Registration Rights Agreement - T3 Group LLC and Medix Resources Inc.
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of March 4,
2003, by and between T3 Group, LLC, a Delaware limited liability company, ("T3
Group") and Medix Resources, Inc., a Colorado corporation (the "Company").
WHEREAS, the Company, T3 Group and Comdisco Ventures, Inc. ("Comdisco")
have entered into that certain Asset Purchase Agreement dated as of even date
hereof (the "Purchase Agreement") pursuant to which Comdisco sold, transferred
and conveyed to Buyer, and Buyer purchased, on the terms and conditions set
forth therein, certain rights, property and assets owned by Comdisco that were
formerly owned by ePhysician, Inc. ("ePhysician") and used by ePhysician prior
to ePhysician's cessation of operations in its web-enabled computing products
and communications services business as then conducted; and
WHEREAS, the Company agreed to issue to T3 Group, for the benefit and in
lieu of, and at the request and pursuant to the authorization of, Comdisco as
payment for certain obligations of Comdisco to T3 Group, One Hundred Thousand
(100,000) shares of the Company's common stock as part of the purchase price for
the assets purchased pursuant to the terms and conditions of the Purchase
Agreement and the Company has agreed to grant registration rights to T3 Group
with respect to such shares, all for the benefit of and in lieu of, and at the
request of and pursuant to the authorization of, Comdisco; and
WHEREAS, this Agreement is made as a condition of the consummation of the
transactions contemplated by the Purchase Agreement.
The parties hereby agree as follows:
1. Certain Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
"Affiliate" means, with respect to any person, any other person which
directly or indirectly controls, is controlled by, or is under common control
with, such person. "Control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting securities, by contract or
otherwise.
"Business Day" means a day, other than a Saturday or Sunday, on which banks
in New York City are open for the general transaction of business.
"Common Stock" shall mean the Company's common stock, par value $.001 per
share.
"Investor" shall mean T3 Group and any Affiliate or permitted transferee of
T3 Group who is a subsequent holder of the Registrable Securities.
"Prospectus" shall mean the prospectus included in any Registration
Statement, as amended or supplemented by any prospectus supplement, with respect
to the terms of the offering of any portion of the Registrable Securities
covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus.
"Register," "registered" and "registration" refer to a registration made by
preparing and filing a Registration Statement or similar document in compliance
with the Act (as defined below), and the declaration or ordering of
effectiveness of such Registration Statement or document.
"Registrable Securities" shall mean the shares of Common Stock issuable to
T3 Group upon the consummation of the transactions contemplated by the Purchase
Agreement as part of the Purchase Price described in Section 5 of the Purchase
Agreement, and any other securities issued or issuable with respect to or in
exchange for the Registrable Securities. Notwithstanding the foregoing, the term
Registrable Securities shall not include (a) any such shares which have been
registered under the Act pursuant to an effective Registration Statement filed
thereunder and disposed of in accordance with such Registration Statement, and
(b) any such shares which can be publicly sold pursuant to Rule 144 under the
Act.
"Registration Statement" shall mean any registration statement of the
Company filed on Form S-3 (or any successor form thereto) under the Act that
covers the sale of any of the Registrable Securities pursuant to the provisions
of this Agreement, amendments and supplements to such Registration Statement,
including post-effective amendments, all exhibits and all material incorporated
by reference in such Registration Statement.
"SEC" means the U.S. Securities and Exchange Commission.
"Act" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
"1934 Act" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
2. Registration.
(a) Registration Statements. The Company agrees that it shall include
the Registrable Securities on the next Registration Statement
filed by the Company pursuant to the Act with the SEC following
the consummation of the transactions contemplated by the Purchase
Agreement (the "Closing"). The Company reserves the right to
include any securities for its own account or for the account of
any third party in such Registration Statement without the
consent of the Investor or notice to the Investor. The Investor
acknowledges that the Company currently does not anticipate
filing another Registration Statement on Form S-3 prior to June
1, 2003.
(b) Expenses. The Company will pay all expenses associated with the
registration of the Registrable Securities, including filing and
printing fees, counsel and accounting fees of the Company, costs
associated with clearing the Registrable Securities for sale
under applicable state securities laws subject to the provisions
hereof, and listing fees, but excluding discounts, commissions,
fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals with respect to the Registrable
Securities being sold.
(c) Effectiveness.
(i) The Company shall use its commercially reasonable efforts to
have the Registration Statement declared effective as soon
as reasonably practicable following its filing with the SEC.
