ADVR\agr\reg.rights.01
EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
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THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of June
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12, 2001, by and among MEDIX RESOURCES INC., a Colorado corporation, with its
principal office located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ 10165(the "Company"), and CORNELL CAPITAL PARTNERS, L.P., a Delaware
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limited partnership and DUTCHESS PRIVATE EQUITIES, FUND, L.P. a Delaware
limited partnership (the "Investors" ).
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WHEREAS:
A. In connection with the Equity Line of Credit Agreement by and
among the parties hereto of even date herewith (the "Equity Line of Credit
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Agreement"), the Company has agreed, upon the terms and subject to the
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conditions of the Equity Line of Credit Agreement, to issue and sell to the
Investors that number of shares of the Company's common stock, par value
$0.001 per share (the "Common Stock"), which can be purchased pursuant to the
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terms of the Equity Line of Credit Agreement for an aggregate purchase price
of up to $10,000,000. Capitalized terms not defined herein shall have the
meaning ascribed to them in the Equity Line of Credit Agreement.
B. To induce the Investors to execute and deliver the Equity Line of
Credit Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations there under, or any similar successor statute (collectively, the
"1933 Act"), and applicable state securities laws.
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NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Investors hereby agree as follows:
1. DEFINITIONS.
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As used in this Agreement, the following terms shall have the
following meanings:
a. "Person" means a corporation, a limited liability company,
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an association, a partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental agency.
b. "Register," "registered," and "registration" refer to a
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registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 under the 1933 Act or any successor rule providing for offering
securities on a continuous or delayed basis ("Rule 415"), and the declaration
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or ordering of effectiveness of such Registration Statement(s) by the United
States Securities and Exchange Commission (the "SEC").
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c. "Registrable Securities" means the shares of Common Stock
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issuable to the Investors pursuant to the Equity Line of Credit Agreement.
d. "Registration Statement" means a registration statement
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under the 1933 Act which covers the Registrable Securities.
2. REGISTRATION.
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a. Mandatory Registration. The Company shall prepare and file
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with the SEC a Registration Statement on Form S-2 covering the resale of all
of the Registrable Securities and up to one hundred thousand (100,000) shares
of the Company's Common Stock to be sold by other selling shareholders. In
the event that Form S-2 is unavailable for such a registration, the Company
shall use such other form as is available for such a registration. The
Company shall cause such Registration Statement to be declared effective by
the SEC prior to the first sale to Investors of the Company's Common Stock
pursuant to the Equity Line of Credit Agreement.
b. Ineligibility for Form S-3. Although Form S-3 is not
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available for the registration of Registrable Securities hereunder, the
Company shall (i) register the sale of the Registrable Securities on another
appropriate form and (ii) undertake to register the Registrable Securities on
Form S-3 as soon as such form is available, provided that the Company shall
maintain the effectiveness of the Registration Statement then in effect until
such time as a Registration Statement on Form S-3 covering the Registrable
Securities has been declared effective by the SEC.
c. Sufficient Number of Shares Registered. In the event the
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number of shares available under a Registration Statement filed pursuant to
Section 2(a) is insufficient to cover all of the Registrable Securities the
Investors has purchased pursuant to the Equity Line of Credit Agreement, the
Company shall amend the Registration Statement, or file a new Registration
Statement (on the short form available therefore, if applicable), or both, so
as to cover all of such Registrable Securities the Investors has purchased
pursuant to the Equity Line of Credit Agreement as soon as practicable, but
in any event not later than fifteen (15) days after the necessity therefore
arises. The Company shall use it best efforts to cause such amendment and/or
new Registration Statement to become effective as soon as practicable
following the filing thereof. For purposes of the foregoing provision, the
number of shares available under a Registration Statement shall be deemed
"insufficient to cover all of the Registrable Securities" if at any time the
number of Registrable Securities issuable on an Advance Notice Date is
greater than the number of shares available for resale under such
Registration Statement.
