REGISTRATION RIGHTS AGREEMENT
AGREEMENT, dated as of the 11th day of October, 1996, between
the person whose name and address appear on the signature page attached hereto
(individually a "Holder" or collectively with the holders of the Units issued in
the Offering, each as defined below, the "Holders") and HealthDesk Corporation,
a company incorporated under the laws of the State of California, having its
principal place of business at 0000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, XX 00000
(the "Company").
W I T N E S S E T H:
WHEREAS, simultaneously with the execution and delivery of
this Agreement, the Holders are purchasing from the Company an aggregate of up
to 40 units (the "Units"), each Unit consisting of (i) 10,000 shares (the
"Bridge Shares") of the common stock, par value $.01 per share, of the Company
(the "Common Stock") and (ii) a promissory note of the Company in the principal
amount of $50,000, due and payable upon the earlier to occur of (a) October 11,
1997 (b) the consummation of the initial public offering of the Company's
securities (the "Maturity Date") through Whale Securities Co., L.P. (the
"Placement Agent"), and bearing interest at the initial rate of 9% per annum,
payable semi-annually, in arrears (each, a "Bridge Note"), upon the terms set
forth in the Confidential Private Offering Memorandum of the Company dated
September 24, 1996 (the "Bridge Financing"); and
WHEREAS, each Bridge Note is convertible at the option of the
Holder, in the event it is not paid on or prior to the Maturity Date (or such
earlier date on which the unpaid principal balance of the Bridge Notes are
declared to be or become due and payable), into 20,000, subject to adjustment in
accordance with the terms of the Bridge Note, shares of Common Stock (the
"Conversion Shares"); and
WHEREAS, pursuant to the terms of the Bridge Note, the Company
must issue to the Holder an additional 5,000, subject to adjustment in
accordance with the terms of the Bridge Note, shares of Common Stock on the day
following the Maturity Date (or such earlier date on which the unpaid principal
balance of the Bridge Notes are declared to be or become due and payable) and on
the last day of each successive six-month period after the Maturity Date (or
after such earlier date on which the unpaid principal balance of the Bridge
Notes are declared to be or become due and payable) during which the Bridge Note
is not repaid in full or converted pursuant to the terms thereof (all such
additional shares of Common Stock collectively referred to herein as the
"Additional Shares"); and
WHEREAS, the Company desires to grant to the Holder the
registration rights set forth herein with respect to the Bridge Shares, the
Conversion Shares and the Additional Shares;
NOW, THEREFORE, the parties hereto mutually agree as follows:
1. Mandatory Registration of the Bridge Shares.
(a) The Company will include the Bridge Shares in
either, at the Placement Agent's option: (i) each registration statement filed
by the Company with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended (the "Act") relating to the initial public
offering of the Company's securities (the "IPO") until such a registration
statement is declared effective by the SEC (the "IPO Effective Date") and the
Bridge Shares are publicly tradeable pursuant thereto (all such registration
statements referred to herein as the "IPO Registration Statement"), or (ii) a
registration statement which the Company will prepare and file with the SEC
under the Act within nine months following the IPO Effective Date and which the
Company will use its best efforts to have declared effective by the SEC within
twelve months following the IPO Effective Date so as to permit the public
trading of the Bridge Shares commencing twelve months following the IPO
Effective Date (the "Post-IPO Registration Statement").
(b) The Holders of the Bridge Shares agree that
they will not sell or otherwise transfer any of their Bridge Shares pursuant to
the Proposed IPO Registration Statement, the Post-IPO Registration Statement or
otherwise, without the prior written consent of the Placement Agent, for a
period of eighteen months following the effective date of the Proposed IPO
Registration Statement or such shorter period as the Placement Agent may, in its
sole discretion, determine.
