EXHIBIT 10.4
CONSULTING SERVICES AGREEMENT
THIS CONSULTING SERVICES AGREEMENT entered into this 12th day of June
2001 (hereinafter "Effective Date") by and between Medix Resources, Inc., a
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Colorado corporation with its principal office at 000 Xxxxxxx Xxxxxx, Xxxxx
0000, Xxx Xxxx, XX 00000 (the "Company"), and Yorkville Advisors Management,
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LLC, a Delaware limited company, with its principal office at 000 Xxxxx
Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000 (the "Consultant").
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Company desires to retain the services of Consultant as an independent
contractor to provide certain consulting and advisory services designated
below, and Consultant desires to accept such engagement by Company, pursuant
to the terms and conditions of this Consulting Agreement.
In consideration of the representations, warranties, mutual covenants
and agreements set forth herein, the parties agree as follows:
1. SCOPE OF SERVICES.
a. Duties and Performance. From time to time during the term of this
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Agreement, Consultant shall provide such advisory services relating to the
Company's financial status and capital structure (the "Services") to Company
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as Consultant and Company shall agree. In connection with the Services,
Consultant may develop and communicate to Company certain business
opportunities with entities ("Persons") known to Consultant; the Services may
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include various types of arrangements, including direct investment into
Company.
b. Independent Contractor Status. The parties agree that Consultant is an
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independent contractor performing Services hereunder and not an employee of
Company. Consultant may use contractors or other third parties of
Consultant's choice to assist Consultant in rendering such Services. Unless
otherwise agreed by Company in writing, Consultant shall be responsible for
payment of all compensation or expenses payable or reimbursable to such third
parties. Nothing herein or in the performance hereof shall imply either a
joint venture or principal and agent relationship between the parties, nor
shall either such relationship be deemed to have arisen under this Agreement.
2. COMPENSATION AND EXPENSES.
a. Finders Fee; Not a Broker.
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i. In respect of any capital investment in, or debt financing to,
Company which is made recommended or advised upon by Consultant either during
the term of this Agreement or within one year from the termination or
expiration of this Agreement by an entity which was introduced directly or
indirectly by Consultant prior to a termination of the term of this
Agreement, Company shall pay to Consultant a fee in an amount equal to two
and thirty one one hundredths percent (2.31%) of the amount, or to any
person designated by Consultant, invested or loaned to Company. If the
amount invested in or loaned to the Company is so invested or loaned in
installments or a Line of Credit financing, then the fee stated in the
preceding sentence shall be paid on each such installment. Company
acknowledges that Consultant is not a registered as a broker-dealer under
the Securities Exchange Act of 1934, as amended, and, accordingly, Consultant
will not (i) engage in any effort to sell any securities of Company, (ii)
engage in the negotiation of any proposed transaction; (iii) provide advice
as to the value of the Company or of potential acquisition targets, or any of
its or their securities, or (iv) make any recommendations as to the
acquisition of a potential acquisition target or the purchase or sale of any
particular securities. Payment to Consultant in respect to any Section 2.c
fee shall be made at the closing of each such transaction, and shall be an
express condition to the closing of any such transaction. This Section 2.c
shall survive any termination of this Agreement.
ii. In the event of a Line of Credit Financing, the Company shall issue
to the Consultant upon the an effective registration statement shares of
the Company's Common Stock in an amount equal sixty six one hundredths
percent (0.66%) of the Commitment Amount divided by the Volume Weighted
Average Price of the Company's Common Stock on the date this Agreement is
executed or ninety cents ($0.90) which ever is higher (the "Initial Shares"),
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and on the one hundred and fiftieth (150th ) day following an effective
registration statement the Company or one hundred and eighty (180) days
following the date hereof, which ever occurs first, shall issue and deliver
the Consultant shares of the Company's Common Stock in an amount equal to
sixty six one hundredths percent (0.66%) of the Commitment Amount divided by
the Purchase Price calculated as if an Advance Notice Date occurred on the
one hundred and fiftieth (150th) or one hundred and eightieth (180th) day as
the case may be. Such Initial and Additional Shares will have demand and
piggy-back registration rights.
