WARRANT AGREEMENT dated as of __________, 1997 between HealthDesk
Corporation, a California corporation (the "Company"), and Whale Securities Co.,
L.P. (hereinafter referred to as the "Underwriter").
W I T N E S S E T H:
WHEREAS, the Company proposes to issue to the Underwriter warrants (the
"Warrants") to purchase up to 180,000 (as such number may be adjusted from time
to time pursuant to Article 8 of this Warrant Agreement) shares (the "Shares")
of Common Stock, no par value (the "Common Stock"), of the Company, and up to
180,000 (as such number may be adjusted from time to time pursuant to Article 8
of this Warrant Agreement) Common Stock purchase warrants (the "Underlying
Warrants"); and
WHEREAS, the Underwriter has agreed, pursuant to the underwriting
agreement (the "Underwriting Agreement") dated _____________, 1997 between the
Underwriter and the Company, to act as the underwriter in connection with the
Company's proposed public offering (the "Public Offering") of 1,800,000 shares
of Common Stock (the "Public Shares") at an initial public offering price of
$5.00 per Public Share and 1,800,000 warrants (the "Public Warrants") at an
initial public offering price of $.10 per Public Warrant; and
WHEREAS, the Warrants issued pursuant to this Agreement are being
issued by the Company to the Underwriter or to its designees who are directors,
officers and partners of the Underwriter or to members of the selling group
participating in the distribution of the Public Shares and Public Warrants to
the public in the Public Offering and/or their respective directors, officers or
partners (collectively, the "Designees"), in consideration for, and as part of
the Underwriter's compensation in connection with, the Underwriter acting as the
Underwriter pursuant to the Underwriting Agreement;
NOW, THEREFORE, in consideration of the premises, the payment by the
Underwriter or its designees to the Company of ONE HUNDRED NINETY EIGHT DOLLARS
($198), the agreements herein set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Grant.
The Underwriter and/or the Designees are hereby granted the right to purchase,
at any time from _____________, 1997 until 5:00 P.M., New York time, on
_________, 2002 (the "Warrant Exercise Term"), up to 180,000 fully-paid and
non-assessable Shares at an initial exercise price (subject to adjustment as
provided in Article 6 hereof) of $6.60 per Share and up to 180,000 Underlying
Warrants at an initial exercise price (subject to adjustment as provided in
Article 6 hereof) of $.132 per Underlying Warrant. The Underlying Warrants are
each exercisable to purchase are fully-paid and non-assessable share of Common
Stock at a price of $8.25 per share (the "Underlying Warrant Shares"). The
Underlying Warrants are exercisable at any time until 5:00 P.M., New York
City time on ________, 2002. The Holder may purchase, upon exercise of this
Warrant, either the Shares or the Underlying Warrants or both. Except as
provided in Article 13 hereof, the Shares and the Underlying Warrants are in all
respects identical to the Public Shares and Public Warrants being sold to the
public pursuant to the terms and provisions of the Underwriting Agreement.
2. Warrant Certificates.
The warrant certificates delivered and to be delivered pursuant to this
Agreement (the "Warrant Certificates") shall be, for the Warrants exercisable
for the purchase of Underlying Shares, in the form set forth in Exhibit A
attached hereto and made a part hereof, and, for the Warrants exercisable for
the purchase of Underlying Warrants, in the form of Exhibit B attached hereto
and made a part hereof, each with such appropriate insertions, omissions,
substitutions and other variations as required or permitted by this Agreement.
3. Exercise of Warrant.
3.1. Cash Exercise. The Warrants initially are exercisable at a price
of $6.60 per Share purchased and $.132 per Underlying Warrant purchased, payable
in cash, wire transfer, or by check to the order of the Company, or any
combination thereof, subject to adjustment as provided in Article 8 hereof. Upon
surrender of the Warrant Certificate(s) with the annexed Form of Election to
Purchase duly executed, together with payment of the Exercise Price (as
hereinafter defined) for the Shares and Underlying Warrants purchased, at the
Company's principal offices in California (currently located at 0000 Xxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000) the registered holder of a
Warrant Certificate ("Holder" or "Holders") shall be entitled to receive a
certificate or certificates for the Shares so purchased and/or a certificate or
certificates for the Underlying Warrants so purchased. The purchase rights
represented by each Warrant Certificate are exercisable at the option of the
Holder hereof, in whole or in part (but not as to fractional Shares or
fractional Underlying Warrants). In the case of the purchase of less than all
Shares or Underlying Warrants purchasable under any Warrant Certificate, the
Company shall cancel said Warrant Certificate upon the surrender thereof and
shall execute and deliver a new Warrant Certificate of like tenor for the
balance of the Shares or Underlying Warrants purchasable thereunder.
