout Period”) in the event that (i) the Company would, in accordance with the advice
of its counsel, be required to disclose in the prospectus information not otherwise then required
by law to be publicly disclosed and (ii) in the judgment of the Company’s Board of Directors, there
is a reasonable likelihood that such disclosure, or any other action to be taken in connection with
the prospectus, would materially and adversely affect or interfere with any financing, acquisition,
merger, disposition of assets (not in the ordinary course of business), corporate reorganization or
other similar transaction in which the Company is engaged or in respect of which the Company
proposes to engage in discussions or negotiations with respect to, or has proposed or taken a
substantial step to commence, or there is an event or state of facts relating to the Company which
is material to the Company the disclosure of which would, in the reasonable judgment of the Company
be adverse to its interests; provided, however, that the Company shall delay during
such Blackout Period the filing or effectiveness of any Registration Statement required pursuant to
the registration rights of the holders of any securities of the Company. The Company shall promptly give the Holder written notice of such determination containing a general statement
of the reasons for such postponement and an approximation of the anticipated delay.
SECTION 5. Registration Procedures. If the Company is required by the provisions of
Section 2 or 3 to use its commercially reasonable efforts to effect the registration of any of its
securities under the Securities Act, the Company will, as expeditiously as possible:
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(a) prepare and file with the Commission a Registration Statement with respect to such
securities and use its commercially reasonable efforts to cause such Registration Statement
promptly to become and remain effective for a period of time required for the disposition of
such Securities by the holders thereof but not to exceed 30 days (except with respect to a
Shelf Registration Statement, which shall remain effective for a period not to exceed 180
days); provided, however, that before filing such Registration Statement or
any amendments thereto (for purposes of this subsection, amendments shall not be deemed to
include any filing that the Company is required to make pursuant to the Exchange Act), the
Company shall furnish the Holder with copies of all documents proposed to be filed, which
documents will be subject to the review of such counsel. The Company shall not be deemed to
have used its commercially reasonable efforts to keep a Registration Statement effective
during the applicable period if it voluntarily takes any action that would result in the
Holder of such Registrable Securities not being able to sell such Registrable Securities
during that period, unless such action is required under applicable law;
(b) prepare and file with the Commission such amendments and supplements to such
Registration Statement and the prospectus used in connection therewith as may be necessary
to keep such Registration Statement effective and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all securities covered by
such Registration Statement until the earlier of such time as all of such securities have
been disposed of in a public offering or the expiration of 30 days (except with respect to
the Shelf Registration Statement, for which such period shall be 90 days);
(c) furnish to such selling security holders such number of conformed copies of the
applicable Registration Statement and each such amendment and supplement thereto (including
in each case all exhibits), and of a summary prospectus or other prospectus, including a
preliminary prospectus, in conformity with the requirements of the Securities Act, and such
other documents, as such selling security holders may reasonably request;
(d) use its commercially reasonable efforts to register or qualify the securities
covered by such Registration Statement under such other securities or blue sky laws of such
jurisdictions within the United States as the Holder shall reasonably request, to keep such
registration or qualification in effect for so long as such Registration Statement remains
in effect, and to take any other action which may be reasonably necessary to enable such
seller to consummate the disposition in such jurisdictions of the securities owned by the
Holder (provided, however, that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business, subject
itself to taxation in or to file a general consent to service of process in any jurisdiction
wherein it would not but for the requirements of this paragraph (d) be obligated to do so;
and provided, further, that the Company shall not be required to qualify
such Registrable Securities in any jurisdiction in which the securities regulatory authority
requires that the Holder submit any shares of its Registrable Securities to the terms,
provisions and restrictions of any escrow, lockup or similar agreement(s) for consent to
sell Registrable Securities in such jurisdiction unless the Holder agrees to do so), and do
such other reasonable acts and things as may be required of it to enable the Holder to
consummate
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the disposition in such jurisdiction of the securities covered by such
Registration Statement;
(e) furnish, at the request of the Holder requesting registration of Registrable
Securities pursuant to Section 2 or 3, if the method of distribution is by means of an
underwriting, on the date that the shares of Registrable Securities are delivered to the
underwriters for sale pursuant to such registration, or if such Registrable Securities are
not being sold through underwriters, on the date that the registration statement with
respect to such shares of Registrable Securities becomes effective, (i) a signed opinion,
dated such date, of the independent legal counsel representing the Company for the purpose
of such registration, addressed to the underwriters, if any, and if such Registrable