(c) Once a registration statement (either the IPO
Registration Statement or the Post-IPO Registration Statement, depending on
which of the two registration options outlined in paragraph (a) above is chosen
by the Placement Agent) covering to the Bridge Shares pursuant to the provisions
of this Section 1 (the "Mandatory Registration Statement") is declared
effective, the Company will use its best efforts to maintain the effectiveness
of such registration statement until the earlier date to occur (the "Release
Date") of (i) the date that all of the Bridge Shares have been sold pursuant to
the Mandatory Registration Statement, and (ii) the date that the holders of the
Bridge Shares receive an opinion of counsel to the Company that all of the
Bridge Shares, other than securities held by "affiliates" of the Company, as
such term is defined in Rule 144 of the Act, may be freely traded (without
limitation or restriction as to quantity or timing and
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without registration under the Act) pursuant to Rule 144 of the Act or
otherwise. If the Company fails to keep the Mandatory Registration Statement
continuously effective during such period, then the Company shall, promptly upon
the request of the Holders of at least 51% of the unsold Bridge Shares included
therein, use its best efforts to update the Mandatory Registration Statement or
file a new registration statement covering the unsold Bridge Shares, subject to
the terms and provisions hereof, and, in the event the Company fails to do so
within 90 days after receipt of such request, the Company shall issue to the
Holder, on one occasion only, such number of additional shares of Common Stock
as is equal to one-quarter of the number of shares comprising the unsold Bridge
Shares held by such Holder (subject to adjustment for stock splits, stock
dividends or recapitalizations), without further consideration, and the Company
shall be obligated to cause such additional shares, as well as the Bridge Shares
remaining unsold, to be registered promptly under the Act, subject to the terms
and provisions hereof.
2. Registration of the Conversion Shares and the Additional
Shares. Without limiting the provisions of paragraph 1 above, in the event the
Company fails to pay the Bridge Notes in full on or prior to the Maturity Date
(or such earlier date on which the unpaid principal balance of the Bridge Notes
are declared to be or become due and payable), the Company will include in each
registration statement filed with the SEC under the Act after the Maturity Date
(or such earlier date on which the unpaid principal balance of the Bridge Notes
are declared to be or become due and payable) (including any Registration
Statement filed pursuant to paragraph 1 above after the Maturity Date) covering
equity or debt securities of the Company, or any such securities of the Company
held by its shareholders, including any post-effective amendments to any such
registration statements (all such registrations statements and post-effective
amendments referred to herein as the "Post Maturity Date Registration
Statement"), the Conversion Shares and the Additional Shares issued and/or
issuable at the time such Post Maturity Date Registration Statement is filed
(collectively the "Default Shares"), until such date as a Post Maturity Date
Registration Statement covering the Default Shares is declared effective by the
SEC. Once effective, the Company will use its best efforts to maintain the
effectiveness of the Post Maturity Date Registration Statement until the earlier
of (i) the date that all of the Default Shares have been sold, or (ii) the date
that the holders thereof receive an opinion of counsel to the Company that all
of the Default Shares may be freely traded without registration under the Act,
under Rule 144 of the Act or otherwise.
3. Piggyback Registration. If at any time following the first
anniversary of the IPO Effective Date and prior to the Release Date, the Company
proposes to prepare and file a registration statement under the Act with the
SEC, covering equity or debt securities of the Company, or any such securities
of the Company held by its shareholders, it will give written notice of
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its intention to do so by registered mail ("Notice"), at least thirty (30)
business days prior to the filing of each such registration statement, to the
Holders. Upon the written request of a Holder (a "Requesting Holder"), made
within twenty (20) business days after the date of the Notice, that the Company
include any of the Requesting Holder's Bridge Shares and/or Default Shares, as
the case may be, in such proposed registration statement, the Company shall use
its best efforts to cause such registration statement (a "Piggyback Registration
Statement") to be declared effective under the Act by the SEC so as to permit
the public sale of the Requesting Holder's Bridge Shares and/or Default Shares,
as the case may be, pursuant thereto, at the Company's sole cost and expense and
at no cost or expense to the Requesting Holders. Notwithstanding the provisions
of this Section 2 the Company shall have the right, at any time after it shall
have given Notice pursuant to this Section 2 (irrespective of whether any
written request for inclusion of Bridge Shares and/or Default Shares, as the
case may be, shall have already been made), to elect not to file any Piggyback
Registration Statement or to withdraw the same after the filing but prior to the
effective date thereof.