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3.2. Cashless Exercise. At any time during the Warrant Exercise Term,
the Holder may, at the Holder's option, exchange, in whole or in part, the
Warrants represented by such Holder's Warrant Certificate which are exercisable
for the purchase of Shares (a "Warrant Exchange"), into the number of Shares and
Underlying Warrants determined in accordance with this Section 3.2, by
surrendering such Warrant Certificate at the principal office of the Company or
at the office of its transfer agent, accompanied by a notice stating such
Holder's intent to effect such exchange, the number of Warrants to be so
exchanged and the date on which the Holder requests that such Warrant Exchange
occur (the "Notice of Exchange"). The Warrant Exchange shall take place on the
date specified in the Notice of Exchange or, if later, the date the Notice of
Exchange is received by the Company (the "Exchange Date"). Certificates for the
Shares issuable upon such Warrant Exchange and, if applicable, a new Warrant
Certificate of like tenor representing the Warrants which were subject to the
surrendered Warrant Certificate and not included in the Warrant Exchange, shall
be issued as of the Exchange Date and delivered to the Holder within three (3)
business days following the Exchange Date. In connection with any Warrant
Exchange, the Holder shall be entitled to subscribe for and acquire (i) the
number of Shares (rounded to the next highest integer) which would, but for such
Warrant Exchange, than be issuable pursuant to the provisions of Section 3.1
above upon the exercise of the Warrants specified by the Holder in its Notice of
Exchange (the "Total Share Number") less (ii) the number of Shares equal to the
quotient obtained by dividing (a) the product of the Total Share Number and the
existing Exercise Price per Share (as hereinafter defined) by (b) the Fair
Market Price (as hereinafter defined) of a Public Share on the day preceding the
Warrant Exchange. "Fair Market Price" at any date shall be deemed to be the last
reported sale price, or, in case no such reported sales takes place on such day,
the average of the last reported sale prices for the last five (5) trading days,
in either case as officially reported by the principal securities exchange on
which the Common Stock is listed or admitted to trading or as reported in the
NASDAQ National Market System, or, if the Common Stock is not listed or admitted
to trading on any national securities exchange or quoted on the NASDAQ National
Market System, the average of the last reported closing bid price as furnished
by (i) the National Association of Securities Dealers, Inc. through NASDAQ or
(ii) a similar organization if NASDAQ is no longer reporting such information in
either case averaged over the five (5) trading days preceding the Warrant
Exchange.
4. Issuance of Certificates.
Upon the exercise of the Warrants, the issuance of certificates for
the Shares purchased and certificates for the Underlying Warrants purchased, and
upon the exercise of the Underlying Warrants, the issuance of certificates for
the Underlying Warrant Shares purchased, shall be made forthwith (and in any
event within three (3) business days thereafter) without charge to the Holder
thereof including, without limitation, any tax which may be payable in respect
of the issuance thereof, and such certificates shall (subject to the provisions
of Article 5 hereof) be issued in the name of, or in such names as may be
directed by, the Holder thereof; provided, however, that the Company shall not
be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any such certificates in a name other
than that of the Holder and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
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The Warrant Certificates and the certificates representing the Shares
and the Underlying Warrants shall be executed on behalf of the Company by the
manual or facsimile signature of the present or any future Chairman or Vice
Chairman of the Board of Directors or Chief Executive Officer , President or
Vice President of the Company under its corporate seal reproduced thereon,
attested to by the manual or facsimile signature of the present or any future
Secretary or Assistant Secretary of the Company. Warrant Certificates and
certificates representing the Underlying Warrants shall be dated the date of
execution by the Company upon initial issuance, division, exchange, substitution
or transfer.
Upon exercise, in part or in whole, of the Warrants, certificates
representing the Shares and the Underlying Warrants purchased, and upon
exercise, in whole or in part, of the Underlying Warrants, certificates
representing the Underlying Warrant Shares purchased (collectively, the "Warrant
Securities"), shall bear a legend substantially similar to the following:
"The securities represented by this certificate and the other
securities issuable upon exercise thereof have not been registered
for purposes of public distribution under the Securities Act of 1933,
as amended (the "Act"), and may not be offered or sold except (i)
pursuant to an effective registration statement under the Act, (ii)
to the extent applicable, pursuant to Rule 144 under the Act (or any
similar rule under such Act relating to the disposition of
securities), or (iii) upon the delivery by the holder to the Company
of an opinion of counsel, reasonably satisfactory to counsel to the
Company, stating that an exemption from registration under such Act
is available."
5. Restriction on Transfer of Warrants.
The Holder, by the Holder's acceptance thereof, covenants and agrees
that the Warrants are being acquired as an investment and not with a view to the
distribution thereof, and that the Warrants may not be sold, transferred,
assigned, hypothecated or otherwise disposed of, in whole or in part, for a
period of one (1) year from the date hereof, except to the Underwriter or to the
Designees. Any such transfer, assignment, hypothecation or other disposition
shall be in a manner which complies with applicable state and federal securities
laws and regulations.
6. Price.
6.1. Initial and Adjusted Exercise Price. The initial exercise
price of each Warrant shall be $6.60 per Share and $.132 per Underlying Warrant.
The adjusted exercise price per Share and the adjusted exercise price per
Underlying Warrant shall be the prices which shall result from time to time from
any and all adjustments of the initial exercise price per Share or per
Underlying Warrant, as the case may be, in accordance with the provisions of
Article 8 hereof.
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6.2. Exercise Price. The term "Exercise Price" herein shall mean
the initial exercise price or the adjusted exercise price, depending upon the
context.
7. Registration Rights.
7.1. Registration Under the Securities Act of 1933. None of the
Warrants, the Shares, the Underlying Warrants, or the Underlying Warrant Shares
have been registered for purposes of public distribution under the Securities
Act of 1933, as amended (the "Act").
7.2. Registrable Securities. As used herein the term "Registrable
Security" means each of the Warrants, the Shares, the Underlying Warrants, the
Underlying Warrant Shares and any shares of Common Stock issued upon any stock
split or stock dividend in respect of such Shares or Underlying Warrant Shares;
provided, however, that with respect to any particular Registrable Security,
such security shall cease to be a Registrable Security when, as of the date of
determination, (i) it has been effectively registered under the Act and disposed
of pursuant thereto, (ii) registration under the Act is no longer required for
subsequent public distribution of such security, or (iii) it has ceased to be
outstanding. The term "Registrable Securities" means any and/or all of the
securities falling within the foregoing definition of a "Registrable Security."