3. RELATED OBLIGATIONS.
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a. The Company shall keep the Registration Statement effective
pursuant to Rule 415 at all times until the earlier of (i) the date on which
the Investors shall have sold all the Registrable Securities covered by such
Registration Statement or (ii) the date on which the Investors are able to
sell all shares held by them pursuant to Rule 144(k) which in any case will
not occur less than two (2) years from the last Advance (the "Registration
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Period"), which Registration Statement (including any amendments or
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supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein, or necessary to make the statements therein, in light
of the circumstances in which they were made, not misleading.
b. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during
such period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by such
Registration Statement until earlier of (i) the date on which the Investors
shall have sold all the Registrable Securities covered by such Registration
Statement or (ii) the date on which the Investors are able to sell all shares
held by them pursuant to Rule 144(k) which in any case will not occur less
than two (2) years from the last Advance In the case of amendments and
supplements to a Registration Statement which are required to be filed
pursuant to this Agreement (including pursuant to this Section 3(b)) by
reason of the Company's filing a report on Form 10-KSB, Form 10-QSB or Form
8-KSB or any analogous report under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), the Company shall have incorporated such report by
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reference into the Registration Statement, if applicable, or shall file such
amendments or supplements with the SEC on the same day on which the 1934 Act
report is filed which created the requirement for the Company to amend or
supplement the Registration Statement.
c. The Company shall furnish the Investors without charge,
(i) at least one copy of such Registration Statement as declared effective by
the SEC and any amendment(s) thereto, including financial statements and
schedules, all documents incorporated therein by reference, all exhibits and
each preliminary prospectus, (ii) ten (10) copies of the final prospectus
included in such Registration Statement and all amendments and supplements
thereto (or such other number of copies as such Investors may reasonably
request) and (iii) such other documents as such Investors may reasonably
request from time to time in order to facilitate the disposition of the
Registrable Securities owned by such Investors.
d. The Company shall use its best efforts to (i) register and
qualify the Registrable Securities covered by a Registration Statement under
such other securities or "blue sky" laws of such jurisdictions in the United
States as any Investors reasonably requests, including but not limited to the
laws of the State of Delaware, New York, and Connecticut, (ii) prepare and
file in those jurisdictions, such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may
be necessary to maintain the effectiveness thereof during the Registration
Period, (iii) take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to (w) make any change to its
certificate of incorporation or by-laws, (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d), (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of process in any such
jurisdiction. The Company shall promptly notify the Investors of the receipt
by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the United
States or its receipt of actual notice of the initiation or threat of any
proceeding for such purpose.
e. As promptly as practicable after becoming aware of such
event or development, the Company shall notify the Investors in writing of
the happening of any event as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (provided that in no
event shall such notice contain any material, nonpublic information), and
promptly prepare a supplement or amendment to such Registration Statement to
correct such untrue statement or omission, and deliver ten (10) copies of
such supplement or amendment to each Investors. The Company shall also
promptly notify the Investors in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to the Investors by
facsimile on the same day of such effectiveness), (ii) of any request by the
SEC for amendments or supplements to a Registration Statement or related
prospectus or related information, and (iii) of the Company's reasonable
determination that a post-effective amendment to a Registration Statement
would be appropriate.
f. The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction within the United States
of America and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible moment and to
notify the Investors of the issuance of such order and the resolution thereof
or its receipt of actual notice of the initiation or threat of any proceeding
for such purpose.
g. At the reasonable request of any Investors, the Company
shall furnish to such Investors, on the date of the effectiveness of the
Registration Statement and thereafter from time to time on such dates as an
Investors may reasonably request (i) a letter, dated such date, from the
Company's independent certified public accountants in form and substance as
is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, and (ii) an opinion, dated
as of such date, of counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given
in an underwritten public offering, addressed to the Investors.