(ii) For not more than sixty (60) consecutive trading days in any
six (6) month period or for a total of not more than one
hundred thirty five (135) trading days in any twelve (12)
month period, the Company may delay the disclosure of
material non-public information concerning the Company, by
terminating or suspending effectiveness of any registration
contemplated by this Section 2, the disclosure of which at
the time is not, in the good faith opinion of the Company,
in the best interests of the Company (an "Allowed Delay");
provided that the Company shall promptly (a) notify the
Investor in writing of the existence of (but in no event,
without the prior written consent of the Investor, shall the
Company disclose to the Investor any of the facts or
circumstances regarding) material non-public information
giving rise to an Allowed Delay, and (b) advise the Investor
in writing to cease all sales under the Registration
Statement until the end of the Allowed Delay.
(d) Underwritten Offering. If any offering pursuant to a
Registration Statement pursuant to Section 2(a) hereof involves
an underwritten offering, the Company shall have the right to
select an investment banker and manager to administer the
offering.
3. Company Obligations. The Company will use its commercially
reasonable efforts to effect the registration of the Registrable
Securities in accordance with the terms of this Section 3, and
pursuant thereto the Company will:
(a) subject to the provisions hereof, cause such Registration
Statement to become effective and to remain continuously
effective for a period that will terminate upon the earlier of
(i) the date on which all Registrable Securities, covered by such
Registration Statement, as amended from time to time, have been
sold, and (ii) the date on which all Registrable Securities may
be sold pursuant to Rule 144;
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement and the Prospectus as
may be necessary to keep the Registration Statement effective for
the period specified in Section 3(a) and to comply with the
provisions of the Act and the 1934 Act with respect to the
distribution of all Registrable Securities;
(c) furnish to the Investor and its legal counsel (i) promptly after
the same is prepared and publicly distributed, or filed with the
SEC, at least one (1) copy of any Registration Statement and any
amendment thereto, each preliminary prospectus and Prospectus and
each amendment or supplement thereto (other than any portion of
any thereof which contains information for which the Company has
sought confidential treatment), and (ii) such number of copies of
a Prospectus, including a preliminary prospectus, and all
amendments and supplements thereto and such other documents as
the Investor may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by the Investor;
(d) in the event the Company selects an underwriter for the offering,
the Company shall enter into and perform its reasonable
obligations under an underwriting agreement, in usual and
customary form, including, without limitation, customary
indemnification and contribution obligations, with the
underwriter of such offering;
(e) subject to the provisions hereof, prevent the issuance of any
stop order or other suspension of effectiveness and, if such
order is issued, obtain the withdrawal of any such order at the
earliest possible moment;
(f) prior to any public offering of Registrable Securities, register
or qualify or cooperate with the Investor and its counsel in
connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or
blue sky laws of such jurisdictions requested by the Investor and
do any and all other reasonable acts or things necessary or
advisable to enable the distribution in such jurisdictions of the
Registrable Securities covered by the Registration Statement
provided, however, that the Company shall not be
required to (i) qualify to transact business as a foreign
corporation in any jurisdiction where it is not so qualified,
(ii) consent to general service of process or (iii) submit to
taxation in any such jurisdiction, unless the Company is already
subject to service or subject to taxation in such jurisdiction;
(g) cause all Registrable Securities covered by a Registration
Statement to be listed on each securities exchange, interdealer
quotation system or other market on which similar securities
issued by the Company are then listed;
(h) promptly notify the Investor, at any time when a Prospectus
relating to the Registrable Securities is required to be
delivered under the Act, upon discovery that, or upon the
happening of any event as a result of which, the Prospectus
included in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the
circumstances then existing, and at the request of any such
holder, promptly prepare and furnish to such holder a reasonable
number of copies of a supplement to or an amendment of such
Prospectus as may be necessary so that, as thereafter delivered
to the purchasers of such Registrable Securities, such Prospectus
shall not include an 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 not misleading in light
of the circumstances then existing; and
(i) comply with all applicable rules and regulations of the SEC under
the Act and the 1934 Act, take such other actions as may be
reasonably necessary to facilitate the registration of the
Registrable Securities hereunder.
4. Obligations of the Investor.
(a) The Investor shall furnish in writing to the Company such
information regarding itself, the Registrable Securities held by
it and the intended method of disposition of the Registrable
Securities held by it, as shall be reasonably required to effect
the registration of such Registrable Securities and shall execute
such documents in connection with such registration as the
Company may reasonably request. At least fifteen (15) Business
Days prior to the first anticipated filing date of any
Registration Statement, the Company shall notify the Investor of
the information the Company requires from the Investor with
respect thereto. The Investor shall provide such information to
the Company at least five (5) Business Days prior to the first
anticipated filing date of such Registration Statement.