b. Expense Reimbursement. While this Agreement is in effect, Company
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shall pay for or reimburse Consultant for all reasonable and itemized
business expenses incurred by Consultant directly related to the services to
be performed by Consultant under this Agreement provided, that each
individual expense shall have been approved in writing in advance by the
Company. Consultant shall keep accurate and detailed records of such
expenses and submit expense reports along with relevant documentation in
accordance with the expense reimbursement policy of Company. Company shall
pay or reimburse Consultant for all reasonable out-of-pocket expenses
actually incurred or paid by Consultant in the course of performing services
as required hereunder; provided, that each individual expense item shall have
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been approved in writing in advance by Company.
c. Non-Circumvention. Company represents and warrants that Company shall
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take no action which shall result in Company and any third-party introduced
to Company, directly or indirectly, by Consultant consummating a relationship
or transaction with Company in contravention of this Agreement
3. INDEMNIFICATION. Exhibit A attached hereto and made a part hereof sets
forth the understanding of the parties with respect to the indemnification
and exculpation of Consultant. The provisions of Exhibit A shall survive,
and remain in full force and effect after, the termination of this Agreement
until fully performed.
4. TERM AND TERMINATION. The initial term of this Agreement shall be for
a period commencing on the Effective Date hereof and ending on the first
anniversary of the date of this Agreement. Either party may terminate this
Agreement without cause or without the necessity of specifying cause by
giving written notice of termination to the other party. This Agreement
shall terminate upon its expiration or upon receipt of this notice of
termination by the non-terminating party. Upon termination or expiration of
this Agreement, Company shall pay to Consultant all amounts due through the
date of termination within 30 days of said date. Notwithstanding the
termination of this Agreement, in addition to those subsection of Section 2
which survive the termination of this Agreement, Sections 3 and 5 shall
continue in force and effect and shall survive such termination.
5. MISCELLANEOUS.
a. Notice. All notices and other communications hereunder shall be in
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writing and delivered overnight by Federal Express or any other generally
recognized overnight delivery service, or by hand, to the appropriate party
at the address stated in the initial paragraph of this Agreement for such
party or to such other address as a party indicates in a notice to the other
party delivered in accordance with this Section.
b. Severability. Should one or more provisions of this Agreement be held
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unenforceable, for whatever cause, the validity of the remainder of this
Agreement shall remain unaffected. The parties shall, in such event, attempt
in good faith to agree on new provisions which best correspond to the object
of this Agreement.
c. Entire Agreement. The parties have entered into the present Agreement
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after negotiations and discussions, an examination of its text, and an
opportunity to consult counsel. This Agreement constitutes the entire
understanding between the parties regarding to specific subject matter
covered herein. This Agreement supersedes any and all prior written or oral
contracts or understandings between the parties hereto and neither party
shall be bound by any statements or representations made by either party not
embodied in this Agreement. No provisions herein contained shall be waived,
modified or altered, except by an instrument in writing, duly executed by the
parties hereto.
d. Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of New York, without giving effect to
any choice of law of conflict of law provision or rule whether such provision
or rule is that of New York or any other jurisdiction. Each party
irrevocably consents to the exclusive personal jurisdiction of New York State
courts situated in the county in which Consultant is located in New York, or
the United States District Court, or the Southern District of New York, in
connection with any action, suit or proceeding relating to or arising out of
this Agreement or any of the transactions or relationships contemplated
hereby. Each party, to the maximum extent permitted by law, hereby waives
any objection that such party may now have or hereafter have to the
jurisdiction of such courts on the basis of inconvenient forum or otherwise.
Each party waives trial by jury in any proceeding that may arise with respect
to this Agreement.
e. No Implied Waivers. No delay or omission by either party to exercise
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its rights and remedies in connection with the breach or default of the other
shall operate as or be construed as a waiver of such rights or remedies as to
any subsequent breach.
f. Counterparts. This Agreement may be executed in any number of
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counterparts, but all counterparts hereof shall together constitute but one
agreement The parties agree that faxed or other facsimile copies of the
original signatures may be relied upon to evidence the intention of any party
hereto to form a binding agreement enforceable against such signatory.
g. Binding Nature. This Agreement shall be binding upon and shall inure
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to the benefit of the successors and assigns of the respective parties to
this Agreement.
h. Assignment. Except as set forth in this Agreement, neither party will
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have the right to assign, pledge or transfer all or any part of this
Agreement without the prior written consent of the other, and any such
purported assignment, pledge or transfer by a party without such prior
written consent shall be void.
i. Capacity. Company represents to Consultant that each person signing
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this Agreement on its behalf has the full right and authority to do so, and
to perform its obligations under this Agreement.
j. Captions. The captions appearing in this Agreement are inserted only
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as a matter of convenience and for reference and in no way define, limit or
describe the scope and intent of this Agreement or any of the provisions
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the Effective Date.