Securities are not being sold through underwriters, then to the Holder, as to such matters
as such underwriters or the Holder, as the case may be, may reasonably request and as would
be customary in such a transaction; and (ii) letters dated such date and the date the
offering is priced from the independent registered public accounting firm of the Company,
addressed to the underwriters, if any, and if such Registrable Securities are not being sold
through underwriters, then to the Holder making such request and, if such accountants refuse
to deliver such letters to the Holder, then to the Company (A) stating that they are
independent certified public accountants within the meaning of the Securities Act and that,
in the opinion of such accountants, the financial statements and other financial data of the
Company included in the Registration Statement or the prospectus, or any amendment or
supplement thereto, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act and (B) covering such other financial matters
(including information as to the period ending not more than five Business Days prior to the
date of such letters) with respect to the registration in respect of which such letter is
being given as such underwriters or the Holder, as the case may be, may reasonably request
and as would be customary in such a transaction;
(f) enter into customary agreements (including if the method of distribution is by
means of an underwriting, an underwriting agreement in customary form) and take such other
actions as are reasonably required in order to expedite or facilitate the disposition of
such Registrable Securities;
(g) otherwise use its commercially reasonable efforts to comply with all applicable
rules and regulations of the Commission, and make earnings statements satisfying the
provisions of Section 11(a) of the Securities Act generally available to the Holder no later
than 45 days after the end of any twelve-month period (or 90 days, if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in an underwritten public offering, or (ii)
if not sold to underwriters in such an offering, beginning with the first month of the
Company’s first fiscal quarter commencing after the effective date of the Registration
Statement, which statements shall cover said twelve-month periods;
(h) use its commercially reasonable efforts to cause all such Registrable Securities to
be listed on each securities exchange or quotation system on which the Class A Common Stock
is listed or traded;
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(i) give written notice to the Holder:
(i) when such Registration Statement or any amendment thereto has been filed
with the Commission and when such Registration Statement or any post-effective
amendment thereto has become effective;
(ii) of any request by the Commission for amendments or supplements to such
Registration Statement or the prospectus included therein or for additional
information;
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any proceedings
for that purpose;
(iv) of the receipt by the Company or its legal counsel of any notification
with respect to the suspension of the qualification of any security of the Company
for sale in any jurisdiction or the initiation or threatening of any proceeding for
such purpose; and
(v) of the happening of any event that requires the Company to make changes in
such Registration Statement or the prospectus in order to make the statements
therein not misleading (which notice shall be accompanied by an instruction to
suspend the use of the prospectus until the requisite changes have been made);
(j) use its commercially reasonable efforts to prevent the issuance or obtain the
withdrawal of any order suspending the effectiveness of such Registration Statement at the
earliest possible time;
(k) furnish to the Holder, without charge, at least one copy of such Registration
Statement and any post-effective amendment thereto, including financial statements and
schedules, and, if the Holder so requests in writing, all exhibits (including those, if any,
incorporated by reference);
(l) upon the occurrence of any event contemplated by Section 5(i)(v) above, promptly
prepare a post-effective amendment to such Registration Statement or a supplement to the
related prospectus or file any other required document so that, as thereafter delivered to
the Holder, the prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading. If the
Company notifies the Holder in accordance with Section 5(i)(v) above to suspend the use of
the prospectus until the requisite changes to the prospectus have been made, then the Holder
shall suspend use of such prospectus and use its reasonable efforts to return to the Company
all copies of such prospectus (at the Company’s expense) other than permanent file copies
then in the Holder’s possession, and the period of effectiveness of such Registration
Statement provided for above shall be extended by the number of days from and including the
date of the giving of such notice to the date the Holder shall have received such amended or
supplemented prospectus pursuant to this Section 5(l);
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(m) make reasonably available for inspection by the Holder, any underwriter
participating in any disposition pursuant to such Registration Statement and any attorney,
accountant or other agent retained by such representative or any such underwriter all
relevant financial and other records, pertinent corporate documents and properties of the
Company and cause the Company’s officers, directors and employees to supply all relevant
information reasonably requested by such representative or any such underwriter, attorney,
accountant or agent in connection with the registration; and
(n) use reasonable efforts to procure the cooperation of the Company’s transfer agent
in settling any offering or sale of Registrable Securities, including with respect to the
transfer of physical stock certificates into book-entry form in accordance with any
procedures reasonably requested by the Holder or the underwriters.