In the event of any merger, reorganization, consolidation, recapitalization or
other change in corporate structure affecting the Common Stock, such adjustment
shall be made in the definition of "Registrable Security" as is appropriate in
order to prevent any dilution or enlargement of the rights granted pursuant to
this Article 7.
7.3. Piggyback Registration. If (but without any obligation of the
Company to do so), at any time during the seven years following the effective
date of the Public Offering, the Company proposes to prepare and file one or
more post-effective amendments to the registration statement filed in connection
with the Public Offering or any new registration statement or post-effective
amendments thereto covering equity or debt securities of the Company, or any
such securities of the Company held by its shareholders (in any such case, other
than in connection with a registration relating solely to a transaction pursuant
to Rule 145 or a registration relating to employee benefit plans on Form S-8 or
successor form) (for purposes of this Article 7, collectively, the "Registration
Statement"), it will give written notice of its intention to do so by registered
mail ("Notice"), at least thirty (30) days prior to the filing of each such
Registration Statement, to all holders of the Registrable Securities. Upon the
written request of such a holder (a "Requesting Holder"), made within twenty
(20) days after receipt of the Notice, that the Company include any of the
Requesting Holder's Registrable Securities in the proposed Registration
Statement, the Company shall, as to each such Requesting Holder, use its best
efforts to effect the registration under the Act of the Registrable Securities
which it has been so requested to register ("Piggyback Registration"), at the
Company's sole cost and expense and at no cost or expense to the Requesting
Holders (except as provided in Section 7.5(b) hereof). Notwithstanding the
provisions of this Section 7.3, the Company shall have the right at any time
after it shall have given written notice pursuant to this Section 7.3
(irrespective of whether any written request for inclusion of Registrable
Securities shall have already been made by a Requesting Holder or received by
the Company) to elect not to file any such proposed Registration Statement, or
to withdraw the same after the filing but prior to the effective date thereof.
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7.4. Demand Registration.
(a) At any time during the Warrant Exercise Term, any
"Majority Holder" (as such term is defined in Section 7.4(d) below) of the
Registrable Securities shall have the right (which right is in addition to the
piggyback registration rights provided for under Section 7.3 hereof),
exercisable by written notice to the Company (the "Demand Registration
Request"), to have the Company prepare and file with the Commission on one
occasion, at the sole expense of the Company (except as provided in Section
7.5(b) hereof), a Registration Statement and such other documents, including a
prospectus, as may be necessary (in the opinion of both counsel for the Company
and counsel for such Majority Holder) in order to comply with the provisions of
the Act, so as to permit a public offering and sale of the Registrable
Securities by the holders thereof; provided that the Company shall not be
obligated to effect any such registration if the Company shall furnish to the
Majority Holder a certificate signed by the President of the Company stating
that in the good faith judgment of the Board of Directors of the Company, it is
currently entering into a transaction for which a Form 8-K, including financial
statements, will need to be filed with the Commission, in which event the
Company shall have the right to defer the filing of the registrations statement
for a period of not more than ninety (90) days after receipt of the request of
the Majority Holder under this Section 7.4(a). The Company shall use its best
efforts to cause the Registration Statement to become effective under the Act,
so as to permit a public offering and sale of the Registrable Securities by the
holders thereof. Once effective, the Company will use its best efforts to
maintain the effectiveness of the Registration Statement until the earlier of
(i) the date that all of the Registrable Securities have been sold or (ii) the
date the holders thereof receive an opinion of counsel to the Company that all
of the Registrable Securities may be freely traded without registration under
the Act, under Rule 144(k) promulgated under the Act or otherwise.
(b) The Company covenants and agrees to give written notice
of any Demand Registration Request to all holders of the Registrable Securities
within ten (10) days from the date of the Company's receipt of any such Demand
Registration Request. After receiving notice from the Company as provided in
this Section 7.4(b), holders of Registrable Securities may request the Company
to include their Registrable Securities in the Registration Statement to be
filed pursuant to Section 7.4(a) hereof by notifying the Company of their
decision to have such securities included within ten (10) days of their receipt
of the Company's notice.
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(c) The term "Majority Holder" as used in Section 7.4 hereof
shall mean any holder or any combination of holders of Registrable Securities,
if included in such holders' Registrable Securities are that aggregate number of
shares of Common Stock (including Shares already issued, Shares issuable
pursuant to the exercise of outstanding Warrants, Underlying Warrant Shares
already issued and Underlying Warrant Shares issuable pursuant to the exercise
of outstanding Underlying Warrants) as would constitute a majority of the
aggregate number of shares of Common Stock (including Shares already issued,
Shares issuable pursuant to the exercise of outstanding Warrants, Underlying
Warrant Shares already issued and Underlying Warrant Shares issuable pursuant to
the exercise of outstanding Underlying Warrants) included in all the Registrable
Securities.
7.5. Covenants of the Company With Respect to Registration. The
Company covenants and agrees as follows:
(a) In connection with any registration under Section 7.4
hereof, the Company shall file the Registration Statement as expeditiously as
possible, but in any event no later than thirty (30) days following receipt of
any demand therefor, shall use its best efforts to have any such Registration
Statement declared effective at the earliest possible time, and shall furnish
each Holder such number of prospectuses as shall reasonably be requested.
