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EXHIBIT 4.1
THE SECURITIES REPRESENTED BY THIS NOTE WERE ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED, OR
OTHERWISE TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT, OR AN OPINION OF
COUNSEL, IN FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN
COMPARABLE TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES
ACT AND ALL APPLICABLE STATE SECURITIES LAWS.
CONVERTIBLE PROMISSORY NOTE
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FOR VALUE RECEIVED, WebMD Corporation, a corporation organized under
the laws of the State of Delaware (hereinafter called the "COMPANY") hereby
promises to pay to the order of ______________________ (the "HOLDER") the
principal amount of _________________________ ($___________) on ________ __,
200_ (the "MATURITY DATE") and to pay interest on the outstanding principal
balance hereof at the rate of ____ percent (__%) per annum from the date hereof
until such principal balance is paid in full. All computations of interest
shall be made on the basis of a year of 365 or 366 days, as the case may be, in
each case for the actual number of days (including the first day, but excluding
the last day) occurring in the period for which interest is payable. The
Company may prepay all or any portion of the principal amount of this
Convertible Promissory Note (hereafter, this "Note") and any interest accrued
thereon at any time prior to the Maturity Date. Interest shall be payable in
arrears at such time as the outstanding principal balance hereof with respect
to which such interest has accrued becomes due and payable (or has been fully
prepaid) hereunder. All payments of principal and interest (to the extent not
converted into shares of the Company's common stock, par value $.0001 per share
("COMMON STOCK"), in accordance with the terms hereof) shall be made in, and
all references herein to monetary denominations shall refer to, lawful money of
the United States of America. All payments shall be made at the address of
Holder set forth above or as Holder shall hereafter give to the Company by
written notice made in accordance with the provisions of this Note. This Note
is being issued by the Company pursuant to the ____________ Purchase Agreement
(the "PURCHASE AGREEMENT"), dated as of _______ ___, ___________, between
Medical Manager Health Systems, Inc. ("MEDICAL MANAGER"), Holder, and
____________________________ (the "SHAREHOLDER"). Each capitalized term used,
but not otherwise defined, herein shall have the meaning ascribed thereto in
the Purchase Agreement.
1. CONVERSION BY THE COMPANY.
(A) CONVERSION PRICE AND CONVERSION PROCEDURE. The
Company may, at its sole option, commencing on the date which is _____ (__)
months from the date hereof and
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ending on the Maturity Date (the "Conversion Period"), convert all (but not
part) of the then outstanding principal amount of this Note and any accrued
interest payable thereon (such event, the "Conversion"), into a number of fully
paid and non-assessable shares of Common Stock (the "Conversion Shares") equal
to the number derived by dividing the outstanding principal amount of this Note
(excluding any accrued interest payable thereon) at the time of the Conversion
by the Conversion Price (defined below). Effective upon the Conversion, any
unpaid interest that had accrued under this Note on the principal amount to be
converted shall automatically be deemed paid upon issuance of the Conversion
Shares. The "Conversion Price" shall be (i) the average closing sale price of a
share of Common Stock as quoted on the NASDAQ Stock Market ("NASDAQ") (or if
NASDAQ is not the principal trading market for the Common Stock, the average
closing sale price on the principal securities exchange where such security is
listed) for the five (5) trading days immediately preceding the Conversion Date
(defined below), as reported (absent manifest error in the printing thereof) by
the Wall Street Journal (Eastern Edition) multiplied by (ii) ______.
In order to effectuate the Conversion, the Company shall deliver the Notice
attached hereto as Exhibit A (the "Notice of Conversion") (which must be fully
completed and executed) to the Holder during the Conversion Period. Upon
delivery of the Notice of Conversion by the Company to the Holder, this Note
shall automatically cease to evidence the obligation of the Company to repay
the outstanding principal amount and the accrued interest thereon and shall
instead evidence the Conversion Shares. As promptly as practicable after the
delivery of the Notice of Conversion, the Holder shall surrender this Note.