It shall be a condition precedent to the obligation of the Company to take any action pursuant
to this Agreement in respect of the Securities which are to be registered at the request of the
Holder that the Holder shall furnish to the Company such information regarding the Securities held
by the Holder and the intended method of disposition thereof as the Company shall reasonably
request and as shall be required in connection with the action taken by the Company.
SECTION 6. Expenses. All expenses incurred in connection with each registration
pursuant to Sections 2 and 3 of this Agreement, excluding underwriters’ discounts and commissions,
but including without limitation all registration, filing and qualification fees, word processing,
duplicating, printers’ and accounting fees (including the expenses of any special audits or
“comfort” letters required by or incident to such performance and compliance), fees of the NASD or
listing fees, messenger and delivery expenses, all fees and expenses of complying with state
securities or blue sky laws, fees and disbursements of counsel for the Company, fees and expenses
of the Company and the underwriters relating to “road show” investor presentations, including the
cost of any aircraft chartered for such purpose, and the fees and disbursements of one counsel for
the Holder, shall be paid by the Company, except that:
(a) all such expenses in connection with any amendment or supplement to a Registration
Statement or prospectus filed more than 30 (or in the case of a Shelf Registration
Statement, 90 days) days after the effective date of such Registration Statement because the Holder has not effected the disposition of the Securities
requested to be registered shall be paid by the Holder;
(b) the Holder shall bear and pay the (i) underwriting commissions and discounts
applicable to securities offered for their account in connection with any registrations,
filings and qualifications made pursuant to this Agreement and (ii) any fees and expenses
incurred in respect of counsel or other advisors to the Holder.
SECTION 7. Rule 144 and Rule 144A Information. (a) With a view to making available
the benefits of certain rules and regulations of the Commission which may at any time permit the
sale of the Registrable Securities to the public without registration, at all times after 90 days
after any Registration Statement covering securities of the Company shall have become effective,
the Company agrees to:
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(i) make and keep public information available, as those terms are understood and
defined in Rule 144 under the Securities Act;
(ii) use its commercially reasonable efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the Securities Act and
the Exchange Act; and
(iii) furnish to the Holder of Registrable Securities forthwith upon request a written
statement by the Company as to its compliance with the reporting requirements of such Rule
144 and of the Securities Act and the Exchange Act, a copy of the most recent annual or
quarterly report of the Company, and such other reports and documents so filed by the
Company as the Holder may reasonably request in availing itself of any rule or regulation of
the Commission allowing the Holder to sell any Registrable Securities without registration.
(b) At all times during which the Company is neither subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, nor exempt from reporting pursuant to Rule 12g3-2(b) under
the Exchange Act, it will provide, upon the written request of the Holder of Registrable Securities
in written form (as promptly as practicable and in any event within 15 Business Days), to any
prospective buyer of such stock designated by the Holder, all information required by Rule
144A(d)(4)(i) of the General Regulations promulgated by the Commission under the Securities Act.
SECTION 8. Indemnification and Contribution.
(a) the Company shall indemnify and hold harmless the Holder, the Holder’s directors and
officers, if any, each person who participates in the offering of such Registrable Securities,
including underwriters (as defined in the Securities Act), and each person, if any, who controls
the Holder or participating person within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which they may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or proceedings in respect thereof) arise out of or are based on any untrue or alleged untrue
statement of any material fact contained in such Registration Statement on the effective date
thereof (including any prospectus filed under Rule 424 under the Securities Act or any amendments
or supplements thereto) or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the statements therein
not misleading, and shall reimburse each the Holder, the Holder’s directors and officers, such
participating person or controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the indemnity agreement contained in this Section 8
shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Company (which consent shall not be
unreasonably withheld); provided, further, that the Company shall not be liable to
the Holder, the Holder’s directors and officers, participating person or controlling person in any
such case for any such loss, claim, damage, liability or action to the extent that it arises out of
or is based upon an untrue statement or alleged untrue statement or omission or alleged omission
made in connection with such Registration Statement, preliminary prospectus, final prospectus or
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amendments or supplements thereto, in reliance upon and in conformity with written information
furnished expressly for use in connection with such registration by any the Holder, the Holder’s
directors and officers, participating person or controlling person. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of the Holder, the
Holder’s directors and officers, participating person or controlling person, and shall survive the
transfer of such securities by the Holder.