(b) The Company shall pay all costs, fees and expenses (other
than underwriting fees, discounts and nonaccountable expense allowance
applicable to the Registrable Securities and fees and expenses of counsel
retained by the Holders) in connection with all Registration Statements filed
pursuant to Sections 7.3 and 7.4(a) hereof including, without limitation, the
Company's legal and accounting fees, printing expenses, and blue sky fees and
expenses.
(c) The Company will take all necessary action which may be
required in qualifying or registering the Registrable Securities included in the
Registration Statement, for offering and sale under the securities or blue sky
laws of such states as are reasonably requested by the holders of such
securities.
(d) The Company shall indemnify any holder of the Registrable
Securities to be sold pursuant to any Registration Statement and any underwriter
or person deemed to be an underwriter under the Act and each person, if any, who
controls such Holder or underwriter or person deemed to be an underwriter within
the meaning of Section 15 of the Act or Section 20(a) of the Securities Exchange
Act of 1934, as amended ("Exchange Act"), against all loss, claim, damage,
expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which any
of them may become subject under the Act, the Exchange Act or otherwise, arising
from such Registration Statement to the same extent and with the same effect as
the provisions pursuant to which the Company has agreed to indemnify the
Underwriter as set forth in Section 7 of the Underwriting Agreement and to
provide for just and equitable contribution as set forth in Section 8 of the
Underwriting Agreement.
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(e) Any Holder of Registrable Securities to be sold pursuant
to a Registration Statement, and such Holder's successors and assigns, shall
severally, and not jointly, indemnify, the Company, its officers and directors
and each person, if any, who controls the Company within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, against all loss, claim,
damage or expense or liability (including all expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information furnished by or on behalf of such Holder, or such Holder's
successors or assigns, for inclusion in such Registration Statement to the same
extent and with the same effect as the provisions pursuant to which the
Underwriter has agreed to indemnify the Company as set forth in Section 7 of the
Underwriting Agreement and to provide for just and equitable contribution as set
forth in Section 8 of the Underwriting Agreement.
(f) Nothing contained in this Agreement shall be construed as
requiring any holder to exercise the Warrants or the Underlying Warrants held by
such Holder prior to the initial filing of any registration statement or the
effectiveness thereof.
(g) The Company shall not permit the inclusion of any
securities other than the Registrable Securities to be included in any
Registration Statement filed pursuant to Section 7.4 hereof, without the prior
written consent of the Majority Holders, which consent shall not be unreasonably
withheld.
(h) The Company shall promptly deliver copies of all
correspondence between the Commission and the Company, its counsel or auditors
and all memoranda relating to discussions with the Commission or its staff with
respect to the Registration Statement to each Holder of Registrable Securities
included for such registration in such Registration Statement pursuant to
Section 7.3 or Section 7.4 hereof that requests such correspondence and
memoranda and to the managing underwriter, if any, of the offering in connection
with which such Holder's Registrable Securities are being registered and shall
permit each Holder of Registrable Securities and such underwriter to do such
reasonable investigation, upon reasonable advance notice, with respect to
information contained in or omitted from the Registration Statement as it deems
reasonably necessary to comply with applicable securities laws or rules of the
National Association of Securities Dealers, Inc. Such investigation shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors, all to such
reasonable extent and at such reasonable times as any such Holder or underwriter
shall reasonably request.
-8-
8. Adjustments of Exercise Price and Number of Securities. The
following adjustments apply to the Exercise Price of the Warrants with respect
to the Shares and the number of Shares purchasable upon exercise of the
Warrants. In the event the Exercise Price per Share and/or the number of Shares
so purchasable is adjusted, then the Exercise Price of the Warrants relating to
the Underlying Warrants and the number of underlying Warrants purchasable
hereunder shall be adjusted in the same proportion.
8.1. Computation of Adjusted Price. In case the Company shall at
any time after the date hereof pay a dividend in shares of Common Stock or make
a distribution in shares of Common Stock, then upon such dividend or
distribution, the Exercise Price in effect immediately prior to such dividend or
distribution shall forthwith be reduced to a price determined by dividing:
(a) an amount equal to the total number of shares of Common
Stock outstanding immediately prior to such dividend or distribution multiplied
by the Exercise Price in effect immediately prior to such dividend or
distribution, by
(b) the total number of shares of Common Stock outstanding
immediately after such issuance or sale.
For the purposes of any computation to be made in accordance
with the provisions of this Section 8.1, the Common Stock issuable by way of
dividend or other distribution on any stock of the Company shall be deemed to
have been issued immediately after the opening of business on the date following
the date fixed for the determination of shareholders entitled to receive such
dividend or other distribution.
8.2. Subdivision and Combination. In case the Company shall at any
time subdivide or combine the outstanding shares of Common Stock, the Exercise
Price shall forthwith be proportionately decreased in the case of subdivision or
increased in the case of combination.
8.3. Adjustment in Number of Securities. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Article 8, the number of
Shares issuable upon the exercise of each Warrant shall be adjusted to the
nearest full number by multiplying a number equal to the Exercise Price in
effect immediately prior to such adjustment by the number of Shares issuable
upon exercise of the Warrants immediately prior to such adjustment and dividing
the product so obtained by the Exercise Price, adjusted as provided for in
Sections 8.1 and 8.2 hereof, provided, however, that if an event occurs that
results in an adjustment of the number and/or price of the shares of Common
Stock issuable upon exercise of the Public Warrants pursuant to Section 9 of the
Warrant Agreement by and among the Company, the Underwriter and American Stock
Transfer and Trust Company dated as of ___________, 1997 ("Public Warrant
Agreement"), resulting in automatic adjustment in the number and/or price of the
Underlying Warrant Shares issuable upon exercise of the Underlying Warrants
pursuant to Section 8.5 hereof, then the adjustment provided for in this Section
8.3 shall not, in such instance, result in any further adjustment in the
aggregate number of shares of Common Stock ultimately issuable upon exercise of
the Underlying Warrants.
