EXHIBIT 10.4
WARRANT AGREEMENT
BY AND BETWEEN
MEDIX RESOURCES, INC.
AND
ROYCAP INC.
DATED AS OF DECEMBER 29, 2000
TABLE OF CONTENTS
Article I WARRANT CERTIFICATES
Section 1.1 Warrant Certificates
Section 1.2 Execution of Warrant Certificates
Section 1.3 Registration of Warrant Certificates
Section 1.4 Exchange and Transfer of Warrant Certificates
Section 1.5 Lost, Stolen, Mutilated or Destroyed Warrant Certificates
Section 1.6 Cancellation of Warrant Certificates
Article II WARRANT EXERCISE PRICE AND EXERCISE OF WARRANTS
Section 2.1 Exercise Price
Section 2.2 Registration of Warrants and Warrant Shares
Section 2.3 Procedure for Exercise of Warrants
Section 2.4 Issuance of Common Stock
Section 2.5 Certificates for Unexercised Warrants
Section 2.6 Reservation of Shares
Section 2.7 No Impairment
Article III ADJUSTMENTS AND NOTICE PROVISIONS
Section 3.1 Adjustment of Exercise Price
Section 3.2 Certificate of Adjustments
Section 3.3 Warrant Certificate Amendments
Section 3.4 Fractional Shares
ARTICLE VI MISCELLANEOUS
Section 4.1 Payment of Taxes and Charges
Section 4.2 Changes to Agreement
Section 4.3 Assignment
Section 4.4 Successor to Company
Section 4.5 Notices
Section 4.6 Defects in Notice
Section 4.7 Governing Law
Section 4.8 Standing
Section 4.9 Headings
Section 4.10 Counterparts
Section 4.11 Availability of the Agreement
Section 4.12 Entire Agreement
WARRANT AGREEMENT
THIS WARRANT AGREEMENT (the "Agreement"), dated as of December
29, 2000, is entered into by and between Medix Resources, Inc., a Colorado
corporation (the "Company"), and RoyCap Inc., an Ontario corporation (the
"Purchaser").
WITNESSETH:
WHEREAS, the Company proposes to sell to Purchaser pursuant to a
Securities Purchase Agreement, dated as of the date hereof (the "Securities
Purchase Agreement"), by and between the Company and the Purchaser, a
Convertible Note (the "Convertible Note") of the Company which permits the
Company to draw up to $2,500,000 ;
AND WHEREAS the Convertible Note and the Securities Purchase
Agreement provides for the conversion of a number of shares of Common Stock
of the Company, for the issuance of a warrant to the Purchaser in the
circumstances set out in Section 5 of the Convertible Note (the "Call
Warrant") and further provides for the issuance of warrants to purchase up to
1,250,000 shares of Common Stock, $0.001 par value per share of the Company
at an exercise price as described herein (the "Advance Warrants"). The
Advance Warrants and the Call Warrant are collectively referred to herein as
the "Warrants". The Common Stock issuable upon exercise of the Warrants shall
be referred to herein as the "Warrant Shares".
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
WARRANT CERTIFICATES
Warrant Certificates. Contemporaneously with the execution hereof, the
Company shall issue a warrant certificate (the "Warrant Certificate") to
acquire 500,000 shares of the Common Stock of the Company substantially in
the form of Exhibit A attached hereto. Thereafter, the Company shall issue
Warrant Certificates substantially in the form of Exhibit B attached hereto,
each of which is a Warrant to acquire 250,000 shares of the Common Stock of
the Company, contemporaneously with the advance of each of Tranche 3, Tranche
4 and Tranche 5, as defined in the Securities Purchase Agreement. In the
circumstances where the Company is required to issue the Call Warrant, it
shall be substantially in the form of Exhibit C attached hereto. All such
Warrant Certificates shall be issued together with the form of the election
to purchase (the "Election to Purchase") and assignment (the "Assignment") to
be attached thereto, and, in addition, may have such letters, numbers or
other marks of identification or designation and such legends, summaries, or
endorsements stamped, printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the provisions
of this Agreement, or as, in any particular case, may be required in the
opinion of counsel for the Company, to comply with any law or with any rule
or regulation of any regulatory authority or agency, or to conform to
customary usage.
Execution of Warrant Certificates. The Warrant Certificates shall be
executed on behalf of the Company by its Chairman or President or any
Executive Vice President and attested to by its Secretary or Assistant
Secretary, either manually or by facsimile signature printed thereon. In
case any authorized officer of the Company who shall have signed any of the
Warrant Certificates shall cease to be an officer of the Company either
before or after delivery thereof by the Company to any Purchaser, the
signature of such person on such Warrant Certificates shall be valid
nevertheless and such Warrant Certificates may be issued and delivered to
those persons entitled to receive the Warrants represented thereby with the
same force and effect as though the person who signed such Warrant
Certificates had not ceased to be an officer of the Company.
Registration of Warrant Certificates. The Company shall number and keep a
registry for the Warrant Certificates in a register as they are needed. The
Company may deem and treat the registered holder(s) of the Warrant
Certificates (the "Holders") as the absolute owner(s) thereof for all
purposes and the Company shall not be affected by any notice to the contrary.
Exchange and Transfer of Warrant Certificates. The Warrant Certificates may
be transferred or exchanged in accordance with the provisions of Section 2(a)
thereof.
Lost, Stolen, Mutilated or Destroyed Warrant Certificates. If any Warrant
Certificate shall be mutilated, lost, stolen or destroyed, the Company shall
issue, execute and deliver, in exchange and substitution for and upon
cancellation of a mutilated Warrant Certificate, or in lieu of or in
substitution for a lost, stolen or destroyed Warrant Certificate, a new
Warrant Certificate representing an equivalent number of Warrants or Warrant
Shares. If required by the Company, the Holder of the mutilated, lost,
stolen or destroyed Warrant Certificate must provide indemnity sufficient to
protect the Company from any loss which it may suffer if the Warrant
Certificate is replaced. Any such new Warrant Certificate shall constitute
an original contractual obligation of the Company, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant Certificate shall be
at any time enforceable by anyone.
Cancellation of Warrant Certificates. Any Warrant Certificate surrendered
upon the exercise of Warrants or for exchange or transfer, or purchased or
otherwise acquired by the Company, shall be canceled and shall not be
reissued by the Company; and, except as provided in Section 2.5 hereof in
case of the exercise of less than all of the Warrants evidenced by a Warrant
Certificate or in Section 1.4 in an exchange or transfer, no Warrant
Certificate shall be issued hereunder in lieu of such canceled Warrant
Certificate. Any Warrant Certificate so canceled shall be destroyed by the
Company.
WARRANT EXERCISE PRICE AND EXERCISE
OF WARRANTS
Exercise Price. Each Warrant Certificate shall, when signed by the Chairman
or President or any Executive Vice President and attested to by the Secretary
or Assistant Secretary of the Company, entitle the Holder thereof to purchase
from the Company, subject to the terms and conditions of this Agreement and
the Warrant Certificate, the number of fully paid and nonassessable Warrant
Shares evidenced thereby at an Exercise Price per share of Ninety US Cents
($0.90) in the case of the Call Warrant, and One Dollar and Seventy-Five
Cents U.S. (US$1.75) in the case of the Advance Warrants (the "Initial
Exercise Price"), or in either case, such adjusted number of Warrant Shares
at such adjusted Exercise Price as may be established from time to time
pursuant to the provisions of Article III hereof, payable in full in
accordance with Section 2.3 hereof, at the time of exercise of the Warrant.
Except as the context otherwise requires, the term "Exercise Price" as used
in this Agreement shall mean the purchase price of one share of Common Stock,
reflecting all appropriate adjustments made in accordance with the provisions
of Article III hereof.
Registration of Warrants and Warrant Shares. The Company shall secure the
effective registration of the Warrant Shares for resale under the Securities
Act of 1933, as amended (the "Securities Act") upon the terms and subject to
the conditions set forth in the Registration Rights Agreement executed by the
parties on the date hereof. Promptly after a registration statement under
the Securities Act covering the Warrant Shares has become effective, the
Company shall cause notice thereof together with a copy of the prospectus
covering the Warrant Shares to be mailed to each registered Holder.
Procedure for Exercise of Warrants. The Call Warrant may be exercised for a
period of forty-five (45) Business Days from the Effective Date as defined in
the Securities Purchase Agreement. The Advance Warrants may be exercised
prior to the Expiration Date (as hereinafter defined) at the Exercise Price
at any time after the date of issuance. The Advance Warrants shall expire at
5:30 p.m. (Eastern Time) on the Trading Day immediately following the second
anniversary of the date the Advance Warrant or Warrants are issued in
accordance with the Securities Purchase Agreement (the "Expiration Date").