(b) The Holder requesting or joining in a registration severally and not jointly shall
indemnify and hold harmless the Company, each of its directors and officers, each person, if any,
who controls the Company within the meaning of the Securities Act, and each agent and any
underwriter for the Company (within the meaning of the Securities Act) against any losses, claims,
damages or liabilities, joint or several, to which the Company or any such director, officer,
controlling person, agent or underwriter may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or proceedings in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of any material fact
contained in such registration statement on the effective date thereof (including any prospectus
filed under Rule 424 under the Securities Act or any amendments or supplements thereto) or arise
out of or are based upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in such registration statement, preliminary or final
prospectus, or amendments or supplements thereto, in reliance upon and in conformity with written
information furnished by or on behalf of the Holder expressly for use in connection with such
registration; and the Holder shall reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, controlling person, agent or underwriter in connection with
investigating or defending any such loss, claim, damage, liability or action; provided,
however, that the indemnity agreement contained in this Section 8(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement
is effected without the consent of the Holder (which consent shall not be unreasonably withheld),
and provided, further, that the liability of the Holder hereunder shall be limited
to the proportion of any such loss, claim, damage, liability or expense which is equal to the proportion that the net proceeds from the sale of the shares sold by the
Holder under such registration statement bears to the total net proceeds from the sale of all
securities sold thereunder, but not in any event to exceed the net proceeds received by the Holder
from the sale of Registrable Securities covered by such registration statement.
(c) If the indemnification provided for in this Section 8 from the indemnifying party is
unavailable to an indemnified party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such indemnified party as
a result of such losses, claims, damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and indemnified parties in
connection with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact, has been made by, or relates
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to information supplied by, such indemnifying party or indemnified parties, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such action. The
amount paid or payable by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or proceeding. If the
allocation provided in this paragraph (c) is not permitted by applicable law, the parties shall
contribute based upon the relevant benefits received by the Company from the initial offering of
the Securities on the one hand and the net proceeds received by the Holder from the sale of
Securities on the other.
The parties hereto agree that it would not be just and equitable if contribution pursuant to
this Section 8(c) were determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(d) Any Person entitled to indemnification hereunder (the “Indemnified Party”) agrees
to give prompt written notice to the indemnifying party (the “Indemnifying Party”) after
the receipt by the Indemnified Party of any written notice of the commencement of any action, suit,
proceeding or investigation or threat thereof made in writing for which the Indemnified Party
intends to claim indemnification or contribution pursuant to this Agreement; provided, that
the failure so to notify the Indemnified Party shall not relieve the Indemnifying Party of any
liability that it may have to the Indemnifying Party hereunder unless such failure is materially
prejudicial to the Indemnifying Party. If notice of commencement of any such action is given to
the Indemnifying Party as above provided, the Indemnifying Party shall be entitled to participate
in and, to the extent it may wish, to assume the defense of such action at its own expense, with
counsel chosen by it and reasonably satisfactory to such Indemnified Party. The Indemnified Party
shall have the right to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be paid by the Indemnified Party unless
(i) the Indemnifying Party agrees to pay the same, (ii) the Indemnifying Party fails to assume the defense of such action, or (iii) the named parties to any such action (including
any impleaded parties) have been advised by such counsel that either (A) representation of such
Indemnified Party and the Indemnifying Party by the same counsel would be inappropriate under
applicable standards of professional conduct or (B) there are one or more legal defenses available
to it which are substantially different from or additional to those available to the Indemnifying
Party. No Indemnifying Party shall be liable for any settlement entered into without its written
consent, which consent shall not be unreasonably withheld.
(e) The agreements contained in this Section 8 shall survive the transfer of the Registered
Securities by the Holder and sale of all the Registrable Securities pursuant to any registration
statement and shall remain in full force and effect, regardless of any investigation made by or on
behalf of the Holder or such director, officer or participating or controlling Person.