YORKVILLE ADVISORS MANAGEMENT, LLC MEDIX RESOURCES INC.
By:/s/Xxxx X. Xxxxxx By:/s/Xxxx X. Xxxxx
Name: Xxxx X. Xxxxxx Name: Xxxx X. Xxxxx
Title: Fund Manager Title: Executive Vice President
and Chief Financial Officer
EXHIBIT A
a. To the fullest extent permitted by law, the Company will,
and hereby does, indemnify, hold harmless and defend the Consultant, the
directors, officers, partners, employees, agents, representatives of, and
each Person, if any, who controls the Consultant within the meaning of the
1933 Act or the 1934 Act (each, an "Indemnified Person"), against any losses,
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claims, damages, liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys' fees, amounts paid in settlement or expenses, joint or
several (collectively, "Claims") incurred in investigating, preparing or
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defending any action, claim, suit, inquiry, proceeding, investigation or
appeal taken from the foregoing by or before any court or governmental,
administrative or other regulatory agency, body or the SEC, whether pending
or threatened, whether or not an indemnified party is or may be a party
thereto ("Indemnified Damages"), to which any of them may become subject
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insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon: (i) any
untrue statement or alleged untrue statement of a material fact in this
Agreement or any transaction or conduct in connection therewith, except that
this clause shall not apply with respect to any losses that are finally
judicially determined to have resulted primarily from the gross negligence or
willful misconduct of such indemnified party.
The Company shall reimburse the Consultants and any controlling person
promptly as such expenses are incurred and are due and payable, for any legal
fees or disbursements or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. However, the
indemnity agreement contained in this Section with respect to contribution
contained in herein shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of
the Consultants, which consent shall not be unreasonably withheld.
b. In connection this Agreement, the Consultants agree to
severally and not jointly indemnify, hold harmless and defend, to the same
extent and in the same manner as is set forth in this Section, the Company,
each of its directors, each of its officers who signs this Agreement and each
Person, if any, who controls the Company within the meaning of the 1933 Act
or the 1934 Act (each an "Indemnified Party"), against any Claim or
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Indemnified Damages to which any of them may become subject, under the 1933
Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages
arise out of or is based upon any Violation, in each case to the extent, and
only to the extent, that such Violation occurs in reliance upon and in
conformity with written information furnished to the Company by the
Consultants expressly for use in connection with this Agreement; and, subject
to Section, the Consultants will reimburse any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such Claim; provided, however, that the indemnity agreement contained in this
Section with respect to contribution contained in herein shall not apply to
amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Consultants, which consent shall
not be unreasonably withheld. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such
Indemnified Party.
c. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section of notice of the commencement of any
action or proceeding (including any governmental action or proceeding)
involving a Claim, such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to be made against any indemnifying party under
this Section, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel reasonably satisfactory to the Indemnified
Person or the Indemnified Party, as the case may be; provided, however, that
an Indemnified Person or Indemnified Party shall have the right to retain its
own counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party,
the representation by such counsel of the Indemnified Person or Indemnified
Party and the indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person or Indemnified
Party andand the indemnifying party. The Indemnified Party or Indemnified
Person shall cooperate fully with the indemnifying party in connection with
any negotiation or defense of any such action or claim by the indemnifying
party and shall furnish to the indemnifying party all information reasonably
available to the Indemnified Party or Indemnified Person which relates to
such action or claim. The indemnifying party shall keep the Indemnified
Party or Indemnified Person fully apprised at all times as to the status of
the defense or any settlement negotiations with respect thereto. No
indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent, provided, however,
that the indemnifying party shall not unreasonably withhold, delay or
condition its consent. No indemnifying party shall, without the prior
written consent of the Indemnified Party or Indemnified Person, consent to
entry of any judgment or enter into any settlement or other compromise which
does not include as an unconditional term thereof the giving by the claimant
or plaintiff to such Indemnified Party or Indemnified Person of a release
from all liability in respect to such claim or litigation. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter
for which indemnification has been made. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement
of any such action shall not relieve such indemnifying party of any liability
to the Indemnified Person or Indemnified Party under this Section 6, except
to the extent that the indemnifying party is prejudiced in its ability to
defend such action.
d. The indemnification required by this Section shall be made
by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified
Damages are incurred.
e. The indemnity agreements contained herein shall be in
addition to
(i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.