h. At the reasonable request of the Investors, the Company
shall make available for inspection by (i) any Investors and (ii) one firm of
accountants or other agents retained by the Investors (collectively, the
"Inspectors") all pertinent financial and other records, and pertinent
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corporate documents and properties of the Company (collectively, the
"Records"), as shall be reasonably deemed necessary by each Inspector, and
cause the Company's officers, directors and employees to supply all
information which any Inspector may reasonably request; provided, however,
that each Inspector shall agree, and the Investors hereby agrees, to hold in
strict confidence and shall not make any disclosure (except to an Investors)
or use of any Record or other information which the Company determines in
good faith to be confidential, and of which determination the Inspectors are
so notified, unless (a) the disclosure of such Records is necessary to avoid
or correct a misstatement or omission in any Registration Statement or is
otherwise required under the 1933 Act, (b) the release of such Records is
ordered pursuant to a final, non-appealable subpoena or order from a court or
government body of competent jurisdiction, or (c) the information in such
Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement of which the Inspector
and the Investors has knowledge. The Investors agrees that it shall, upon
learning that disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential.
i. The Company shall hold in confidence and not make any
disclosure of information concerning an Investors provided to the Company
unless (i) disclosure of such information is necessary to comply with federal
or state securities laws, (ii) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in any Registration
Statement, (iii) the release of such information is ordered pursuant to a
subpoena or other final, non-appealable order from a court or governmental
body of competent jurisdiction, or (iv) such information has been made
generally available to the public other than by disclosure in violation of
this Agreement or any other agreement. The Company agrees that it shall,
upon learning that disclosure of such information concerning an Investors is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt written notice to such Investors and allow
such Investors, at the Investor's expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, such information.
j. The Company shall use its best efforts either to cause all
the Registrable Securities covered by a Registration Statement (i) to be
listed on each securities exchange on which securities of the same class or
series issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange or
(ii) if the Company satisfies the applicable listing requirements, secure
designation and quotation of all the Registrable Securities covered by the
Registration Statement on the Nasdaq National Market or The Nasdaq SmallCap
Market or, if, despite the Company's best efforts to satisfy the preceding
clause (i) or (ii), the Company is unsuccessful in satisfying the preceding
clause (i) or (ii), to secure the inclusion for quotation on the National
Association of Securities Dealers, Inc. OTC Bulletin Board for such
Registrable Securities. The Company shall pay all fees and expenses in
connection with satisfying its obligation under this Section 3(j).
k. The Company shall cooperate with the Investors and, to the
extent applicable, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legend) representing the
Registrable Securities to be offered pursuant to a Registration Statement and
enable such certificates to be in such denominations or amounts, as the case
may be, as the Investors may reasonably request and registered in such names
as the Investors may request, subject to Section 3.12 of the Equity Line of
Credit Agreement.
l. The Company shall use its best efforts to cause the
Registrable Securities covered by the applicable Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to consummate the disposition of such
Registrable Securities.
m. The Company shall make generally available to its security
holders as soon as practical, but not later than 90 days after the close of
the period covered thereby, an earnings statement (in form complying with the
provisions of Rule 158 under the ▇▇▇▇ ▇▇▇) covering a twelve-month period
beginning not later than the first day of the Company's fiscal quarter next
following the effective date of the Registration Statement.
n. The Company shall otherwise use its best efforts to comply
with all applicable rules and regulations of the SEC in connection with any
registration hereunder.
o. Within two (2) business days after a Registration Statement
which covers Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to
deliver, to the transfer agent for such Registrable Securities (with copies
to the Investors whose Registrable Securities are included in such
Registration Statement) confirmation that such Registration Statement has
been declared effective by the SEC in the form attached hereto as Exhibit A.
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p. The Company shall take all other reasonable actions
necessary to expedite and facilitate disposition by the Investors of
Registrable Securities pursuant to a Registration Statement.
4. OBLIGATIONS OF THE INVESTORS.
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The Investors agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(f)
or the first sentence of 3(e), the Investors will immediately discontinue
disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such Investors'
receipt of the copies of the supplemented or amended prospectus contemplated
by Section 3(e) or receipt of notice that no supplement or amendment is
required. Notwithstanding anything to the contrary, the Company shall cause
its transfer agent to deliver unlegended certificates for shares of Common
Stock to a transferee of an Investors in accordance with the terms of the
Equity Line of Credit Agreement in connection with any sale of Registrable
Securities with respect to which an Investors has entered into a contract for
sale prior to the Investors' receipt of a notice from the Company of the
happening of any event of the kind described in Section 3(f) or the first
sentence of 3(e) and for which the Investors has not yet settled.