SECTION 9. Certain Additional Limitations on Registration Rights. Notwithstanding the
other provisions of this Agreement, the Company shall not be obligated to
15
register the Registrable Securities of the Holder (i) if the Holder or any underwriter of such Registrable Securities shall
fail to furnish to the Company necessary information in respect of the distribution of such
Registrable Securities, or (ii) if such registration involves an underwritten offering, such
Registrable Securities are not included in such underwritten offering on the same terms and
conditions as shall be applicable to the other securities being sold through underwriters in the
registration or the Holder fails to enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwritten offering. In addition, the Holder
agrees not to effect any public sale or distribution of any Registrable Securities or of any
securities convertible into or exchangeable or exercisable for such Registrable Securities,
including a sale pursuant to Rule 144 under the Securities Act and to enter into a customary
lock-up agreement with the managing underwriter for an offering, during the 90-day period beginning
on the effective date of any Demand Registration Statement (initiated by the Holder) or Piggy-Back
Registration Statement or other underwritten offering (initiated by the Company) (except as part of
such registration), and the Company agrees to use its commercially reasonable efforts to cause its
directors and executive officers to enter into a lock-up agreement of the same term, in each case
if and to the extent requested by the managing underwriter for such offering and if the Company and
its directors, executive officers and other significant stockholders enter into similar agreements.
SECTION 10. Limitations on Registration of Other Securities; Representation. From and
after the date of this Agreement, the Company shall not, without the prior written consent of the
Holder, enter into any agreement with any holder or prospective holder of any securities of the
Company giving the holder or prospective holder any registration rights the terms of which are as
or more favorable taken as a whole than the registration rights granted to the Holder hereunder
unless the Company shall also give such rights to the Holder hereunder.
SECTION 11. No Inconsistent Agreements. The Company will not hereafter enter into any agreement with respect to its securities,
which is inconsistent in any material respects with the rights granted to the Holder in this
Agreement.
SECTION 12. Selection of Managing Underwriters. In the event the Holder shall have
requested an underwritten offering, the underwriter or underwriters shall be selected by the
Holder, subject to approval by the Company, which approval shall not be unreasonably withheld or
delayed, provided, (i) that all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such underwriters shall also be
made to and for the benefit of the Holder, (ii) that any or all of the conditions precedent to the
obligations of such underwriters under such underwriting agreement shall be conditions precedent to
the obligations of the Holder, and (iii) that the Holder shall not be required to make any
representations or warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding the Holder, the Registrable Securities of the
Holder, compliance with law and the Holder’s intended method of distribution and any other
representations required by law. Subject to the foregoing, if the Holder proposes to distribute
Registrable Securities through such underwritten offering, it shall enter into an underwriting
agreement in customary form with the underwriter or underwriters. Subject to the provisions of
Section 7(b), if the Holder of Registrable Securities disapproves of the terms of the underwriting,
the Holder may elect to withdraw all its Registrable Securities by written notice to the Company
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and the managing underwriter. The securities so withdrawn shall also be withdrawn from
registration.
SECTION 13. Term of Registration Rights. The rights of the Holder with respect to the
registration rights granted pursuant to this Agreement shall remain in effect, subject to the terms
hereof, so long as there are Registrable Securities or securities which are convertible or
exchangeable for Registrable Securities issued and outstanding.
SECTION 14. Miscellaneous.
(a) Specific Performance. The parties hereto agree that irreparable damage would
occur in the event any provision of the Agreement was not performed in accordance with the terms
hereof and that the parties hereto shall be entitled to specific performance of the terms hereof,
in addition to any other remedy at law or in equity.
(b) Amendments and Waivers. (i) Any provision of this Agreement may be amended or
waived if, and only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by the Company and the Holder or, in the case of a waiver, by the party or parties
against whom the waiver is to be effective.
(ii) No failure or delay by any party in exercising any right, power or privilege hereunder
(other than a failure or delay beyond a period of time specified herein) shall operate as
a waiver thereof and no single or partial exercise thereof shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
(c) Notice Generally. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by courier service, by fax or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be specified by notice given in accordance with this
Section 14(c):
(i) If to the Holder, to:
WebMD Corporation
000 Xxxxx Xxxxx, Xxxxxx 0
Xxxxxxx Xxxx
Xxx Xxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxx
000 Xxxxx Xxxxx, Xxxxxx 0
Xxxxxxx Xxxx
Xxx Xxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxx
(ii) If to the Company, to
or at such other address as may be substituted by notice given as herein provided.