The Warrants may be exercised by surrendering the Warrant Certificates
representing such Warrants to the Company at its address set forth in Section
4.5 hereof, together with the Election to Purchase duly completed and
executed, accompanied by payment in full, as set forth below, to the Company
of the Exercise Price for each Warrant Share in respect of which such
Warrants are being exercised. Such Exercise Price shall be paid in full by
cash or a certified check or a wire transfer in same day funds in an amount
equal to the Exercise Price multiplied by the number of Warrant Shares then
being purchased.
Issuance of Common Stock. As soon as practicable after the Date of Exercise
of any Warrants, and in any event no later that three (3) Business Days
thereafter the Company shall, if possible, electronically settle into a
brokerage account designated by the Purchaser or, if not possible, issue, or
cause its transfer agent to issue, a certificate or certificates for the
number of full Warrant Shares, registered in accordance with the instructions
set forth in the Election to Purchase, together with cash for fractional
shares as provided in Section 3.10. All Warrant Shares issued upon the
exercise of any Warrants shall be validly authorized and issued, fully paid,
non-assessable, free of preemptive rights and (subject to Section 4.1 hereof)
free from all taxes, liens, charges and security interests in respect of the
issuance thereof. Each person in whose name any such certificate for Warrant
Shares is issued shall be deemed for all purposes to have become the holder
of record of the Common Stock represented thereby on the Date of Exercise of
the Warrants resulting in the issuance of such shares, irrespective of the
date of issuance or delivery of such certificate for Warrant Shares.
Certificates for Unexercised Warrants. In the event that, prior to the
Expiration Date, a Warrant Certificate is exercised in respect of fewer than
all of the Warrant Shares issuable on such exercise, a new Warrant
Certificate representing the remaining Warrant Shares shall be issued and
delivered pursuant to the provisions hereof; provided that the Company shall
not be required to issue any Warrant Certificate representing any fractional
Warrant Shares.
Reservation of Shares. The Company shall at all times reserve and keep
available, free from preemptive rights, for issuance upon the exercise of
Warrants, the maximum number of its authorized but unissued shares of Common
Stock which may then be issuable upon the exercise in full of all outstanding
Warrants. The Company shall from time to time take all action which may be
necessary or appropriate so that the Warrant Shares, immediately upon their
issuance following an exercise of Warrants, will be listed or quoted, as the
case may be, on the principal securities exchanges or markets within the
United States of America, if any, on which other shares of the Common Stock
are then listed. Without limitation of Section 2.2 hereof, nothing in this
Section 2.6 shall require the Company to maintain a current registration
statement or prospectus for the Warrant Shares.
No Impairment. The Company shall not by any action, including, without
limitation, amending its certificate of incorporation or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of the Warrants, but will
at all times in good faith assist in the carrying out of all such terms and
in the taking of all such actions as may be necessary or appropriate to
protect the rights of the Holders against impairment. Without limiting the
generality of the foregoing, the Company will (a) not increase the par value
of any Warrant Shares receivable upon the exercise of the Warrants above the
amount payable therefor upon such exercise immediately prior to such increase
in par value, (b) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
non-assessable Warrant Shares upon the exercise of any Warrant, and (c) use
its best efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under the
Warrants. Notwithstanding the foregoing paragraph, the Company shall not be
required to issue Warrant Shares upon the exercise of any Warrant if such
issuance would result in a violation by the Company of any applicable law.
ADJUSTMENTS AND NOTICE PROVISIONS
Adjustment of Exercise Price. The Exercise Price and number of Warrant
Shares issuable upon exercise of the Warrants are subject to adjustment from
time to time as set forth in this Section 3.1. Upon each such adjustment of
the Exercise Price pursuant to this Section 3.1, the Holder shall thereafter
prior to the Expiration Date be entitled to purchase, at the Exercise Price
resulting from such adjustment, the number of Warrant Shares obtained by
multiplying the Exercise Price in effect immediately prior to such adjustment
by the number of Warrant Shares issuable upon exercise of the Warrants
immediately prior to such adjustment and dividing the product thereof by the
Exercise Price resulting from such adjustment.
If the Company, at any time while the Warrants is outstanding, (i) shall pay
a stock dividend (except scheduled dividends paid on outstanding preferred
stock as of the date hereof which contain a stated dividend rate) or
otherwise make a distribution or distributions on shares of its Common Stock
or on any other class of capital stock and not the Common Stock) payable in
shares of Common Stock, (ii) subdivide or reclassify outstanding shares of
Common Stock into a larger number of shares, or (iii) combine or reclassify
outstanding shares of Common Stock into a smaller number of shares, the
Exercise Price in effect after the event shall be the Exercise Price in
effect immediately prior thereto multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding before such event and the denominator shall be
the number of shares of Common Stock (excluding treasury shares, if any)
outstanding after such event. Any adjustment made pursuant to this Section
shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date
in the case of a subdivision or combination, and shall apply to successive
subdivisions and combinations.
In case of any reclassification of the Common Stock, any consolidation or
merger of the Company with or into another person, the sale or transfer of
all or substantially all of the assets of the Company or any compulsory share
exchange pursuant to which the Common Stock is converted into other
securities, cash or property, then the Holder shall have the right
thereafter, prior to the Expiration Date, to exercise the Warrants only into
the shares of stock and other securities and property receivable upon or
deemed to be held by holders of Common Stock following such reclassification,
consolidation, merger, sale, transfer or share exchange, and the Holder shall
be entitled upon such event to receive such amount of securities or property
equal to the amount thereof that would have been paid or distributed in
respect of the Warrant Shares such Holder would have received had such Holder
exercised the Warrants immediately prior to such reclassification,
consolidation, merger, sale, transfer or share exchange. The terms of any
such consolidation, merger, sale, transfer or share exchange shall include
such terms so as to continue to give to the Holder the right to receive the
securities or property set forth in this Section 3.1 upon any exercise
following any such reclassification, consolidation, merger, sale, transfer or
share exchange.
For the purposes of this Section 3.1, the following clauses shall also be
applicable:
Record Date. In case the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them (A) to receive dividend or
other distribution payable in Common Stock or in securities convertible or
exchangeable into shares of Common Stock, or (B) to subscribe for or purchase
Common Stock or securities convertible or exchangeable into shares of Common
Stock, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon
the declaration of such dividend or the making of such other distribution or
the date of the granting of such right of subscription or purchase, as the
case may be.
Treasury Shares. The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the account of
the Company, and the disposition of any such shares shall be considered an
issue or sale of Common Stock.
All calculations under this Section 3.1 shall be made to the nearest cent or
the nearest 1/100th of a share, as the case may be.
If:
the Company shall declare a dividend (or any other distribution) on its
Common Stock; or
the Company shall declare a special nonrecurring cash dividend on or a
redemption of its Common Stock; or
the Company shall authorize the granting to all holders of the Common Stock
rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights; or
the approval of any stockholders of the Company shall be required in
connection with any reclassification of the Common Stock of the Company, any
consolidation or merger to which the Company is a party, any sale or transfer
of all or substantially all of the assets of the Company, or any compulsory
share exchange whereby the Common Stock is converted into other securities,
cash or property; or
the Company shall authorize the voluntary dissolution, liquidation or winding
up of the affairs of the Company,
then the Company shall cause to be mailed to each Holder at their last
addresses as they shall appear upon the Warrant Register, at least 30
calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, redemption, rights or warrants,
or if a record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is
expected to become effective or close, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation or winding up; provided,
however, that the failure to mail such notice or any defect therein or in the
mailing thereof shall not affect the validity of the corporate action
required to be specified in such notice.
Certificate of Adjustments. Whenever any adjustment is to be made pursuant
to this Article III, the Company shall prepare a certificate executed by the
Chief Financial Officer of the Company, setting forth such adjustments to be
mailed to each Holder at least fifteen (15) days prior thereto, such notice
to include in reasonable detail (a) the events precipitating the adjustment,
(b) the computation of any adjustments, and (c) the Exercise Price and the
number of shares or the securities or other property purchasable upon
exercise of each Warrant after giving effect to such adjustment.
Warrant Certificate Amendments. Irrespective of any adjustments pursuant to
this Article III, Warrant Certificates theretofore or thereafter issued need
not be amended or replaced, but certificates thereafter issued shall bear an
appropriate legend or other notice of any adjustments; provided the Company
may, at its option, issue new Warrant Certificates evidencing Warrants in
such form as may be approved by its Board of Directors to reflect any
adjustment in the Exercise Price and number of Warrant Shares purchasable
under the Warrants.
Fractional Shares. The Company shall not be required upon the exercise of
any Warrant to issue fractional Warrant Shares which may result from
adjustments in accordance with this Article III to the Exercise Price or
number of Warrant Shares purchasable under each Warrant. If more than one
Warrant is exercised at one time by the same Holder, the number of full
Warrant Shares which shall be issuable upon the exercise thereof shall be
computed based on the aggregate number of Warrant Shares purchasable upon
exercise of such Warrants. With respect to any final fraction of a share
called for upon the exercise of any Warrant or Warrants, the Company shall
pay an amount in cash to the Holder of the Warrants in respect of such final
fraction in an amount equal to the Fair Market Value of a share of Common
Stock as of the Date of Exercise of such Warrants, multiplied by such
fraction. All calculations under this Section 3.4 shall be made to the
nearest hundredth of a share.