Within three (3) business days after the surrender of this Note, the Company
shall deliver or cause to be delivered to the Holder, at the address indicated
herein, a certificate(s) evidencing the Conversion Shares. If a certificate or
certificates for the Conversion Shares are to be issued in the name of a person
or entity other than the Holder, the Holder will pay all transfer taxes payable
with respect thereto. Notwithstanding anything to the contrary contained
herein, the Notice of Conversion shall be delivered only by facsimile or
personal delivery.
(B) NO FRACTIONAL SHARES. No fraction of a share of
Common Stock shall be issued upon the Conversion. In lieu of any such
fractional shares, the Holder shall receive an amount in cash equal to the
amount of (i) the Conversion Price multiplied by (ii) the fractional interest
of a share of Common Stock to which the Holder would otherwise be entitled.
(C) CONVERSION DATE. The "Conversion Date" shall be the
date upon which the Notice of Conversion is delivered. The Holder shall be
treated for all purposes as the record holder of the Common Stock as of the
Conversion Date.
(D) MERGER, CONSOLIDATION, ETC. Notwithstanding anything
to the contrary contained in this Note, the right to effectuate the Conversion
will not be exercisable at any time when the securities to be issued in such
Conversion are not traded on NASDAQ, the American Stock Exchange or the New
York Stock Exchange. If, at any time prior to the Maturity Date and prior to
the Conversion, there shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization, or other similar event, as a result of which
shares of Common Stock of the Company shall be changed into the same or a
different number of shares of another
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class or classes of stock or securities of the Company or another entity, or in
case of any sale or conveyance of all or substantially all of the assets of the
Company, pursuant to which the shareholders of the Company receive securities
of another Company in exchange for their Common Stock (each, a "Business
Combination Transaction"), then for purposes of the Conversion, "Common Stock"
shall refer to the type of securities for which the Common Stock is exchanged;
provided, however, that such securities are publicly traded on NASDAQ, the
American Stock Exchange or the New York Stock Exchange at the time of the
Conversion.
2. RIGHT OF OFFSET. Notwithstanding anything to the contrary set
forth herein, from the date hereof until the Maturity Date, the payment and
performance of the indebtedness evidenced by this Note may be offset by Company
to the extent Medical Manager or its Affiliates are entitled to recover
Indemnifiable Damages from the Holder or Shareholder pursuant to the Agreement.
Prior to exercising the right of offset, Company shall provide Holder ten (10)
days notice of a claim for Indemnifiable Damages and shall exercise the right
of offset only if such claim remains after such period. Notwithstanding
anything to the contrary herein, no interest shall be payable or accrue on the
outstanding principal amount of this Note with respect to the amount of any
Indemnifiable Damages.
3. REPRESENTATIONS OF HOLDER. The Holder is acquiring the Note
hereunder for its own account for investment and not with a view to, or for the
sale in connection with, any distribution of the Note, except in compliance
with applicable state and federal securities laws. The Holder is an "accredited
investor" as such term is defined in Rule 501(a) of Regulation D under the
Securities Act. The Holder has such knowledge and experience in financial and
business matters and it is capable of evaluating the risks of an investment in
the Note and has had the opportunity to discuss the transactions contemplated
hereby with Medical Manager and the Company and has had the opportunity to
obtain such information pertaining to the Company and its Affiliates as has
been requested, including but not limited to filings made by the Company with
the SEC under the Exchange Act. The Holder hereby represents that it can bear
the economic risk of losing the investment in the Note and has adequate means
for providing for current financial needs and contingencies. The Holder
acknowledges receiving the Company's most recent annual report on Form 10-K,
the Annual Report to shareholders and all reports required to be filed under
Sections 13(a), 14(a), 14(c) and 15(d) of the Exchange Act since the filing of
the form 10-K within a reasonable time period prior to the date hereof.