5. EXPENSES OF REGISTRATION.
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All expenses (except commissions) incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 and 3,
including, without limitation, all registration, listing and qualifications
fees, printers, legal and accounting fees shall be paid by the Company,
subject to the agreements set forth in Section 12.4 of the Equity Line of
Credit Agreement.
6. INDEMNIFICATION.
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With respect to Registrable Securities which are included in a
Registration Statement under this Agreement:
a. To the fullest extent permitted by law, the Company will,
and hereby does, indemnify, hold harmless and defend each Investors, the
directors, officers, partners, employees, agents, representatives of, and
each Person, if any, who controls any Investors within the meaning of the
1933 Act or the 1934 Act (each, an "Indemnified Person"), against any losses,
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claims, damages, liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys' fees, amounts paid in settlement or expenses, joint or
several (collectively, "Claims") incurred in investigating, preparing or
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defending any action, claim, suit, inquiry, proceeding, investigation or
appeal taken from the foregoing by or before any court or governmental,
administrative or other regulatory agency, body or the SEC, whether pending
or threatened, whether or not an indemnified party is or may be a party
thereto ("Indemnified Damages"), to which any of them may become subject
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insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon: (i) any
untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any
filing made in connection with the qualification of the offering under the
securities or other "blue sky" laws of any jurisdiction in which Registrable
Securities are offered ("Blue Sky Filing"), or the omission or alleged
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omission to state a material fact required to be stated therein or necessary
to make the statements therein not misleading; (ii) any untrue statement or
alleged untrue statement of a material fact contained in any final prospectus
(as amended or supplemented, if the Company files any amendment thereof or
supplement thereto with the SEC) or the omission or alleged omission to state
therein any material fact necessary to make the statements made therein, in
light of the circumstances under which the statements therein were made, not
misleading; or (iii) any violation or alleged violation by the Company of the
1933 Act, the 1934 Act, any other law, including, without limitation, any
state securities law, or any rule or regulation there under relating to the
offer or sale of the Registrable Securities pursuant to a Registration
Statement (the matters in the foregoing clauses (i) through (iii) being,
collectively, "Violations"). The Company shall reimburse the Investors and
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any controlling person promptly as such expenses are incurred and are due
and payable, for any legal fees or disbursements or other reasonable expenses
incurred by them in connection with investigating or defending any such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (x) shall not apply
to a Claim by an Indemnified Person arising out of or based upon a Violation
which occurs in reliance upon and in conformity with information furnished in
writing to the Company by such Indemnified Person expressly for use in
connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto; (y) shall not be available to the
extent such Claim is based on a failure of the Investors to deliver or to
cause to be delivered the prospectus made available by the Company, if such
prospectus was timely made available by the Company pursuant to Section 3(d);
and (z) shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the prior written consent of the Company,
which consent shall not be unreasonably withheld. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by the Investors pursuant to Section 9.
b. In connection with a Registration Statement, the Investors
agree to severally and not jointly indemnify, hold harmless and defend, to
the same extent and in the same manner as is set forth in Section 6(a), the
Company, each of its directors, each of its officers who signs the
Registration Statement and each Person, if any, who controls the Company
within the meaning of the 1933 Act or the 1934 Act (each an "Indemnified
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Party"), against any Claim or Indemnified Damages to which any of them may
become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as
such Claim or Indemnified Damages arise out of or is based upon any
Violation, in each case to the extent, and only to the extent, that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by the Investors expressly for use in connection
with such Registration Statement; and, subject to Section 6(d), the
Investors will reimburse any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall not apply
to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Investors, which consent shall not
be unreasonably withheld; provided, further, however, that the Investors
shall be liable under this Section 6(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the net proceeds to the Investors as
a result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Investors pursuant
to Section 9. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with respect to any
prospectus shall not inure to the benefit of any Indemnified Party if the
untrue statement or omission of material fact contained in the prospectus was
corrected and such new prospectus was delivered to the Investors prior to
such Investors' use of the prospectus to which the Claim relates.
c. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding)
involving a Claim, such Indemnified Person or Indemnified Party shall, if a
Claim in respect thereof is to be made against any indemnifying party under
this Section 6, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel reasonably satisfactory to the Indemnified
Person or the Indemnified Party, as the case may be; provided, however, that
an Indemnified Person or Indemnified Party shall have the right to retain its
own counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party,
the representation by such counsel of the Indemnified Person or Indemnified
Party and the indemnifying party would be inappropriate due to actual or
potential differing interests between such Indemnified Person or Indemnified
Party andand the indemnifying party. The Indemnified Party or Indemnified
Person shall cooperate fully with the indemnifying party in connection with
any negotiation or defense of any such action or claim by the indemnifying
party and shall furnish to the indemnifying party all information reasonably
available to the Indemnified Party or Indemnified Person which relates to
such action or claim. The indemnifying party shall keep the Indemnified
Party or Indemnified Person fully apprised at all times as to the status of
the defense or any settlement negotiations with respect thereto. No
indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent, provided, however,
that the indemnifying party shall not unreasonably withhold, delay or
condition its consent. No indemnifying party shall, without the prior
written consent of the Indemnified Party or Indemnified Person, consent to
entry of any judgment or enter into any settlement or other compromise which
does not include as an unconditional term thereof the giving by the claimant
or plaintiff to such Indemnified Party or Indemnified Person of a release
from all liability in respect to such claim or litigation. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter
for which indemnification has been made. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement
of any such action shall not relieve such indemnifying party of any liability
to the Indemnified Person or Indemnified Party under this Section 6, except
to the extent that the indemnifying party is prejudiced in its ability to
defend such action.
d. The indemnification required by this Section 6 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified
Damages are incurred.
e. The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified Party
or Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.
7. CONTRIBUTION.
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To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise
be liable under Section 6 to the fullest extent permitted by law; provided,
however, that: (i) no seller of Registrable Securities guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇ ▇▇▇) shall
be entitled to contribution from any seller of Registrable Securities who was
not guilty of fraudulent misrepresentation; and (ii) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount
of proceeds received by such seller from the sale of such Registrable
Securities.
8. REPORTS UNDER THE 1934 ACT.
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With a view to making available to the Investors the benefits of
Rule 144 promulgated under the 1933 Act or any similar rule or regulation of
the SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration ("Rule 144") the Company agrees to:
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a. make and keep public information available, as those terms
are understood and defined in Rule 144;
b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long
as the Company remains subject to such requirements (it being understood that
nothing herein shall limit the Company's obligations under Section 6.3) of
the Equity Line of Credit Agreement) and the filing of such reports and other
documents as is deemed by the Company to be required for the applicable
provisions of Rule 144; and
c. furnish to the Investors so long as such Investors owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144, the
1933 Act and the 1934 Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without
registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
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Neither this Agreement nor any rights of the Investors hereunder may
be assigned to any other Person.
10. AMENDMENT OF REGISTRATION RIGHTS.
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Provisions of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and
either retroactively or prospectively), only with the written consent of the
Company and Investors. Any amendment or waiver effected in accordance with
this Section 10 shall be binding upon the Investors and the Company. No such
amendment shall be effective to the extent that it applies to fewer than all
of the holders of the Registrable Securities. No consideration shall be
offered or paid to any Person to amend or consent to a waiver or modification
of any provision of any of this Agreement unless the same consideration also
is offered to all of the parties to this Agreement.