As used herein: (a) the term "Fair Market Value," on a per share
basis, means the average of the daily Closing Prices (as hereinafter defined)
of the Common Stock for the five (5) consecutive Trading Days (as hereinafter
defined) ending the Trading Day immediately preceding the Date of Exercise;
(b) the term "Date of Exercise" with respect to any Warrant means the date on
which such Warrant is exercised as provided herein; (c) the term "Closing
Price" for any date shall mean the last sale price reported in The Wall
Street Journal regular way or, in case no such reported sale takes place on
such date, the average of the last reported bid and asked prices regular way,
in either case on the principal national securities exchange on which the
Common Stock is admitted to trading or listed if that is the principal market
for the Common Stock or, if not listed or admitted to trading on any national
securities exchange or if such national securities exchange is not the
principal market for the Common Stock, the last sale price as reported on The
Nasdaq Stock Market, Inc.'s National Market ("Nasdaq") or its successor, if
any, or if the Common Stock is not so reported, the average of the reported
bid and asked prices in the over-the-counter market, as furnished by the
National Quotation Bureau, Inc., or if such firm is not then engaged in the
business of reporting such prices, as furnished by any similar firm then
engaged in such business and selected by the Company or, if there is no such
firm, as furnished by any member of the National Association of Securities
Dealers, Inc. ("NASD") selected by the Company or, if the Common Stock is not
quoted in the over-the-counter market, the fair value thereof determined in
good faith by the Company's Board of Directors as of a date which is within
15 days of the date as of which the determination is to be made; and (d) the
term "Trading Days" with respect to the Common Stock means (i) if the Common
Stock is quoted on Nasdaq or any similar system of automated dissemination of
quotations of securities prices, days on which trades may be made on such
system or (ii) if the Common Stock is listed or admitted for trading on any
national securities exchange, days on which such national securities exchange
is open for business.
IV MISCELLANEOUS
Section 4.1 Payment of Taxes and Charges. The Company will pay all
taxes (other than income taxes) and other government charges in connection
with the issuance or delivery of the Warrants and the initial issuance or
delivery of Warrant Shares upon the exercise of any Warrants and payment of
the Exercise Price. The Company shall not, however, be required to pay any
additional transfer taxes in connection with the subsequent transfer of
Warrants or any transfer involved in the issuance and delivery of Warrant
Shares in a name other than the name in which the Warrants to which such
issuance relates were registered, and, if any such tax would otherwise be
payable by the Company, no such issuance or delivery shall be made unless and
until the person requesting such issuance has paid to the Company the amount
of any such tax, or it is established to the reasonable satisfaction of the
Company that any such tax has been paid.
Section 4.2.Changes to Agreement. The Company, when authorized by its
Board of Directors, with the written consent of Purchaser for so long as it
holds any Warrants or , if none, then Holders of at least a majority of the
outstanding Warrants may amend or supplement this Agreement. The Company
may, without the consent or concurrence of any Holder, by supplemental
agreement or otherwise, make any changes or corrections in this Agreement
that the Company shall have been advised by counsel (a) are required to cure
any ambiguity or to correct any defective or inconsistent provision or
clerical omission or mistake or manifest error herein contained, (b) add to
the covenants and agreements of the Company in this Agreement such further
covenants and agreements thereafter to be observed, or (c) result in the
surrender of any right or power reserved to or conferred upon the Company in
this Agreement, in each case which changes or corrections do not and will not
adversely affect, alter or change the rights, privileges or immunities of the
Holders.
Section 4.3.Assignment. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Holders shall bind and
inure to the benefit of their respective successors and permitted assigns.
Section 4.4.Successor to Company. In the event that the Company merges
or consolidates with or into any other corporation or sell or otherwise
transfers its property, assets and business substantially as an entirety to a
successor corporation, the Company shall use reasonable commercial efforts to
have such successor corporation assume each and every covenant and condition
of this Agreement to be performed and observed by the Company.
Section 4.5.Notices. Any notice or demand required by this Agreement
to be given or made by any Holder to or on the Company shall be sufficiently
given or made if sent by first-class or registered mail, postage prepaid,
addressed as follows:
Medix Resources, Inc.
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Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice or demand required by this Agreement to be given or made by the
Company to or on any Holder shall be sufficiently given or made if sent by
first-class or registered mail, postage prepaid, addressed to such Holder and
sent to the following address:
ROYCAP INC.
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Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Fogler, ▇▇▇▇▇▇▇▇ ▇▇▇
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Attn: ▇▇▇▇▇▇▇ ▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice or demand required by this Agreement to be given or made by the
Company to or on any Holder shall be sufficiently given or made, whether or
not such holder receives the notice, five (5) days after mailing, if sent by
first-class or registered mail, postage prepaid, addressed to such Holder at
its last address as shown on the books of the Company. Otherwise, such
notice or demand shall be deemed given when received by the party entitled
thereto.
Section 4.6.Defects in Notice. Failure to file any certificate or
notice or to mail any notice, or any defect in any certificate or notice
pursuant to this Agreement shall not affect in any way the rights of any
Holder or the legality or validity of any adjustment made pursuant to Section
3.1, or any transaction giving rise to any such adjustment, or the legality
or validity of any action taken or to be taken by the Company.
Section 4.7.Governing Law. The corporate laws of the State of Colorado
shall govern all issues concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New York,
without regard to the principles of conflicts of law thereof. The Company
and the Purchaser hereby irrevocably submit to the jurisdiction of either the
Province of Ontario or the State of New York, as determined by the party
initiating any proceeding, for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, or that such suit, action or
proceeding is improper. Each of the Company and the Purchaser hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by receiving a copy thereof
sent to the Company at the address in effect for notices to it under this
instrument and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any manner permitted
by law.
Section 4.8.Standing. Nothing in this Agreement expressed and nothing
that may be implied from any of the provisions hereof is intended, or shall
be construed, to confer upon, or give to, any person or corporation other
than the Company and the Holders of any right, remedy or claim under or by
reason of this Agreement or of any covenant, condition, stipulation, promise
or agreement contained herein; and all covenants, conditions, stipulations,
promises and agreements contained in this Agreement shall be for the sole and
exclusive benefit of the Company and its successors, and the Holders.
Section 4.9.Headings. The descriptive headings of the articles and
sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 4.10 Execution. This Agreement may be executed in two or
more counterparts, all of which when taken together shall be considered one
and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood
that both parties need not sign the same counterpart. In the event that any
signature is delivered by facsimile transmission, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if
such facsimile signature page were an original thereof.
Section 4.11 Availability of the Agreement. The Company shall
keep copies of this Agreement available for inspection by Holders during
normal business hours. Copies of this Agreement may be obtained upon written
request addressed to the Company at the address set forth in Section 4.5
hereof.
Section 4.12 Entire Agreement. This Agreement, including the
Exhibits referred to herein and the other writings specifically identified
herein or contemplated hereby, is complete, reflects the entire agreement of
the parties with respect to its subject matter, and supersedes all previous
written or oral negotiations, commitments and writings.
WARRANT AGREEMENT COMPANY SIGNATURE PAGE
IN WITNESS WHEREOF, this Warrant Agreement has been duly executed
by the parties as of the day and year first above written.
MEDIX RESOURCES, INC.,
a Colorado corporation
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice-President &
Chief Financial Officer
WARRANT AGREEMENT PURCHASER SIGNATURE PAGE
Accepted and Agreed as of the date first written above.
ROYCAP INC., an Ontario corporation
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇
...... Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: President and CEO
Exhibit A to Warrant Agreement
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE OR PROVINCE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
THEREUNDER AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY
LAWS.
MEDIX RESOURCES, INC.
Common Stock Purchase Warrant
Warrant No. 001-2001 Dated: January 10, 2001
Medix Resources, Inc., a Colorado corporation (the "Company"),
hereby certifies that, for value received, RoyCap Inc., an Ontario
corporation or its registered assigns (the "Holder"), is entitled, subject to
the terms and conditions set forth herein, to purchase from the Company up to
a total of 500,000 shares of common stock, $0.001 par value per share (the
"Common Stock"), of the Company (each such share, a "Warrant Share" and all
such shares, the "Warrant Shares") in multiples of one hundred (100) shares
of Common Stock, subject to the terms and conditions set forth herein. Unless
otherwise specified, capitalized terms used herein are defined in Exhibit A
attached hereto. This Warrant is governed by the Warrant Agreement.
Registration of Warrant. The Company shall register this Warrant in the
manner set forth in Section 1.3 of the Warrant Agreement.
Registration of Transfers and Exchanges.