4. Additional Terms.
(a) If any stop order shall be issued by the SEC in
connection with a Mandatory Registration Statement or, following its
effectiveness, a Piggyback Registration Statement (collectively referred to
herein as the "Bridge Registration Statement") the Company will use its best
efforts to obtain the removal of such order. Following the effective date of the
Bridge Registration Statement, the Company shall, upon the request of the
Holder, forthwith supply such reasonable number of copies of the Bridge
Registration Statement, preliminary prospectus and prospectus meeting the
requirements of the Act, and other documents necessary or incidental to the
registration and public offering of the Bridge Shares and/or Default Shares, as
the case may be, as shall be reasonably requested by the Holder to permit the
Holder to make a public distribution of the Holder's Bridge Shares and/or
Default Shares, as the case may be. The Company will use its reasonable efforts
to qualify the Bridge Shares and/or Default Shares, as the case may be, for sale
in such states as the Holders of such securities shall reasonably request,
provided that no such qualification will be required in any jurisdiction where,
solely as a result thereof, the Company would be subject to general service of
process or to taxation or qualification as a foreign corporation doing business
in such jurisdiction. The obligations of the Company hereunder with respect to
the Holder's Bridge Shares and/or Default Shares, as the case may be, are
expressly conditioned on the Holder's furnishing to the Company such appropriate
information concerning the Holder, the Holder's Bridge Shares and/or Default
Shares, as the case may be, and the terms of the Holder's offering of such
securities, as the Company may reasonably request.
(b) The Company shall bear the entire cost and
expense of each registration of the Bridge Shares and/or Default Shares, as the
case may be, provided for herein; provided, however, that the Holder shall be
solely responsible for the fees of any counsel retained by the Holder in
connection with such registration and any transfer taxes or underwriting
discounts, commissions or fees applicable to the Bridge Shares and/or Default
Shares, as the case may be, sold by the Holder pursuant thereto.
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(c) The Company shall indemnify and hold harmless
the Holder and each underwriter, within the meaning of the Act, who may purchase
from or sell for the Holder, any Bridge Shares and/or Default Shares, as the
case may be, from and against any and all losses, claims, damages and
liabilities caused by any untrue statement of a material fact contained in the
Bridge Registration Statement, any other registration statement filed by the
Company under the Act, any post-effective amendment to such registration
statements, or any prospectus included therein required to be filed or furnished
by reason of this Agreement or caused by any omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission based upon
information furnished or required to be furnished in writing to the Company by
the Holder or underwriter expressly for use therein, which indemnification shall
include each person, if any, who controls either the Holder or underwriter
within the meaning of the Act and each officer, director, employee and agent of
the Holder and underwriter; provided, however, that the indemnification in this
paragraph (c) with respect to any prospectus shall not inure to the benefit of
the Holder or underwriter (or to the benefit of any person controlling the
Holder or underwriter) on account of any such loss, claim, damage or liability
arising from the sale of Bridge Shares and/or Default Shares, as the case may
be, by the Holder or the underwriter, if a copy of a subsequent prospectus
correcting the untrue statement or omission in such earlier prospectus was
provided to the Holder or underwriter by the Company prior to the subject sale
and the subsequent Prospectus was not delivered or sent by the Holder or
underwriter to the purchaser prior to such sale.
(d) The Holder or underwriter or other person, as
the case may be, shall indemnify the Company, its directors, each officer
signing the Bridge Registration Statement and each person, if any, who controls
the Company within the meaning of the Act, from and against any and all losses,
claims, damages and liabilities caused by any untrue statement of a material
fact contained in the Bridge Registration Statement, any registration statement
or any prospectus required to be filed or furnished by reason of this Agreement
or caused by any omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, insofar as
such losses, claims, damages or liabilities are caused by any untrue statement
or omission based upon information furnished in writing to the Company by the
Holder or underwriter expressly for use therein.