(b) The Investor, by its acceptance of the Registrable Securities,
agrees to cooperate with the Company as reasonably requested by
the Company in connection with the preparation and filing of a
Registration Statement hereunder.
(c) In the event the Company determines to engage the services of an
underwriter, the Investor agrees to enter into and perform its
obligations under an underwriting agreement, in usual and
customary form, including, without limitation, customary
indemnification and contribution obligations, with the managing
underwriter of such offering and take such other actions as are
reasonably required in order to expedite or facilitate the
dispositions of the Registrable Securities.
(d) The Investor agrees that, upon receipt of any notice from the
Company of the happening of any event rendering a Registration
Statement no longer effective, the Investor will immediately
discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities,
until the Investor's receipt of the copies of the supplemented or
amended prospectus filed with the SEC and declared effective and,
if so directed by the Company, the Investor shall deliver to the
Company (at the expense of the Company) or destroy (and deliver
to the Company a certificate of destruction) all copies in the
Investor's possession of the Prospectus covering the Registrable
Securities current at the time of receipt of such notice.
(e) The Investor may not participate in any third party underwritten
registration hereunder unless it (i) agrees to sell the
Registrable Securities on the basis provided in any underwriting
arrangements in usual and customary form entered into by the
Company, (ii) completes and executes all questionnaires, powers
of attorney, indemnities, underwriting agreements and other
documents reasonably required under the terms of such
underwriting arrangements, and (iii) agrees to pay its pro rata
share of all underwriting discounts and commissions.
Notwithstanding the foregoing, the Investor shall not be required
to make any representations to such underwriter, other than those
with respect to itself and the Registrable Securities owned by
it, including its right to sell the Registrable Securities, and
any indemnification in favor of the underwriter by the Investor
shall be several and not joint and limited in the case of the
Investor, to the proceeds received by the Investor from the sale
of its Registrable Securities. The scope of any such
indemnification in favor of an underwriter shall be limited to
the same extent as the indemnity provided in Section 5(b) hereof.
5. Indemnification.
(a) Indemnification by the Company. The Company will indemnify and
hold harmless the Investor and its respective officers,
directors, members, employees and agents, successors and assigns,
and each other person, if any, who controls the Investor within
the meaning of the Act, against any losses, claims, damages or
liabilities, joint or several, to which such seller, officer,
director, member, or controlling person may become subject under
the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon: (i) any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement, any
preliminary prospectus or final prospectus contained therein, or
any amendment or supplement thereof; (ii) any blue sky
application or other document executed by the Company
specifically for that purpose or based upon written information
furnished by the Company filed in any state or other jurisdiction
in order to qualify any or all of the Registrable Securities
under the securities laws thereof (any such application, document
or information herein called a "Blue Sky Application"); (iii) the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; (iv) any violation by the Company or its
agents of any rule or regulation promulgated under the Act
applicable to the Company or its agents and relating to action or
inaction required of the Company in connection with such
registration; or (v) any failure to register or qualify the
Registrable Securities included in any such Registration in any
state where the Company or its agents has affirmatively
undertaken or agreed in writing that the Company will undertake
such registration or qualification on the Investor's behalf (the
undertaking of any underwriter chosen by the Company being
attributed to the Company) and will reimburse the Investor, and
each such officer, director or member and each such controlling
person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case if and to the extent
that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with
information furnished by the Investor or any such controlling
person in writing specifically for use in such Registration
Statement or Prospectus.
(b) Indemnification by the Investor. In connection with any
registration pursuant to the terms of this Agreement, the
Investor will furnish to the Company in writing such information
as the Company reasonably requests concerning the holders of
Registrable Securities or the proposed manner of distribution for
use in connection with any Registration Statement or Prospectus
and agrees to indemnify and hold harmless, to the fullest extent
permitted by law, the Company, its directors, officers,
employees, stockholders and each person who controls the Company
(within the meaning of the Act) against any losses, claims,
damages, liabilities and expenses (including reasonable attorney
fees) resulting from any untrue statement of a material fact or
any omission of a material fact required to be stated in the
Registration Statement or Prospectus or preliminary prospectus or
amendment or supplement thereto or necessary to make the
statements therein not misleading, to the extent, but only to the
extent that such untrue statement or omission is contained in any
information furnished in writing by the Investor to the Company
specifically for inclusion in such Registration Statement or
Prospectus or amendment or supplement thereto and that such
information was substantially relied upon by the Company in
preparation of the Registration Statement or Prospectus or any
amendment or supplement thereto. In no event shall the liability
of the Investor be greater in amount than the dollar amount of
the proceeds (net of all expenses paid by the Investor and the
amount of any damages such holder has otherwise been required to
pay by reason of such untrue statement or omission) received by
the Investor upon the sale of the Registrable Securities included
in the Registration Statement giving rise to such indemnification
obligation.