This Warrant may only be transferred pursuant to an effective registration
statement under the Securities Act, to the Company or pursuant to an
available exemption from or in a transaction not subject to the registration
requirements of the Securities Act. In connection with any transfer of this
Warrant other than pursuant to an effective registration statement or to the
Company, the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor, the form and
substance of which opinion shall be reasonably satisfactory to the Company,
to the effect that such transfer does not require registration of such
Warrant under the Securities Act. Holder agrees to the imprinting, so long as
is required by this Section 2(a), of a legend substantially similar to that
first above written on any New Warrant (as defined below). Any such
transferee shall agree in writing to be bound by the terms of this Warrant
and shall have the rights of Holder under this Warrant. The Company shall
register the transfer of any portion of this Warrant in the records to be
maintained by the Company for that purpose (the "Warrant Register"), upon
surrender of this Warrant, with the Form of Assignment attached hereto duly
completed and signed to the Company at its address for notice set forth in
Section 10. Upon any such registration or transfer, a new warrant to
purchase Common Stock, in substantially the form of this Warrant (any such
new warrant, a "New Warrant"), evidencing the portion of this Warrant so
transferred shall be issued to the transferee and a New Warrant evidencing
the remaining portion of this Warrant not so transferred, if any, shall be
issued to the transferring Holder. The acceptance of the New Warrant by the
transferee thereof shall be deemed the acceptance of such transferee of all
of the rights and obligations of a holder of a Warrant.
This Warrant is exchangeable, upon the surrender hereof by the Holder to the
Company at its address for notice set forth in Section 10 for one or more New
Warrants, evidencing in the aggregate the right to purchase the number of
Warrant Shares which may then be purchased hereunder. Any such New Warrant
will be dated the date of such exchange.
Duration, Exercise and Redemption of Warrants.
Exercise By Holder.
(1) At any time on and after the Effective Date and prior to 5:30 p.m.
(Eastern time) on the Trading Day immediately following January 10, 2003 (the
second year anniversary of the Drawdown Date) (the "Expiration Date"), the
Holder shall be entitled to purchase all or a portion of the Warrant Shares
which have not been previously issued and with respect to which this Warrant
has not been previously redeemed or canceled in accordance with the terms
hereof; subject to the restrictions set forth herein. A "Drawdown Date" means
the date on which the Holder makes an advance of funds to the Company
pursuant to the provisions of the Convertible Note.
(2) The Holder may purchase Warrant Shares hereunder by delivering to the
Company, at its address for notice set forth in Section 10, a completed Form
of Election to Purchase in the form attached hereto, together with the
payment of the Exercise Price multiplied by the number of Warrant Shares
indicated therein. An "Exercise Date" means the date of the delivery (which
may be made via facsimile) of the Form of Election to Purchase and applicable
Exercise Price.
(3) No later than the third Trading Day following delivery of each Form of
Election to Purchase and the applicable Exercise Price, the Company shall
promptly issue or cause to be issued and cause to be delivered to or upon the
written order of the Holder and in such name or names as the Holder may
designate, a certificate for the Warrant Shares issuable upon such exercise,
free of restrictive legends except as required by the Purchase Agreement.
i) If the Company fails to deliver to the Holder the certificate or
certificates pursuant to this Section within the time specified above, the
Holder shall be entitled by written notice to the Company at any time on or
before its receipt of such certificate or certificates thereafter, to rescind
such exercise.
ii) In addition to the rights set forth in (A) above, if the Company fails
to deliver to the Holder such certificate or certificates pursuant to this
Section within the time specified above, and if after such time the Holder
purchases (in an open market transaction or otherwise) Common Stock to
deliver in satisfaction of a sale by such Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a "Buy-In"), then the
Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder's total purchase price (including brokerage commissions, if any) for
the Common Stock so purchased exceeds (y) the product of (i) the aggregate
number of Warrant Shares that such Holder anticipated receiving from the
exercise at issue multiplied by (ii) the volume weighted average Per Share
Market Value on the Exercise Date and (2) at the option of the Holder, either
rescind the exercise at issue or deliver to the Holder the number of Warrant
Shares that would have been issued had the Company timely complied with its
delivery requirements under this Section. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted exercise with respect to which the volume
weighted average Per Share Market Value on the Exercise Date was a total of
$10,000, the Company shall be required to pay the Holder $1,000. The Holder
shall provide the Company written notice indicating the amounts payable to
the Holder in respect of the Buy-In.
Exercise Price.
The "Exercise Price" applicable to an exercise pursuant to
Section 3(a) shall equal One Dollar and Seventy Five Cents US (US $1.75)
(subject to equitable adjustment for stock splits, reverse splits,
combinations and other similar events in accordance with Section 7 hereof).
Payment of Taxes. The Company will pay all documentary stamp taxes
attributable to the issuance of Warrant Shares upon the exercise of this
Warrant; 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
registration of any certificates for Warrant Shares or Warrants in a name
other than that of the Holder. The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring this
Warrant or receiving Warrant Shares upon exercise hereof.
Replacement of Warrant. If this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue, execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated Warrant, or in lieu of
or in substitution for a lost, stolen or destroyed Warrant, a New Warrant
representing an equivalent number of Warrants or Warrant Shares. If required
by the Company, the Holder must provide indemnity sufficient to protect the
Company from any loss which it may suffer if the Warrant is replaced. Any
such New Warrant shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.
Reservation of Warrant Shares. The Company covenants that it will at all
times reserve and keep available out of the aggregate of its authorized but
unissued Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of
Warrant Shares which are then issuable and deliverable upon the exercise of
this entire Warrant, free from preemptive rights or any other actual
contingent purchase rights of persons other than the Holder (taking into
account the adjustments and restrictions of Section 7). The Company covenants
that all Warrant Shares that shall be so issuable and deliverable shall, upon
issuance and the payment of the applicable Exercise Price in accordance with
the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable.
Certain Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant is subject to adjustment from time to
time as set forth in Article III of the Warrant Agreement.
Payment of Exercise Price. The Holder shall pay the Exercise Price for
Warrant Shares purchased hereunder by delivery of immediately available funds
unless otherwise agreed by the Company.
Fractional Shares. The Company shall not be required to issue or cause to be
issued fractional Warrant Shares on the exercise of this Warrant. The number
of full Warrant Shares which shall be issuable upon the exercise of this
Warrant shall be computed on the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant so presented. If any fraction
of a Warrant Share would, except for the provisions of this Section, be
issuable on the exercise of this Warrant, the Company shall pay an amount in
cash equal to the Exercise Price multiplied by such fraction.
Notices. Any and all notices or other communications or deliveries hereunder
shall be in writing and shall be deemed given and effective on the earliest
of (i) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile telephone number specified in this Section
prior to 8:00 p.m. (Denver time) on a business day, (ii) the business day
after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile telephone number specified in this Section
later than 8:00 p.m (Denver time) on any date and earlier than 11:59 p.m.
(Denver time) on such date, (iii) the business day following the date of
mailing, if sent by nationally recognized overnight courier service, or (iv)
if sent other than by the methods set forth in (i)-(iii) of this section,
upon actual receipt by the party to whom such notice is required to be
given. The addresses for such communications shall be: (i) if to the
Company, to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, or to Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, or
(ii) if to the Holder, to the Holder at the address or facsimile number
appearing on the Warrant Register or such other address or facsimile number
as the Holder may provide to the Company in accordance with this Section.
Warrant Agent. The Company shall serve as warrant agent under this Warrant.
Upon thirty (30) days' notice to the Holder, the Company may appoint a new
warrant agent. Any corporation into which the Company or any new warrant
agent may be merged or any corporation resulting from any consolidation to
which the Company or any new warrant agent shall be a party or any
corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business
shall be a successor warrant agent under this Warrant without any further
act. Any such successor warrant agent shall promptly cause notice of its
succession as warrant agent to be mailed (by first class mail, postage
prepaid) to the Holder at the Holder's last address as shown on the Warrant
Register.
Miscellaneous.
This Warrant shall be binding on and inure to the benefit of the parties
hereto and their respective successors and assigns. This Warrant may be
amended only in writing signed by the Company and the Holder and their
successors and permitted assigns.
Subject to Section 12(a), above, nothing in this Warrant shall be construed
to give to any person or corporation other than the Company and the Holder
any legal or equitable right, remedy or cause under this Warrant. This
Warrant shall inure to the sole and exclusive benefit of the Company and the
Holder.
The corporate laws of the State of Colorado shall govern all issues
concerning the relative rights of the Company and its stockholders. All
other questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without
regard to the principles of conflicts of law thereof. The Company and the
Holder hereby irrevocably submit to the jurisdictions of either the Province
of Ontario or in the State of New York, as determined by the party initiating
any proceeding, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, or that such suit, action or proceeding is
improper. Each of the Company and the Holder hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by receiving a copy thereof sent to the Company at
the address in effect for notices to it under this instrument and agrees that
such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law.
The headings herein are for convenience only, do not constitute a part of
this Warrant and shall not be deemed to limit or affect any of the provisions
hereof.
In case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Warrant shall not in any way be
affected or impaired thereby and the parties will attempt in good faith to
agree upon a valid and enforceable provision which shall be a commercially
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed by its authorized officer as of the date first indicated above.