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8.4. Reclassification, Consolidation, Merger, etc. In case of any
reclassification or change of the outstanding shares of Common Stock (other than
a change in par value to no par value, or from no par value to par value, or as
a result of a subdivision or combination), or in the case of any consolidation
of the Company with, or merger of the Company into, another corporation (other
than a consolidation or merger in which the Company is the surviving corporation
and which does not result in any reclassification or change of the outstanding
shares of Common Stock, except a change as a result of a subdivision or
combination of such shares or a change in par value, as aforesaid), or in the
case of a sale or conveyance to another corporation of the property of the
Company as an entirety, the Holders shall thereafter have the right to purchase
the kind and number of shares of stock and other securities and property
receivable upon such reclassification, change, consolidation, merger, sale or
conveyance as if the Holders were the owners of both the Shares and the
Underlying Warrant Shares immediately prior to any such events, at a price equal
to the product of (x) the number of shares of Common Stock issuable upon
exercise of the Holders' Warrants and the Underlying Warrants and (y) the
exercise prices for the Warrants and the Underlying Warrants in effect
immediately prior to the record date for such reclassification, change,
consolidation, merger, sale or conveyance as if such Holders had exercised the
Warrants and the Underlying Warrants.
8.5. Determination of Outstanding Common Shares. The number of
Common Shares at any one time outstanding shall include the aggregate number of
shares issued and the aggregate number of shares issuable upon the exercise of
options, rights, warrants and upon the conversion or exchange of convertible or
exchangeable securities.
8.6. Adjustment of Underlying Warrants' Exercise Price and
Securities Issuable Upon Exercise of Underlying Warrants. With respect to any of
the Underlying Warrants, whether or not the Warrants have been exercised and
whether or not the Warrants are issued and outstanding, the exercise price for,
and the number of, Underlying Warrant Shares issuable upon exercise of the
Underlying Warrants shall be automatically adjusted in accordance with Section 9
of the Public Warrant Agreement, upon the occurrence of any of the events
described therein. Thereafter, until the next such adjustment or until otherwise
adjusted in accordance with this Section 8, the Underlying Warrants shall be
exercisable at such adjusted exercise price and for such adjusted number of
Underlying Warrant Shares.
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8.7. Dividends and Other Distributions with Respect to Outstanding
Securities. In the event that the Company shall at any time prior to the
exercise of all Warrants make any distribution of its assets to holders of its
Common Stock as a liquidating or a partial liquidating dividend, then the holder
of Warrants who exercises its Warrants after the record date for the
determination of those holders of Common Stock entitled to such distribution of
assets as a liquidating or partial liquidating dividend shall be entitled to
receive for the Exercise Price per Warrant, in addition to each share of Common
Stock, the amount of such distribution (or, at the option of the Company, a sum
equal to the value of any such assets at the time of such distribution as
determined by the Board of Directors of the Company in good faith) which would
have been payable to such holder had he been the holder of record of the Common
Stock receivable upon exercise of his Warrant on the record date for the
determination of those entitled to such distribution. At the time of any such
dividend or distribution, the Company shall make appropriate reserves to ensure
the timely performance of the provisions of this Subsection 8.7.
8.8. Subscription Rights for Shares of Common Stock or Other
Securities. In the case that the Company or an affiliate of the Company shall at
any time after the date hereof and prior to the exercise of all the Warrants
issue any rights, warrants or options to subscribe for shares of Common Stock or
any other securities of the Company or of such affiliate to all the shareholders
of the Company, the Holders of unexercised Warrants on the record date set by
the Company or such affiliate in connection with such issuance of rights,
warrants or options shall be entitled, in addition to the shares of Common Stock
or other securities receivable upon the exercise of the Warrants, to receive
such rights, warrants or options shall be entitled, in addition to the shares of
Common Stock or other securities receivable upon the exercise of the Warrants,
to receive such rights at the time such rights, warrants or options that such
Holders would have been entitled to receive had they been, on such record date,
the holders of record of the number of whole shares of Common Stock then
issuable upon exercise of their outstanding Warrants (assuming for purposes of
this Section 8.8), that the exercise of the Warrants is permissible immediately
upon issuance).
9. Exchange and Replacement of Warrant Certificates.
Each Warrant Certificate is exchangeable without expense, upon the
surrender thereof by the Holder at the principal executive office of the
Company, for a new Warrant Certificate of like tenor and date representing in
the aggregate the right to purchase the same number of securities in such
denominations as shall be designated by the Holder thereof at the time of such
surrender.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of any Warrant Certificate, and,
in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the Warrant
Certificate, if mutilated, the Company will make and deliver a new Warrant
Certificate of like tenor, in lieu thereof.
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10. Elimination of Fractional Interests.
The Company shall not be required to issue certificates representing
fractions of Shares or fractions of Underlying Warrants upon the exercise of the
Warrants, nor shall it be required to issue scrip or pay cash in lieu of
fractional interests, it being the intent of the parties that all fractional
interests shall be eliminated by rounding any fraction up to the nearest whole
number of Shares and Underlying Warrants.