(e) If for any reason the indemnification provided
for in the preceding subparagraph is held by a court of competent jurisdiction
to be unavailable to an indemnified party with respect to any loss, claim,
damage, liability or expense referred to therein, then the indemnifying party,
in lieu of indemnifying such indemnified party thereunder, shall contribute to
the amount paid or payable by the indemnified party as a result of such loss,
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claim, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by the indemnified party and the
indemnifying party, but also the relative fault of the indemnified party and the
indemnifying party, as well as any other relevant equitable considerations.
(f) Neither the filing of a Bridge Registration
Statement by the Company pursuant to this Agreement nor the making of any
request for prospectuses by the Holder shall impose upon the Holder any
obligation to sell the Holder's Bridge Shares and/or Default Shares, as the case
may be.
(g) The Holder, upon receipt of notice from the
Company that an event has occurred which requires a post-effective amendment to
the Bridge Registration Statement or a supplement to the prospectus included
therein, shall promptly discontinue the sale of Bridge Shares and/or Default
Shares, as the case may be, pursuant to such registration statement until the
Holder receives a copy of the amended Bridge Registration Statement or
supplemented prospectus from the Company, which the Company shall provide as
soon as practicable after such notice.
5. Governing Law.
(a) The Bridge Shares and/or Default Shares, as the
case may be, are being, and will be, delivered in New York. This Agreement shall
be deemed to have been made and delivered in the State of New York and shall be
governed as to validity, interpretation, construction, effect and in all other
respects by the internal laws of the State of New York.
(b) The Company and the Holder each (i) agrees that
any legal suit, action or proceeding arising out of or relating to this
Agreement, or any other agreement entered into between the Company and the
Holder pursuant to the Bridge Financing or the Bridge Registration Statement
shall be instituted exclusively in the New York State Supreme Court, County of
New York, or in the United States District Court for the Southern District of
New York, (ii) waives any objection which the Company or such Holder may have
now or hereafter to the venue of any such suit, action or proceeding, and (iii)
irrevocably consents to the jurisdiction of the New York State Supreme Court,
County of New York and the United States District Court for the Southern
District of New York in any such suit, action or proceeding. The Company and the
Holder each further agrees to accept and acknowledge service of any and all
process which may be served in any such suit, action or proceeding in the New
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York State Supreme Court, County of New York or in the United States District
Court for the Southern District of New York and agrees that service of process
upon the Company or the Holder mailed by certified mail to the Company at the
address set forth above, in the case of the Company, and to the Holder's
address, in the case of the Holder, shall be deemed in every respect effective
service of process upon the Company or the Holder, as the case may be, in any
suit, action or proceeding.
6. Amendment. This Agreement may only be amended by a
written instrument executed by the Company and the Holder.
7. Entire Agreement. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject
matter hereof, and supersedes all prior agreements and
understandings of the parties, oral and written, with respect to
the subject matter hereof.
8. Execution in Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the
same document.
9. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed duly given when
delivered by hand or five days after such notice is mailed by registered or
certified mail, postage prepaid, return receipt requested, as follows:
If to the Holder, to his or her address set forth on the
signature page of this Agreement.
If to the Company, to the address set forth on the first page
of this Agreement.
10. Binding Effect; Benefits. The Holder may not assign his or
her rights hereunder. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their respective heirs, legal
representatives and successors. Nothing herein contained, express or implied, is
intended to confer upon any person other than the parties hereto and their
respective heirs, legal representatives and successors, any rights or remedies
under or by reason of this Agreement.
11. Headings. The headings contained herein are for the
sole purpose of convenience of reference, and shall not in any way
limit or affect the meaning or interpretation of any of the terms
or provisions of this Agreement.
12. Severability. Any provision of this Agreement which
is held by a court of competent jurisdiction to be prohibited or unenforceable
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in any jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction.
IN WITNESS WHEREOF, this Agreement has been executed
and delivered by the parties hereto as of the date first above
written.
HEALTHDESK CORPORATION
By:________________________________
Name:
Title:
HOLDER:
__________________________________
Signature
__________________________________
Print Name
Address of Holder:
__________________________________
__________________________________
__________________________________
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