MEDIX RESOURCES, INC.
By: _______________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice-President and
Chief Financial Officer
FORM OF ELECTION TO PURCHASE
(To be executed by the Holder to exercise the right to purchase shares of
Common Stock under the foregoing Warrant)
To Medix Resources, Inc.:
In accordance with the Warrant enclosed with this Form of
Election to Purchase, the undersigned hereby irrevocably elects to purchase
_____________ shares of common stock, $.001 par value per share, of Medix
Resources, Inc. (the "Common Stock") and encloses herewith $________ in cash
by wire transfer, or by certified or official bank check or checks, which sum
represents the aggregate Exercise Price (as defined in the Warrant) for the
number of shares of Common Stock to which this Form of Election to Purchase
relates, together with any applicable taxes payable by the undersigned
pursuant to the Warrant.
The undersigned requests that certificates for the shares of
Common Stock issuable upon this exercise be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print name and address)
If the number of shares of Common Stock issuable upon this
exercise shall not be all of the shares of Common Stock which the undersigned
is entitled to purchase in accordance with the enclosed Warrant, the
undersigned requests that a New Warrant (as defined in the Warrant)
evidencing the right to purchase the shares of Common Stock not issuable
pursuant to the exercise evidenced hereby be issued in the name of and
delivered to:
------------------------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated: _____, _____ Name of Holder:
(Print)________________________________________________________________________
(By:) _________________________________________________________________________
(Name:)
(Title:)
(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant)
FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________ the right represented by the
within Warrant to purchase ____________ shares of Common Stock of Medix
Resources, Inc. to which the within Warrant relates and appoints
________________ attorney to transfer said right on the books of Medix
Resources, Inc. with full power of substitution in the premises.
Dated:
---------------, ----------
-----------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant)
-----------------------------------
Address of Transferee
===================================
In the presence of:
-----------------------------------------
Exhibit A
1. "Business Day" means any day except Saturday, Sunday and any day which
shall be a federal legal holiday or a day on which banking institutions in
the State of Colorado are authorized or required by law or other
governmental action to close.
2. "Commission" means the Securities and Exchange Commission.
3. "Convertible Note" means the Convertible Note dated December 29, 2000
issued by the Company in favour of the Holder which permits the Company to
draw up to two million five hundred thousand US Dollars (US$2,500,000).
4. "Effective Date" means the date the Underlying Shares Registration
Statement is declared effective by the Commission and notice of such
effectiveness is delivered to Holder.
5. "Per Share Market Value" means on any particular date (a) the aggregate
price of Common Stock sold on such date on the American Stock Exchange or
on such subsequent market on which the shares of Common Stock are then
listed or quoted divided by the number of shares of Common Stock so sold,
or if there is no such price on such date, then the closing price on the
American Stock Exchange or on such subsequent market on the date nearest
preceding such date, or (b) if the shares of Common Stock are not then
listed or quoted on the American Stock Exchange or a subsequent m arket,
the closing bid price for a share of Common Stock in the over-the-counter
market, as reported by the National Quotation Bureau Incorporated or
similar organization or agency succeeding to its functions of reporting
prices) at the close of business on such date, or (c) if the shares of
Common Stock are not then reported by the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions
of reporting prices), then the average of the "Pink Sheet" quotes for the
relevant conversion period, as determined in good faith by the Holder, or
(d) if the shares of Common Stock are not then publicly traded, the fair
market value of a share of Common Stock as determined by an Appraiser
selected in good faith by the Holder.
6. "Purchase Agreement" means the Securities Purchase Agreement dated as of
December 29, 2000 to which the Company and the Holder hereof are parties.
7. "Trading Day" means (a) a day on which the shares of Common Stock are
traded on the American Stock Exchange or on such subsequent market on which
the shares of Common Stock are then listed or quoted, or (b) if the shares
of Common Stock are not listed on the American Stock Exchange or a
subsequent market, a day on which the shares of Common Stock are traded in
the over-the-counter market, as reported by the OTC Bulletin Board, or
(c) if the shares of Common Stock are not quoted on the OTC Bulletin Board,
a day on which the shares of Common Stock are quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding its
functions of reporting prices); provided, however, that in the event that
the shares of Common Stock are not listed or quoted as set forth in (a),
(b) and (c) hereof, then Trading Day shall mean a Business Day.
8. "Underlying Shares Registration Statement" shall have the meaning set forth
in the Purchase Agreement.
9. "Warrant Agreement" means the Warrant Agreement dated as of the December
29, 2000 to which the Company and the Holder hereof are parties.
Exhibit B to Warrant Agreement
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE OR PROVINCE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
THEREUNDER AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY
LAWS.
MEDIX RESOURCES, INC.
Common Stock Purchase Warrant
Warrant No. o Dated: o, 2001
Medix Resources, Inc., a Colorado corporation (the "Company"),
hereby certifies that, for value received, RoyCap Inc., an Ontario
corporation or its registered assigns (the "Holder"), is entitled, subject to
the terms and conditions set forth herein, to purchase from the Company up to
a total of 250,000 shares of common stock, $0.001 par value per share (the
"Common Stock"), of the Company (each such share, a "Warrant Share" and all
such shares, the "Warrant Shares") in multiples of one hundred (100) shares
of Common Stock, subject to the terms and conditions set forth herein. Unless
otherwise specified, capitalized terms used herein are defined in Exhibit A
attached hereto. This Warrant is governed by the Warrant Agreement.
Registration of Warrant. The Company shall register this Warrant in the
manner set forth in Section 1.3 of the Warrant Agreement.
Registration of Transfers and Exchanges.
This Warrant may only be transferred pursuant to an effective registration
statement under the Securities Act, to the Company or pursuant to an
available exemption from or in a transaction not subject to the registration
requirements of the Securities Act. In connection with any transfer of this
Warrant other than pursuant to an effective registration statement or to the
Company, the Company may require the transferor thereof to provide to the
Company an opinion of counsel selected by the transferor, the form and
substance of which opinion shall be reasonably satisfactory to the Company,
to the effect that such transfer does not require registration of such
Warrant under the Securities Act. Holder agrees to the imprinting, so long as
is required by this Section 2(a), of a legend substantially similar to that
first above written on any New Warrant (as defined below). Any such
transferee shall agree in writing to be bound by the terms of this Warrant
and shall have the rights of Holder under this Warrant. The Company shall
register the transfer of any portion of this Warrant in the records to be
maintained by the Company for that purpose (the "Warrant Register"), upon
surrender of this Warrant, with the Form of Assignment attached hereto duly
completed and signed to the Company at its address for notice set forth in
Section 10. Upon any such registration or transfer, a new warrant to
purchase Common Stock, in substantially the form of this Warrant (any such
new warrant, a "New Warrant"), evidencing the portion of this Warrant so
transferred shall be issued to the transferee and a New Warrant evidencing
the remaining portion of this Warrant not so transferred, if any, shall be
issued to the transferring Holder. The acceptance of the New Warrant by the
transferee thereof shall be deemed the acceptance of such transferee of all
of the rights and obligations of a holder of a Warrant.
This Warrant is exchangeable, upon the surrender hereof by the Holder to the
Company at its address for notice set forth in Section 10 for one or more New
Warrants, evidencing in the aggregate the right to purchase the number of
Warrant Shares which may then be purchased hereunder. Any such New Warrant
will be dated the date of such exchange.
Duration, Exercise and Redemption of Warrants.
Exercise By Holder.
(4) At any time on and after the Effective Date and prior to 5:30 p.m.
(Eastern time) on the Trading Day immediately following [insert date] (the
second year anniversary of the Drawdown Date) (the "Expiration Date"), the
Holder shall be entitled to purchase all or a portion of the Warrant Shares
which have not been previously issued and with respect to which this Warrant
has not been previously redeemed or canceled in accordance with the terms
hereof; subject to the restrictions set forth herein. A "Drawdown Date" means
the date on which the Holder makes an advance of funds to the Company
pursuant to the provisions of the Convertible Note.
(5) The Holder may purchase Warrant Shares hereunder by delivering to the
Company, at its address for notice set forth in Section 10, a completed Form
of Election to Purchase in the form attached hereto, together with the
payment of the Exercise Price multiplied by the number of Warrant Shares
indicated therein. An "Exercise Date" means the date of the delivery (which
may be made via facsimile) of the Form of Election to Purchase and applicable
Exercise Price.