11. Reservation and Listing of Securities.
The Company shall, during the period the Warrants are exercisable,
reserve and keep available out of its authorized shares of Common Stock, solely
for the purpose of issuance upon the exercise of the Warrants and the Underlying
Warrants, such number of shares of Common Stock as shall be issuable upon the
exercise thereof. The Company covenants and agrees that, upon exercise of the
Warrants and assuming receipt of the payment of the Exercise Price therefor, all
Shares issuable upon such exercise shall be duly and validly issued, fully paid,
non-assessable and not subject to the preemptive rights of any shareholder. The
Company further covenants and agrees that upon exercise of the Underlying
Warrants and payment of the respective Underlying Warrant exercise price
therefor, all Underlying Warrant Shares issuable upon such exercise shall be
duly and validly issued, fully paid, non-assessable and not subject to the
preemptive rights of any shareholder. As long as the Warrants shall be
outstanding, the Company shall use its best efforts to cause all shares of
Common Stock issuable upon the exercise of the Warrants and the Underlying
Warrants and all Underlying Warrants to be listed on or quoted by NASDAQ or
listed on such national securities exchange, in the event the Common Stock is
listed on a national securities exchange.
12. Notices to Warrant Holders.
Nothing contained in this Agreement shall be construed as conferring
upon the Holder or Holders the right to vote or to consent or to receive notice
as a shareholder in respect of any meetings of shareholders for the election of
directors or any other matter, or as having any rights whatsoever as a
shareholder of the Company. If, however, at any time prior to the expiration of
the Warrants and their exercise, any of the following events shall occur:
(a) the Company shall take a record of the holders of its shares
of Common Stock for the purpose of entitling them to receive a
dividend or distribution payable otherwise than in cash, or a cash
dividend or distribution payable otherwise than out of current or
retained earnings, as indicated by the accounting treatment of such
dividend or distribution on the books of the Company; or
-12-
(b) the Company shall offer to all the holders of its Common
Stock any additional shares of capital stock of the Company or
securities convertible into or exchangeable for shares of capital
stock of the Company, or any option, right or warrant to subscribe
therefor; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale
of all or substantially all of its property, assets and business as
an entirety shall be proposed; or
(d) reclassification or change of the outstanding shares of
Common Stock (other than a change in par value to no par value, or
from no par value to par value, or as a result of a subdivision or
combination), consolidation of the Company with, or merger of the
Company into, another corporation (other than a consolidation or
merger in which the Company is the surviving corporation and which
does not result in any reclassification or change of the outstanding
shares of Common Stock, except a change as a result of a subdivision
or combination of such shares or a change in par value, as
aforesaid), or a sale or conveyance to another corporation of the
property of the Company as an entirety is proposed; or
(e) The Company or an affiliate of the Company shall propose to
issue any rights to subscribe for shares of Common Stock or any other
securities of the Company or of such affiliate to all the
shareholders of the Company;
then, in any one or more of said events, the Company shall give written notice
to the Holder or Holders of such event at least fifteen (15) days prior to the
date fixed as a record date or the date of closing the transfer books for the
determination of the shareholders entitled to such dividend, distribution,
convertible or exchangeable securities or subscription rights, options or
warrants, or entitled to vote on such proposed dissolution, liquidation, winding
up or sale. Such notice shall specify such record date or the date of closing
the transfer books, as the case may be. Failure to give such notice or any
defect therein shall not affect the validity of any action taken in connection
with the declaration or payment of any such dividend or distribution, or the
issuance of any convertible or exchangeable securities or subscription rights,
options or warrants, or any proposed dissolution, liquidation, winding up or
sale.
-13-
13. Underlying Warrants.
The form of the certificates representing the Underlying Warrants
(and the form of election to purchase shares of Common Stock upon the exercise
of the Underlying Warrants and the form of assignment printed on the reverse
thereof) shall be substantially as set forth in Exhibit "A" to the Public
Warrant Agreement; provided, however, (i) each Underlying Warrant issuable upon
exercise of the Warrants shall evidence the right to initially purchase 180,000
fully paid and non-assessable share(s) of Common Stock in respect of the
Underlying Warrant at an initial purchase price of $8.25 per share until
__________, 2002 and (ii) the Target Redemption Price (as defined in the Public
Warrant Agreement) of the Underlying Warrants is 150% of the then effective
exercise price of the Underlying Warrants. As set forth in Section 8.5 of this
Agreement, the exercise price of the Underlying Warrants and the number of
shares of Common Stock issuable upon the exercise of the Underlying Warrants are
subject to adjustment, whether or not the Warrants have been exercised and the
Underlying Warrants have been issued, in the manner and upon the occurrence of
the events set forth in Section 9 of the Public Warrant Agreement, which is
hereby incorporated herein by reference and made a part hereof as if set forth
in its entirety herein. Subject to the provisions of this Agreement and upon
issuance of the Underlying Warrants, each registered holder of such Underlying
Warrants shall have the right to purchase from the Company (and the Company
shall issue to such registered holders) up to the number of fully paid and
non-assessable Underlying Warrant Shares (subject to adjustment as provided
herein and in the Public Warrant Agreement), free and clear of all preemptive
rights of shareholders, provided that such registered holder complies, in
connection with the exercise of such holders' Underlying Warrants, with the
terms governing exercise of the Public Warrants set forth in the Public Warrant
Agreement, and pays the applicable exercise price, determined in accordance with
the terms of the Public Warrant Agreement. Upon exercise of the Underlying
Warrants, the Company shall forthwith issue to the registered holder of any such
Underlying Warrants, in such holder's name or in such name as may be directed by
such holder, certificates for the number of Underlying Warrant Shares so
purchased. The Underlying Warrants shall be transferable in the manner provided
in the Public Warrant Agreement, and upon any such transfer, a new Underlying
Warrant shall be issued promptly to the transferee. The Company covenants to,
and agrees with, each Holder that without the prior written consent of all the
Holders, the Public Warrant Agreement will not be modified, amended, cancelled,
altered or superseded, and that the Company will send to each Holder,
irrespective of whether or not the Warrants have been exercised, any and all
notices required by the Public Warrant Agreement to be sent to holders of the
Public Warrants.