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(d) Successors and Assigns; Third Party Beneficiaries. Holder may, in connection with
a sale or other transfer of Registrable Securities, assign to one or more persons or entities all
or a portion of rights and obligations under this Agreement with respect to those Registrable
Securities and the Company shall cooperate with Holder to provide the benefits of this Agreement to
such assignee; provided, however, that no such assignee shall be or be deemed a party to this
Agreement or a third party beneficiary of any of its terms or have any right to enforce any of its
terms, unless the Company, Holder and the assignee enter into a written agreement on terms and
conditions reasonably satisfactory to each of the Company and Holder (an “Assignment and
Acceptance”) that explicitly makes such assignee a party hereto (consent to entering into an
Assignment and Acceptance not to be unreasonably withheld by the Company). This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their successors and any Person
that becomes a party by entering into an Assignment and Acceptance with the parties hereto. Except
as provided in Section 8, no Person other than the parties hereto and their successors is intended
to be a beneficiary of this Agreement.
(e) Headings. The headings and subheadings in this Agreement are included for
convenience and identification only and are in no way intended to describe, interpret, define or
limit the scope, extent or intent of this Agreement or any provision hereof.
(f) Governing Law; Dispute Resolution.
(i) This Agreement shall be governed by and construed in accordance with the laws of the State
of New York.
(ii) In an effort to resolve informally and amicably any claim or controversy arising out of
or related to this Agreement or the breach, termination, enforcement, interpretation or validity
thereof, Holder and the Company shall notify the other of any differences or dispute hereunder that
requires resolution. Holder and the Company shall each designate an executive officer to
investigate, discuss and seek to settle the matter between them. If settlement cannot be reached
through their efforts within 30 days, or such longer time period as they shall agree upon, either
party may initiate final and binding arbitration, in accordance with Paragraph (iii) of this
Section 14(f) to resolve such matter, which the parties agree are the sole and exclusive procedures
for any such dispute. All offers, promises, conduct and statements, whether oral or written, made
in the course of the settlement discussions contemplated by this Paragraph (ii) by any of the
parties, their agents, employees, experts and attorneys are confidential, privileged and
inadmissible for any purpose, including impeachment, in any arbitration or other proceeding
involving the parties, provided that evidence that is otherwise admissible or discoverable shall
not be rendered inadmissible or non-discoverable as a result of its use in the mediation.
(iii) Any dispute, claim or controversy arising out of or relating to this Agreement or the
breach, termination, enforcement, interpretation or validity thereof, including the determination
of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in
New York, New York before one arbitrator. The arbitration shall be administered by JAMS pursuant
to its Comprehensive Arbitration Rules and Procedures. Judgment on the award may be entered in any
court having jurisdiction. This clause shall not preclude parties from seeking provisional
remedies in aid of arbitration from a court of
18
appropriate jurisdiction. The parties shall share
the costs of the arbitrator and other costs of the arbitration equally and each party shall be
responsible for its own costs and expenses relating to the arbitration, including for fees and
expenses of its attorneys and other professionals that it retains. The arbitrator will have no
authority to award any special, punitive, exemplary, consequential, incidental or indirect losses
or damages and no authority to award a party any amounts for the costs and expenses of the
arbitration or for fees and expenses of attorneys and other professionals retained by a party.
(g) Severability. If any term or other provision of this Agreement is held to be
invalid, illegal or incapable of being enforced by any rule of Law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the transactions is not affected in any manner
materially adverse to any party. Upon a determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as possible in a
mutually acceptable manner in order that the transactions contemplated hereby be consummated as
originally contemplated to the fullest extent possible.
(h) Entire Agreement. This Agreement constitutes the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.
(i) Cumulative Remedies. The rights and remedies provided by this Agreement are
cumulative and the use of any one right or remedy by any party shall not preclude or waive its
right to use any or all other remedies. Said rights and remedies are given in addition to any
other rights the parties may have by law, statute, ordinance or otherwise.
(j) Construction. Each party hereto acknowledges and agrees it has had the
opportunity to draft, review and edit the language of this Agreement and that no presumption for or
against any party arising out of drafting all or any part of this Agreement will be applied in any
dispute relating to, in connection with or involving this Agreement. Accordingly, the parties
hereto hereby waive the benefit of any rule of law or any legal decision that would require, in
cases of uncertainty, that the language of a contract should be interpreted most strongly against
the party who drafted such language.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
| WEBMD HEALTH CORP. | ||||
| By: | ||||
| Name: Title: |
||||
| WEBMD CORPORATION | ||||
| By: | Name: Title: |
|||
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