(6) No later than the third Trading Day following delivery of each Form of
Election to Purchase and the applicable Exercise Price, the Company shall
promptly issue or cause to be issued and cause to be delivered to or upon the
written order of the Holder and in such name or names as the Holder may
designate, a certificate for the Warrant Shares issuable upon such exercise,
free of restrictive legends except as required by the Purchase Agreement.
i) If the Company fails to deliver to the Holder the certificate or
certificates pursuant to this Section within the time specified above, the
Holder shall be entitled by written notice to the Company at any time on or
before its receipt of such certificate or certificates thereafter, to rescind
such exercise.
ii) In addition to the rights set forth in (A) above, if the Company fails
to deliver to the Holder such certificate or certificates pursuant to this
Section within the time specified above, and if after such time the Holder
purchases (in an open market transaction or otherwise) Common Stock to
deliver in satisfaction of a sale by such Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a "Buy-In"), then the
Company shall (1) pay in cash to the Holder the amount by which (x) the
Holder's total purchase price (including brokerage commissions, if any) for
the Common Stock so purchased exceeds (y) the product of (i) the aggregate
number of Warrant Shares that such Holder anticipated receiving from the
exercise at issue multiplied by (ii) the volume weighted average Per Share
Market Value on the Exercise Date and (2) at the option of the Holder, either
rescind the exercise at issue or deliver to the Holder the number of Warrant
Shares that would have been issued had the Company timely complied with its
delivery requirements under this Section. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted exercise with respect to which the volume
weighted average Per Share Market Value on the Exercise Date was a total of
$10,000, the Company shall be required to pay the Holder $1,000. The Holder
shall provide the Company written notice indicating the amounts payable to
the Holder in respect of the Buy-In.
Exercise Price.
The "Exercise Price" applicable to an exercise pursuant to
Section 3(a) shall equal One Dollar and Seventy-Five Cents U.S. (US$1.75)
(subject to equitable adjustment for stock splits, reverse splits,
combinations and other similar events in accordance with Section 7 hereof).
Payment of Taxes. The Company will pay all documentary stamp taxes
attributable to the issuance of Warrant Shares upon the exercise of this
Warrant; 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
registration of any certificates for Warrant Shares or Warrants in a name
other than that of the Holder. The Holder shall be responsible for all other
tax liability that may arise as a result of holding or transferring this
Warrant or receiving Warrant Shares upon exercise hereof.
Replacement of Warrant. If this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue, execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated Warrant, or in lieu of
or in substitution for a lost, stolen or destroyed Warrant, a New Warrant
representing an equivalent number of Warrants or Warrant Shares. If required
by the Company, the Holder must provide indemnity sufficient to protect the
Company from any loss which it may suffer if the Warrant is replaced. Any
such New Warrant shall constitute an original contractual obligation of the
Company, whether or not the allegedly lost, stolen, mutilated or destroyed
Warrant shall be at any time enforceable by anyone.
Reservation of Warrant Shares. The Company covenants that it will at all
times reserve and keep available out of the aggregate of its authorized but
unissued Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of
Warrant Shares which are then issuable and deliverable upon the exercise of
this entire Warrant, free from preemptive rights or any other actual
contingent purchase rights of persons other than the Holder (taking into
account the adjustments and restrictions of Section 7). The Company covenants
that all Warrant Shares that shall be so issuable and deliverable shall, upon
issuance and the payment of the applicable Exercise Price in accordance with
the terms hereof, be duly and validly authorized, issued and fully paid and
nonassessable.
Certain Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant is subject to adjustment from time to
time as set forth in Article III of the Warrant Agreement.
Payment of Exercise Price. The Holder shall pay the Exercise Price for
Warrant Shares purchased hereunder by delivery of immediately available funds
unless otherwise agreed by the Company.
Fractional Shares. The Company shall not be required to issue or cause to be
issued fractional Warrant Shares on the exercise of this Warrant. The number
of full Warrant Shares which shall be issuable upon the exercise of this
Warrant shall be computed on the basis of the aggregate number of Warrant
Shares purchasable on exercise of this Warrant so presented. If any fraction
of a Warrant Share would, except for the provisions of this Section, be
issuable on the exercise of this Warrant, the Company shall pay an amount in
cash equal to the Exercise Price multiplied by such fraction.
Notices. Any and all notices or other communications or deliveries hereunder
shall be in writing and shall be deemed given and effective on the earliest
of (i) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile telephone number specified in this Section
prior to 8:00 p.m. (Denver time) on a business day, (ii) the business day
after the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile telephone number specified in this Section
later than 8:00 p.m (Denver time) on any date and earlier than 11:59 p.m.
(Denver time) on such date, (iii) the business day following the date of
mailing, if sent by nationally recognized overnight courier service, or (iv)
if sent other than by the methods set forth in (i)-(iii) of this section,
upon actual receipt by the party to whom such notice is required to be
given. The addresses for such communications shall be: (i) if to the
Company, to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇, Attention: President, or to Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇, or (ii) if
to the Holder, to the Holder at the address or facsimile number appearing on
the Warrant Register or such other address or facsimile number as the Holder
may provide to the Company in accordance with this Section.
Warrant Agent. The Company shall serve as warrant agent under this Warrant.
Upon thirty (30) days' notice to the Holder, the Company may appoint a new
warrant agent. Any corporation into which the Company or any new warrant
agent may be merged or any corporation resulting from any consolidation to
which the Company or any new warrant agent shall be a party or any
corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business
shall be a successor warrant agent under this Warrant without any further
act. Any such successor warrant agent shall promptly cause notice of its
succession as warrant agent to be mailed (by first class mail, postage
prepaid) to the Holder at the Holder's last address as shown on the Warrant
Register.
Miscellaneous.
This Warrant shall be binding on and inure to the benefit of the parties
hereto and their respective successors and assigns. This Warrant may be
amended only in writing signed by the Company and the Holder and their
successors and permitted assigns.
Subject to Section 12(a), above, nothing in this Warrant shall be construed
to give to any person or corporation other than the Company and the Holder
any legal or equitable right, remedy or cause under this Warrant. This
Warrant shall inure to the sole and exclusive benefit of the Company and the
Holder.
The corporate laws of the State of Colorado shall govern all issues
concerning the relative rights of the Company and its stockholders. All
other questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without regard
to the principles of conflicts of law thereof. The Company and the Holder
hereby irrevocably submit to the jurisdictions of either the Province of
Ontario or the state of New York, as determined by the party initiating any
proceeding, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, or that such suit, action or proceeding is improper. Each
of the Company and the Holder hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by receiving a copy thereof sent to the Company at the address in
effect for notices to it under this instrument and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law.
The headings herein are for convenience only, do not constitute a part of
this Warrant and shall not be deemed to limit or affect any of the provisions
hereof.
In case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the
remaining terms and provisions of this Warrant shall not in any way be
affected or impaired thereby and the parties will attempt in good faith to
agree upon a valid and enforceable provision which shall be a commercially
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed by its authorized officer as of the date first indicated above.
MEDIX RESOURCES, INC.
By: _____________________________
Name:
Title:
FORM OF ELECTION TO PURCHASE
(To be executed by the Holder to exercise the right to purchase shares of
Common Stock under the foregoing Warrant)
To Medix Resources, Inc.:
In accordance with the Warrant enclosed with this Form of
Election to Purchase, the undersigned hereby irrevocably elects to purchase
_____________ shares of common stock, $.001 par value per share, of Medix
Resources, Inc. (the "Common Stock") and encloses herewith $________ in cash
by wire transfer, or by certified or official bank check or checks, which sum
represents the aggregate Exercise Price (as defined in the Warrant) for the
number of shares of Common Stock to which this Form of Election to Purchase
relates, together with any applicable taxes payable by the undersigned
pursuant to the Warrant.
The undersigned requests that certificates for the shares of
Common Stock issuable upon this exercise be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print name and address)
If the number of shares of Common Stock issuable upon this
exercise shall not be all of the shares of Common Stock which the undersigned
is entitled to purchase in accordance with the enclosed Warrant, the
undersigned requests that a New Warrant (as defined in the Warrant)
evidencing the right to purchase the shares of Common Stock not issuable
pursuant to the exercise evidenced hereby be issued in the name of and
delivered to:
------------------------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated: _____, _____ Name of Holder:
(Print)_______________________________________________________________________
(By:) ________________________________________________________________________
(Name:)
(Title:)
(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant)
FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________ the right represented by the
within Warrant to purchase ____________ shares of Common Stock of Medix
Resources, Inc. to which the within Warrant relates and appoints
________________ attorney to transfer said right on the books of Medix
Resources, Inc. with full power of substitution in the premises.
Dated:
---------------, ----------
-------------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant)
-------------------------------------
Address of Transferee
=====================================
----------------------------------------
In the presence of:
-------------------------------------
Exhibit A
1. "Business Day" means any day except Saturday, Sunday and any day which
shall be a federal legal holiday or a day on which banking institutions in
the State of Colorado are authorized or required by law or other
governmental action to close.
2. "Commission" means the Securities and Exchange Commission.
3. "Convertible Note" means the Convertible Note dated December 29, 2000
issued by the Company in favour of the Holder which permits the Company to
draw up to two million five hundred thousand US Dollars (US$2,500,000).
4. "Effective Date" means the date the Underlying Shares Registration
Statement is declared effective by the Commission and notice of such
effectiveness is delivered to Holder.