14. Notices.
All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly made when
delivered, or mailed by registered or certified mail, return receipt requested:
(a) If to a Holder, to the address of such Holder as shown on
the books of the Company; or
-14-
(b) If to the Company, to the address set forth in Section 3 of
this Agreement or to such other address as the Company may designate
by notice to the Holders.
15. Supplements and Amendments.
The Company and the Underwriter may from time to time
supplement or amend this Agreement without the approval of any Holders of the
Warrants and/or Warrant Securities in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any provisions herein, or to make any other provisions in regard to matters
or questions arising hereunder which the Company and the Underwriter may deem
necessary or desirable and which the Company and the Underwriter deem not to
adversely affect the interests of the Holders of Warrant Certificates.
16. Successors.
All the covenants and provisions of this Agreement by or for
the benefit of the Company and the Holders inure to the benefit of their
respective successors and assigns hereunder.
17. Termination.
This Agreement shall terminate at the close of business on
_________, 2005. Notwithstanding the foregoing, this Agreement will terminate on
any earlier date when all Warrants and Underlying Warrants have been exercised
and all Warrant Securities have been resold to the public; provided, however,
that the provisions of Section 7 shall survive any termination pursuant to this
Section 17 until the close of business on __________, 2008.
18. Governing Law.
This Agreement and each Warrant Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of New York
and for all purposes shall be construed in accordance with the laws of said
State.
-15-
19. Benefits of This Agreement.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company and the Underwriter and any other Holder or
Holders any legal or equitable right, remedy or claim under this Agreement; and
this Agreement shall be for the sole and exclusive benefit of the Company and
the Underwriter and any other Holder or Holders.
20. Counterparts.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and
such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
[SEAL] HEALTHDESK CORPORATION
By:
--------------------------------
Name:
Title:
Attest:
-------------------------
WHALE SECURITIES CO., L.P.
By: Whale Securities Corp.
General Partner
By:
--------------------------------
Name:
Title:
-16-
EXHIBIT A
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE 5:00 P.M., NEW YORK TIME, _______, 2002
No. W- _______ Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that ________
_____________________________ or registered assigns, is the registered holder of
__________ Warrants to purchase, at any time until 5:00 P.M. New York City time
on _______, 2002 ("Expiration Date"), up to _______ fully-paid and
non-assessable shares (the "Shares") of the common stock, no par value (the
"Common Stock"), of HealthDesk Corporation, a California corporation (the
"Company"), at an initial exercise price, subject to adjustment in certain
events (the "Exercise Price"), of $____ per Share, upon surrender of this
Warrant Certificate and payment of the Exercise Price at an office or agency of
the Company, but subject to the conditions set forth herein and in the warrant
agreement dated as of _______, 199__ between the Company and Whale Securities
Co., L.P. (the "Warrant Agreement"). Payment of the Exercise Price may be made
in cash, or by certified or official bank check in New York Clearing House funds
payable to the order of the Company, or any combination thereof.
No Warrant may be exercised after 5:00 P.M., New York City time, on the
Expiration Date, at which time all Warrants evidenced hereby, unless exercised
prior thereto, shall thereafter be void.
-17-
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to in a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.
The Warrant Agreement provides that upon the occurrence of certain
events, the Exercise Price and the type and/or number of the Company's
securities issuable thereupon may, subject to certain conditions, be adjusted.
In such event, the Company will, at the request of the holder, issue a new
Warrant Certificate evidencing the adjustment in the Exercise Price and the
number and/or type of securities issuable upon the exercise of the Warrants;
provided, however, that the failure of the Company to issue such new Warrant
Certificates shall not in any way change, alter, or otherwise impair, the rights
of the holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax, or other governmental charge
imposed in connection therewith.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined in the
Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed under its corporate seal.
Dated: _______, 199__ HEALTHDESK CORPORATION
[SEAL] By:__________________________
Name:
Title:
Attest:
----------------------
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _________ Shares of Common
Stock and herewith tenders in payment for such securities, cash or a certified
or official bank check payable in New York Clearing House Funds to the order of
____________________________ in the amount of $ , all in accordance with the
terms hereof. The undersigned requests that a certificate for such securities be
registered in the name of , whose address is , and that such Certificate be
delivered to ___________________________, whose address is _____________.
Dated: Signature:____________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate.)
--------------------------------
--------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such
holder desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED____________________________________________________
hereby sells, assigns and transfers unto
_______________________________________________________________________________
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________, Attorney, to
transfer the within Warrant Certificate on the books of the within-named
Company, with full power of substitution.
Dated: Signature:____________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate)
-------------------------------
-------------------------------
(Insert Social Security or Other
Identifying Number of Assignee)
EXHIBIT B
THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE OTHER SECURITIES ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR SOLD EXCEPT (i) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT, (ii) TO THE EXTENT APPLICABLE,
PURSUANT TO RULE 144 UNDER SUCH ACT (OR ANY SIMILAR RULE UNDER SUCH ACT RELATING
TO THE DISPOSITION OF SECURITIES), OR (iii) UPON THE DELIVERY BY THE HOLDER TO
THE COMPANY OF AN OPINION OF COUNSEL, REASONABLY SATISFACTORY TO COUNSEL FOR THE
COMPANY, STATING THAT AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE.