11. MISCELLANEOUS.
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a. A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from the registered owner of such Registrable Securities.
b. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one business day after deposit
with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:
If to Investors, to: Cornell Capital Partners, L.P.
c/o Yorkville Advisors, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
With copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Dutchess Private Equities Fund, L.P.
c/o Dutchess Capital Management, LLC
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
With Copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Company, to: Medix Resources Inc.
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▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, Executive Vice
President Chief
Financial Officer
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to an Investors, to its address and facsimile number referenced herein ,
with copies to such Investors' representatives as set forth herein or to
such other address and/or facsimile number and/or to the attention of such
other person as the recipient party has specified by written notice given to
each other party five days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date,
recipient facsimile number and an image of the first page of such
transmission or (C) provided by a courier or overnight courier service shall
be rebuttable evidence of personal service, receipt by facsimile or receipt
from a nationally recognized overnight delivery service in accordance with
clause (i), (ii) or (iii) above, respectively.
c. Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.
d. The corporate laws of the State of Colorado shall govern
all issues concerning the relative rights of the Company and the Investors as
its stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of New York
or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York. Each party hereby
irrevocably submits to the non-exclusive jurisdiction of the state and
federal courts sitting in the City of New York, Borough of Manhattan, 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, that
such suit, action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to
such party at the address for such notices to it under this Agreement 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.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING
OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
e. This Agreement, the Equity Line of Credit Agreement and the
Escrow Agreement constitute the entire agreement among the parties hereto
with respect to the subject matter hereof and thereof. There are no
restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement, the Equity Line of
Credit Agreement and the Escrow Agreement supersede all prior agreements and
understandings among the parties hereto with respect to the subject matter
hereof and thereof.
f. Subject to the requirements of Section 9, this Agreement
shall inure to the benefit of and be binding upon the permitted successors
and assigns of each of the parties hereto.
g. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
h. This Agreement may be executed in identical counterparts,
each of which shall be deemed an original but all of which shall constitute
one and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this
Agreement.
i. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the
other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
j. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent and no
rules of strict construction will be applied against any party.
k. This Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for
the benefit of, nor may any provision hereof be enforced by, any other Person.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
MEDIX RESOURCES INC.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇
----------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
and Chief Financial
Officer
CORNELL CAPITAL PARTNERS, L.P.
By: Yorkville Advisors, LLC
Its: General Partner
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Fund Manager
DUTCHESS PRIVATE EQUITIES, FUND L.P.
By: Dutchess Captial Management, LLC
Its: General Partner
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Fund Manager
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
Attn:
-------------------
Re: MEDIX RESOURCES INC.
------------------- -
Ladies and Gentlemen:
We are counsel to MEDIX RESOURCES INC., a Colorado corporation (the
"Company"), and have represented the Company in connection with that certain
--------
Equity Line of Credit Agreement (the "Equity Line of Credit Agreement")
----------------------------------
entered into by and among the Company and the Investors named therein
(collectively, the "Investors") pursuant to which the Company issued to the
---------
Investors shares of its Common Stock, par value $0.001 per share (the
"Common Stock"). Pursuant to the Equity Line of Credit Agreement, the Company
-------------
also has entered into a Registration Rights Agreement with the Investors (the
"Registration Rights Agreement") pursuant to which the Company agreed, among
------------------------------
other things, to register the Registrable Securities (as defined in the
Registration Rights Agreement) under the Securities Act of 1933, as amended
(the "1933 Act"). In connection with the Company's obligations under the
--------
Registration Rights Agreement, on ____________ ____, the Company filed a
Registration Statement on Form ________ (File No. 333-_____________) (the
"Registration Statement") with the Securities and Exchange Commission (the
------------------------
"SEC") relating to the Registrable Securities which names each of the
----
Investors as a selling stockholder there under.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER
TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no
knowledge that any stop order suspending its effectiveness has been issued or
that any proceedings for that purpose are pending before, or threatened by,
the SEC and the Registrable Securities are available for resale under the
1933 Act pursuant to the Registration Statement.
Very truly yours,
[ISSUER'S COUNSEL]
By:
---------------------------------
cc: [LIST NAMES OF Investors]