5. "Per Share Market Value" means on any particular date (a) the aggregate
price of Common Stock sold on such date on the American Stock Exchange or
on such Subsequent Market on which the shares of Common Stock are then
listed or quoted divided by the number of shares of Common Stock so sold,
or if there is no such price on such date, then the closing price on the
American Stock Exchange or on such Subsequent Market on the date nearest
preceding such date, or (b) if the shares of Common Stock are not then
listed or quoted on the American Stock Exchange or a Subsequent Market, the
closing bid price for a share of Common Stock in the over-the-counter
market, as reported by the National Quotation Bureau Incorporated or
similar organization or agency succeeding to its functions of reporting
prices) at the close of business on such date, or (c) if the shares of
Common Stock are not then reported by the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions
of reporting prices), then the average of the "Pink Sheet" quotes for the
relevant conversion period, as determined in good faith by the Holder, or
(d) if the shares of Common Stock are not then publicly traded, the fair
market value of a share of Common Stock as determined by an Appraiser
selected in good faith by the Holder.
6. "Purchase Agreement" means the Securities Purchase Agreement dated as of
December 29, 2000 to which the Company and the Holder hereof are parties.
7. "Trading Day" means (a) a day on which the shares of Common Stock are
traded on the American Stock Exchange or on such Subsequent Market on which
the shares of Common Stock are then listed or quoted, or (b) if the shares
of Common Stock are not listed on the American Stock Exchange or a
Subsequent Market, a day on which the shares of Common Stock are traded in
the over-the-counter market, as reported by the OTC Bulletin Board, or
(c) if the shares of Common Stock are not quoted on the OTC Bulletin Board,
a day on which the shares of Common Stock are quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding its
functions of reporting prices); provided, however, that in the event that
the shares of Common Stock are not listed or quoted as set forth in (a),
(b) and (c) hereof, then Trading Day shall mean a Business Day.
8."Underlying Shares Registration Statement" shall have the meaning set forth in
the Purchase Agreement.
9. "Warrant Agreement" means the Warrant Agreement dated as of the December
29, 2000 to which the Company and the Holder hereof are parties.
Exhibit C to Warrant Agreement
NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE OR PROVINCE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
THEREUNDER AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES OR BLUE SKY
LAWS.
MEDIX RESOURCES, INC.
Common Stock Purchase Call Warrant
Warrant No. o Dated: o, 2001
Medix Resources, Inc., a Colorado corporation (the "Company"),
hereby certifies that, for value received, RoyCap Inc., an Ontario
corporation or its registered assigns (the "Holder"), is entitled, subject to
the terms and conditions set forth herein, to purchase from the Company up to
a total of 750,000 shares of common stock, $0.001 par value per share (the
"Common Stock"), of the Company (each such share, a "Warrant Share" and all
such shares, the "Warrant Shares") in multiples of one hundred (100) shares
of Common Stock, subject to the terms and conditions set forth herein. Unless
otherwise specified, capitalized terms used herein are defined in Exhibit A
attached hereto. This Warrant is governed by the Warrant Agreement.
(a) Registration of Warrant. The Company shall register this Warrant in the
manner set forth in Section 1.3 of the Warrant Agreement.
(b) Registration of Transfers and Exchanges.
(i) This Warrant may only be transferred pursuant to an effective
registration statement under the Securities Act, to the Company or
pursuant to an available exemption from or in a transaction not
subject to the registration requirements of the Securities Act. In
connection with any transfer of this Warrant other than pursuant to an
effective registration statement or to the Company, the Company may
require the transferor thereof to provide to the Company an opinion of
counsel selected by the transferor, the form and substance of which
opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such Warrant under
the Securities Act. Holder agrees to the imprinting, so long as is
required by this Section 2(a), of a legend substantially similar to
that first above written on any New Warrant (as defined below). Any
such transferee shall agree in writing to be bound by the terms of
this Warrant and shall have the rights of Holder under this Warrant.
The Company shall register the transfer of any portion of this Warrant
in the records to be maintained by the Company for that purpose (the
"Warrant Register"), upon surrender of this Warrant, with the Form of
Assignment attached hereto duly completed and signed to the Company at
its address for notice set forth in Section 10. Upon any such
registration or transfer, a new warrant to purchase Common Stock, in
substantially the form of this Warrant (any such new warrant, a "New
Warrant"), evidencing the portion of this Warrant so transferred shall
be issued to the transferee and a New Warrant evidencing the remaining
portion of this Warrant not so transferred, if any, shall be issued to
the transferring Holder. The acceptance of the New Warrant by the
transferee thereof shall be deemed the acceptance of such transferee
of all of the rights and obligations of a holder of a Warrant.
(ii) This Warrant is exchangeable, upon the surrender hereof by the Holder
to the Company at its address for notice set forth in Section 10 for
one or more New Warrants, evidencing in the aggregate the right to
purchase the number of Warrant Shares which may then be purchased
hereunder. Any such New Warrant will be dated the date of such
exchange. (c) Duration, Exercise and Redemption of Warrants. (i)
Exercise By Holder.
(1) At any time on or before the forty-fifth (45th) day from the
Effective Date (the "Expiration Date"), the Holder shall be
entitled to purchase all or a portion of the Warrant Shares which
have not been previously issued and with respect to which this
Warrant has not been previously redeemed or canceled in
accordance with the terms hereof; subject to the restrictions set
forth herein.
(2) The Holder may purchase Warrant Shares hereunder by delivering to
the Company, at its address for notice set forth in Section 10, a
completed Form of Election to Purchase in the form attached
hereto, together with the payment of the Exercise Price
multiplied by the number of Warrant Shares indicated therein. An
"Exercise Date" means the date of the delivery (which may be made
via facsimile) of the Form of Election to Purchase and applicable
Exercise Price.
(3) No later than the third Trading Day following delivery of each
Form of Election to Purchase and the applicable Exercise Price,
the Company shall promptly issue or cause to be issued and cause
to be delivered to or upon the written order of the Holder and in
such name or names as the Holder may designate, a certificate for
the Warrant Shares issuable upon such exercise, free of
restrictive legends except as required by the Purchase Agreement.
If the Company fails to deliver to the Holder the certificate or
certificates pursuant to this Section within the time specified
above, the Holder shall be entitled by written notice to the
Company at any time on or before its receipt of such certificate
or certificates thereafter, to rescind such exercise.
In addition to the rights set forth in (A)
above, if the Company fails to deliver to the Holder such certificate or
certificates pursuant to this Section within the time specified above, and if
after such time the Holder purchases (in an open market transaction or
otherwise) Common Stock to deliver in satisfaction of a sale by such Holder
of the Warrant Shares which the Holder anticipated receiving upon such
exercise (a "Buy-In"), then the Company shall (1) pay in cash to the Holder
the amount by which (x) the Holder's total purchase price (including
brokerage commissions, if any) for the Common Stock so purchased exceeds (y)
the product of (i) the aggregate number of Warrant Shares that such Holder
anticipated receiving from the exercise at issue multiplied by (ii) the
volume weighted average Per Share Market Value on the Exercise Date and (2)
at the option of the Holder, either rescind the exercise at issue or deliver
to the Holder the number of Warrant Shares that would have been issued had
the Company timely complied with its delivery requirements under this
Section. For example, if the Holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise with respect to which the volume weighted average Per Share Market
Value on the Exercise Date was a total of $10,000, the Company shall be
required to pay the Holder $1,000. The Holder shall provide the Company
written notice indicating the amounts payable to the Holder in respect of the
Buy-In.
(ii) Exercise Price.
The "Exercise Price" applicable to an exercise pursuant to
Section 3(a) shall equal Ninety US Cents (US$0.90) (subject to equitable
adjustment for stock splits, reverse splits, combinations and other similar
events in accordance with Section 7 hereof).
(d) Payment of Taxes. The Company will pay all documentary stamp taxes
attributable to the issuance of Warrant Shares upon the exercise of this
Warrant; 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
registration of any certificates for Warrant Shares or Warrants in a name
other than that of the Holder. The Holder shall be responsible for all
other tax liability that may arise as a result of holding or transferring
this Warrant or receiving Warrant Shares upon exercise hereof.
(e) Replacement of Warrant. If this Warrant shall be mutilated, lost, stolen or
destroyed, the Company shall issue, execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated Warrant, or in lieu
of or in substitution for a lost, stolen or destroyed Warrant, a New
Warrant representing an equivalent number of Warrants or Warrant Shares. If
required by the Company, the Holder must provide indemnity sufficient to
protect the Company from any loss which it may suffer if the Warrant is
replaced. Any such New Warrant shall constitute an original contractual
obligation of the Company, whether or not the allegedly lost, stolen,
mutilated or destroyed Warrant shall be at any time enforceable by anyone.