THE TRANSFER OR EXCHANGE OF THE WARRANTS REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., NEW YORK TIME, _______, 2002
No. W- _________ Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that _____________
____________________, or registered assigns, is the registered holder of
___________________________ (_______) Warrants to purchase, at any time until
5:00 P.M. New York City time on _______, 2002 ("Expiration Date"), an aggregate
of up to ___________________________ (_______) common stock purchase warrants,
each common stock purchase warrant entitling the holder thereof to purchase
[one] share of common stock, no par value (collectively, the "Underlying
Warrants"), of HealthDesk Corporation, a California corporation (the "Company"),
at an initial exercise price, subject to adjustment in certain events (the
"Exercise Price"), of $____ per Underlying Warrant, upon surrender of this
Warrant Certificate and payment of the Exercise Price at an office or agency of
the Company, but subject to the conditions set forth herein and in the warrant
agreement dated as of _______, 199__ between the Company and Whale Securities
Co., L.P. (the "Warrant Agreement"). Payment of the Exercise Price may be made
in cash, or by certified or official bank check in New York Clearing House funds
payable to the order of the Company, or any combination thereof.
The Underlying Warrants issuable upon exercise of the Warrants will
be exercisable at any time until 5:00 P.M. Eastern Time _______, 2002 each
Underlying Warrant entitling the holder thereof to purchase one fully-paid and
non-assessable share of common stock of the Company, at an initial exercise
price, subject to adjustment in certain events, of $____ per share. The
Underlying Warrants are issuable pursuant to the terms and provisions of a
certain agreement dated as of _______, 1997 by and among the Company, Whale
Securities Co., L.P. and American Stock Transfer and Trust Company (the "Public
Warrant Agreement"). The Public Warrant Agreement is hereby incorporated by
reference in and made a part of this instrument and is hereby referred to
(except as otherwise provided in the Warrant Agreement) for a description of the
rights, limitations of rights, manner of exercise, anti-dilution provisions and
other provisions with respect to the Underlying Warrants.
No Warrant may be exercised after 5:00 P.M., New York City time, on
the Expiration Date, at which time all Warrants evidenced hereby, unless
exercised prior thereto, shall thereafter be void.
The Warrants evidenced by this Warrant Certificate are part of a duly
authorized issue of Warrants issued pursuant to the Warrant Agreement, which
Warrant Agreement is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to in a description of the rights, limitation
of rights, obligations, duties and immunities thereunder of the Company and the
holders (the words "holders" or "holder" meaning the registered holders or
registered holder) of the Warrants.
The Warrant Agreement provides that, upon the occurrence of certain
events, the Exercise Price and the type and/or number of the Company's
securities issuable thereupon may, subject to certain conditions, be adjusted.
In such event, the Company will, at the request of the holder, issue a new
Warrant Certificate evidencing the adjustment in the Exercise Price and the
number and/or type of securities issuable upon the exercise of the Warrants;
provided, however, that the failure of the Company to issue such new Warrant
Certificates shall not in any way change, alter, or otherwise impair the rights
of the holder as set forth in the Warrant Agreement.
Upon due presentment for registration of transfer of this Warrant
Certificate at an office or agency of the Company, a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like number
of Warrants shall be issued to the transferee(s) in exchange for this Warrant
Certificate, subject to the limitations provided herein and in the Warrant
Agreement, without any charge except for any tax or other governmental charge
imposed in connection therewith.
Upon the exercise of less than all of the Warrants evidenced by this
Certificate, the Company shall forthwith issue to the holder hereof a new
Warrant Certificate representing such number of unexercised Warrants.
The Company may deem and treat the registered holder(s) hereof as the
absolute owner(s) of this Warrant Certificate (notwithstanding any notation of
ownership or other writing hereon made by anyone), for the purpose of any
exercise hereof, and of any distribution to the holder(s) hereof, and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined
in the Warrant Agreement shall have the meanings assigned to them in the Warrant
Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate
to be duly executed under its corporate seal.
Dated: _______, 1997 HEALTHDESK CORPORATION
[SEAL] By:__________________________
Name:
Title:
Attest:
----------------------
[FORM OF ELECTION TO PURCHASE]
The undersigned hereby irrevocably elects to exercise the right,
represented by this Warrant Certificate, to purchase _________ Underlying
Warrants and herewith tenders, in payment for such securities, cash or a
certified or official bank check payable in New York Clearing House Funds to the
order of _______________________ in the amount of $ , all in accordance with the
terms hereof. The undersigned requests that a certificate for such securities be
registered in the name of , whose address is , and that such Certificate be
delivered to , whose address is _____________.
Dated: Signature:_____________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate.)
--------------------------------
--------------------------------
(Insert Social Security or Other
Identifying Number of Holder)
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such
holder desires to transfer the Warrant Certificate.)
FOR VALUE RECEIVED___________________________________________
hereby sells, assigns and transfers unto
_______________________________________________________________________________
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _______________, Attorney, to
transfer the within Warrant Certificate on the books of the within-named
Company, with full power of substitution.
Dated: Signature:_____________________________
(Signature must conform in all respects
to name of holder as specified on the
face of the Warrant Certificate)
--------------------------------
--------------------------------
(Insert Social Security or Other
Identifying Number of Assignee)