4. MISCELLANEOUS PROVISIONS.
(A) NO WAIVER. No waiver of any provision of this Note,
nor consent to any departure by the Company therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Company and the
Holder. No failure or delay on the part of Holder in the exercise of any power,
right or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege.
(B) NOTICES. Except as set forth in Section (1)(a), any
notices required or permitted to be given under the terms of this Note shall be
sent by certified or registered mail (return receipt requested) or delivered
personally or by courier (including a recognized overnight
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delivery service) or by facsimile, and shall be effective five days after being
placed in the mail, if mailed, upon receipt or refusal of receipt, if delivered
personally or by courier, upon receipt of a facsimile confirmation sheet if
delivered by facsimile, by facsimile, in each case addressed to a party. The
addresses for such communications shall be as set forth below or such other
address or facsimile as is communicated to the Company or the Holder by notice
in accordance with the terms hereof:
IF TO THE COMPANY:
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Attention:
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Facsimile:
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WITH COPY TO:
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Attention:
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Facsimile:
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IF TO HOLDER:
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Attention:
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Facsimile:
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WITH COPY TO:
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Attention:
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Facsimile:
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(C) AMENDMENT. This Note may be amended only by an
instrument in writing signed by the Company and the Holder.
(D) BINDING NATURE; ASSIGNABILITY. This Note shall be
binding upon the Company and its successors and assigns. This Note is not
assignable by the Holder without the prior written consent of the Company.
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(E) GOVERNING LAW. This Note shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed in the State of New York (without regard to
principles of conflict of laws). The Company and Holder irrevocably consent to
the jurisdiction of the United States federal courts and state courts located
in New York County, New York in any suit or proceeding based on or arising
under this Note, and irrevocably agree that all claims in respect of such suit
or proceeding may be determined in such courts. The Company and Holder
irrevocably waive the defense of an inconvenient forum to the maintenance of
such suit or proceeding.
(F) JURY TRIAL WAIVER. THE COMPANY AND THE HOLDER HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO
TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. THE
PARTIES ACKNOWLEDGE THAT EACH OF THEM HAS BEEN REPRESENTED BY AN ATTORNEY OR
HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH THIS JURY
TRIAL WAIVER AND UNDERSTANDS THE LEGAL EFFECT OF THIS WAIVER.
IN WITNESS WHEREOF, Company has caused this Note to be signed
in its name by its duly authorized officer as of the date first above written.
WEBMD CORPORATION
By:
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Name:
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Title:
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Acknowledged and Agreed to:
HOLDER
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EXHIBIT A
NOTICE OF CONVERSION
WebMD Corporation, a Delaware corporation (the "Company") hereby
irrevocably elects to convert (the "Conversion") the entire outstanding
principal amount of the Note, plus accrued interest payable thereon (defined
below) into shares of Common Stock, par value $.0001 per share ("COMMON
STOCK"), of the Company according to the conditions of the Convertible
Promissory Note of the Company dated as of _________________ (the "NOTE"). As a
result of the Conversion, _____ shares of Common Stock (the "CONVERSION
SHARES") have been issued by the Company in favor of the Holder.
The number of shares of Common Stock has been calculated as follows:
Outstanding Principal Amount of the Note $
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/ Conversion Price = $
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Shares of Company Common Stock
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Pursuant to Section 1(a) of the Note, the Company is not required to issue a
certificate for the shares of Common Stock until the original Note being
converted hereby is received by the Company. The Company shall issue and
deliver to the Holder a certificate or certificates for the number of shares of
Common Stock set forth above not later than three (3) business days following
the receipt of the original Note to be converted hereby. If a certificate or
certificates for the Conversion Shares are to be issued in the name of a person
or entity other than the Holder, the Holder will pay all transfer taxes payable
with respect thereto. No fee will be charged to the Holder for the Conversion,
except for transfer taxes, if any.
WEBMD CORPORATION
By:
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Name:
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Title:
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