(f) Reservation of Warrant Shares. The Company covenants that it will at all
times reserve and keep available out of the aggregate of its authorized but
unissued Common Stock, solely for the purpose of enabling it to issue
Warrant Shares upon exercise of this Warrant as herein provided, the number
of Warrant Shares which are then issuable and deliverable upon the exercise
of this entire Warrant, free from preemptive rights or any other actual
contingent purchase rights of persons other than the Holder (taking into
account the adjustments and restrictions of Section 7). The Company
covenants that all Warrant Shares that shall be so issuable and deliverable
shall, upon issuance and the payment of the applicable Exercise Price in
accordance with the terms hereof, be duly and validly authorized, issued
and fully paid and nonassessable.
(g) Certain Adjustments. The Exercise Price and number of Warrant Shares
issuable upon exercise of this Warrant is subject to adjustment from time
to time as set forth in Article III of the Warrant Agreement.
(h) Payment of Exercise Price. The Holder shall pay the Exercise Price for
Warrant Shares purchased hereunder by delivery of immediately available
funds unless otherwise agreed by the Company.
(i) Fractional Shares. The Company shall not be required to issue or cause to
be issued fractional Warrant Shares on the exercise of this Warrant. The
number of full Warrant Shares which shall be issuable upon the exercise of
this Warrant shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of this Warrant so presented. If any
fraction of a Warrant Share would, except for the provisions of this
Section, be issuable on the exercise of this Warrant, the Company shall pay
an amount in cash equal to the Exercise Price multiplied by such fraction.
(j) Notices. Any and all notices or other communications or deliveries
hereunder shall be in writing and shall be deemed given and effective on
the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section prior to 8:00 p.m. (Denver time) on a business
day, (ii) the business day after the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile telephone
number specified in this Section later than 8:00 p.m (Denver time) on any
date and earlier than 11:59 p.m. (Denver time) on such date, (iii) the
business day following the date of mailing, if sent by nationally
recognized overnight courier service, or (iv) if sent other than by the
methods set forth in (i)-(iii) of this section, upon actual receipt by the
party to whom such notice is required to be given. The addresses for such
communications shall be: (i) if to the Company, to ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, Attention:o, or to Facsimile
No. (▇▇▇) ▇▇▇-▇▇▇▇, or (ii) if to the Holder, to the Holder at the address
or facsimile number appearing on the Warrant Register or such other address
or facsimile number as the Holder may provide to the Company in accordance
with this Section.
(k) Warrant Agent. The Company shall serve as warrant agent under this Warrant.
Upon thirty (30) days' notice to the Holder, the Company may appoint a new
warrant agent. Any corporation into which the Company or any new warrant
agent may be merged or any corporation resulting from any consolidation to
which the Company or any new warrant agent shall be a party or any
corporation to which the Company or any new warrant agent transfers
substantially all of its corporate trust or shareholders services business
shall be a successor warrant agent under this Warrant without any further
act. Any such successor warrant agent shall promptly cause notice of its
succession as warrant agent to be mailed (by first class mail, postage
prepaid) to the Holder at the Holder's last address as shown on the Warrant
Register.
(l) Miscellaneous.
(i) This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns. This
Warrant may be amended only in writing signed by the Company and the
Holder and their successors and permitted assigns.
(ii) Subject to Section 12(a), above, nothing in this Warrant shall be
construed to give to any person or corporation other than the Company
and the Holder any legal or equitable right, remedy or cause under
this Warrant. This Warrant shall inure to the sole and exclusive
benefit of the Company and the Holder. (iii) The corporate laws of the
State of Colorado shall govern all issues concerning the relative
rights of the Company and its stockholders. All other questions
concerning the construction, validity, enforcement and interpretation
of this Warrant shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without regard to
the principles of conflicts of law thereof. The Company and the Holder
hereby irrevocably submit to the jurisdiction of either the Province
of Ontario or the State of New York, as determined by the party
initiating any proceeding, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any
such court, or that such suit, action or proceeding is improper. Each
of the Company and the Holder hereby irrevocably waives personal
service of process and consents to process being served in any such
suit, action or proceeding by receiving a copy thereof sent to the
Company at the address in effect for notices to it under this
instrument and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.
(iv) The headings herein are for convenience only, do not constitute a part
of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.
(v) In case any one or more of the provisions of this Warrant shall be
invalid or unenforceable in any respect, the validity and
enforceability of the remaining terms and provisions of this Warrant
shall not in any way be affected or impaired thereby and the parties
will attempt in good faith to agree upon a valid and enforceable
provision which shall be a commercially reasonable substitute
therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
duly executed by its authorized officer as of the date first indicated above.
MEDIX RESOURCES, INC.
By: ______________________________
Name:
Title:
FORM OF ELECTION TO PURCHASE
(To be executed by the Holder to exercise the right to purchase shares of
Common Stock under the foregoing Warrant)
To Medix Resources, Inc.:
In accordance with the Warrant enclosed with this Form of
Election to Purchase, the undersigned hereby irrevocably elects to purchase
_____________ shares of common stock, $.001 par value per share, of Medix
Resources, Inc. (the "Common Stock") and encloses herewith $________ in cash
by wire transfer, or by certified or official bank check or checks, which sum
represents the aggregate Exercise Price (as defined in the Warrant) for the
number of shares of Common Stock to which this Form of Election to Purchase
relates, together with any applicable taxes payable by the undersigned
pursuant to the Warrant.
The undersigned requests that certificates for the shares of
Common Stock issuable upon this exercise be issued in the name of
PLEASE INSERT SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print name and address)
If the number of shares of Common Stock issuable upon this
exercise shall not be all of the shares of Common Stock which the undersigned
is entitled to purchase in accordance with the enclosed Warrant, the
undersigned requests that a New Warrant (as defined in the Warrant)
evidencing the right to purchase the shares of Common Stock not issuable
pursuant to the exercise evidenced hereby be issued in the name of and
delivered to:
------------------------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated: _____, _____ Name of Holder:
(Print)_______________________________________________________________________
(By:) ________________________________________________________________________
(Name:)
(Title:)
(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant)
FORM OF ASSIGNMENT
[To be completed and signed only upon transfer of Warrant]
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ________________________________ the right represented by the
within Warrant to purchase ____________ shares of Common Stock of Medix
Resources, Inc. to which the within Warrant relates and appoints
________________ attorney to transfer said right on the books of Medix
Resources, Inc. with full power of substitution in the premises.
Dated:
---------------, ----------
--------------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant)
--------------------------------------
Address of Transferee
--------------------------------------
--------------------------------------
In the presence of:
--------------------------------------
Exhibit A
1. "Business Day" means any day except Saturday, Sunday and any day which
shall be a federal legal holiday or a day on which banking institutions in
the State of Colorado are authorized or required by law or other
governmental action to close.
2. "Commission" means the Securities and Exchange Commission.
3. "Effective Date" means the date the Underlying Shares Registration
Statement is declared effective by the Commission and notice of such
effectiveness is delivered to Holder.
4. "Per Share Market Value" means on any particular date (a) the aggregate
price of Common Stock sold on such date on the American Stock Exchange or
on such Subsequent Market on which the shares of Common Stock are then
listed or quoted divided by the number of shares of Common Stock so sold,
or if there is no such price on such date, then the closing price on the
American Stock Exchange or on such Subsequent Market on the date nearest
preceding such date, or (b) if the shares of Common Stock are not then
listed or quoted on the American Stock Exchange or a Subsequent Market, the
closing bid price for a share of Common Stock in the over-the-counter
market, as reported by the National Quotation Bureau Incorporated or
similar organization or agency succeeding to its functions of reporting
prices) at the close of business on such date, or (c) if the shares of
Common Stock are not then reported by the National Quotation Bureau
Incorporated (or similar organization or agency succeeding to its functions
of reporting prices), then the average of the "Pink Sheet" quotes for the
relevant conversion period, as determined in good faith by the Holder, or
(d) if the shares of Common Stock are not then publicly traded, the fair
market value of a share of Common Stock as determined by an Appraiser
selected in good faith by the Holder.
5. "Purchase Agreement" means the Securities Purchase Agreement dated as of
December 29, 2000 to which the Company and the Holder hereof are parties.
6. "Trading Day" means (a) a day on which the shares of Common Stock are
traded on the American Stock Exchange or on such Subsequent Market on which
the shares of Common Stock are then listed or quoted, or (b) if the shares
of Common Stock are not listed on the American Stock Exchange or a
Subsequent Market, a day on which the shares of Common Stock are traded in
the over-the-counter market, as reported by the OTC Bulletin Board, or
(c) if the shares of Common Stock are not quoted on the OTC Bulletin Board,
a day on which the shares of Common Stock are quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding its
functions of reporting prices); provided, however, that in the event that
the shares of Common Stock are not listed or quoted as set forth in (a),
(b) and (c) hereof, then Trading Day shall mean a Business Day.
7. "Underlying Shares Registration Statement" shall have the meaning set forth
in the Purchase Agreement.
8. "Warrant Agreement" means the Warrant Agreement dated as of the December
29, 2000 to which the Company and the Holder hereof are parties.