(c) Conduct of Indemnification Proceedings. Any person entitled to
indemnification hereunder shall (i) give prompt notice to the
indemnifying party of any claim with respect to which it seeks
indemnification and (ii) permit such indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to
the indemnified party; provided that any person entitled to
indemnification hereunder shall have the right to employ separate
counsel and to participate in the defense of such claim, but the
fees and expenses of such counsel shall be at the expense of such
person unless (a) the indemnifying party has agreed to pay such
fees or expenses, or (b) the indemnifying party shall have failed
to assume the defense of such claim and employ counsel reasonably
satisfactory to such person or (c) in the reasonable judgment of
any such person, based upon written advice of its counsel, a
conflict of interest exists between such person and the
indemnifying party with respect to such claims (in which case, if
the person notifies the indemnifying party in writing that such
person elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the
right to assume the defense of such claim on behalf of such
person); and provided, further, that the failure of any
indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations hereunder,
except to the extent that such failure to give notice shall
materially adversely affect the indemnifying party in the defense
of any such claim or litigation. It is understood that the
indemnifying party shall not, in connection with any proceeding
in the same jurisdiction, be liable for fees or expenses of more
than one separate firm of attorneys at any time for all such
indemnified parties. No indemnifying party will, except with the
consent of the indemnified party, consent to entry of any
judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation.
(d) Contribution. If for any reason the indemnification provided for
in the preceding paragraphs (a) and (b) is unavailable to an
indemnified party or insufficient to hold it harmless, other than
as expressly specified therein, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party
as a result of such loss, claim, damage or liability in such
proportion as is appropriate to reflect the relative fault of the
indemnified party and the indemnifying party, as well as any
other relevant equitable considerations. No person guilty of
fraudulent misrepresentation within the meaning of Section 11(f)
of the Act shall be entitled to contribution from any person not
guilty of such fraudulent misrepresentation. In no event shall
the contribution obligation of a holder of Registrable Securities
be greater in amount than the dollar amount of the proceeds (net
of all expenses paid by such holder and the amount of any damages
such holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged
omission) received by it upon the sale of the Registrable
Securities giving rise to such contribution obligation.
6. Miscellaneous.
(a) Amendments and Waivers. This Agreement may not be modified,
amended, supplemented, canceled or discharged, except by written
instrument executed by all parties. No failure to exercise, and
no delay in exercising, any right, power or privilege under this
Agreement shall operate as a waiver, nor shall any single or
partial exercise of any right, power or privilege hereunder
preclude the exercise of any other right, power or privilege. No
waiver of any breach of any provision shall be deemed to be a
waiver of any preceding or succeeding breach of the same or any
other provision, nor shall any waiver be implied from any course
of dealing between the parties. No extension of time for
performance of any obligations or other acts hereunder or under
any other agreement shall be deemed to be an extension of the
time for performance of any other obligations or any other acts.
The rights and remedies of the parties under this Agreement are
in addition to all other rights and remedies, at law or equity,
that they may have against each other.
(b) Notices. Any notice or other communication required by or
permitted to be given in connection with this Agreement shall be
in writing, except as expressly otherwise permitted herein, and
shall be delivered in person (including via overnight courier
service) or sent by telecopy or certified or registered mail,
return receipt requested, postage prepaid, to the respective
parties at the addresses referenced below. Each of the parties
may change the address to which it desires notices to be sent if
it notifies the other party of such change in accordance with the
provisions of this Section 6(b). Any such notice will be deemed
to be given when received, if personally delivered or sent by
telecopy and, if mailed, three (3) business days after deposit in
the United States mail, properly addressed, with proper postage
affixed.
The Investor: T3 Group, LLC
-----------------------
Attention: Shant Sood
Facsimile:
The Company: Medix Resources, Inc.
420 Lexington Avenue
New York, New York 10170
Attention: Darryl R. Cohen
Facsimile: (212) 681-9817
With a copy to: Lowenstein Sandler PC
65 Livingston Avenue
Roseland, New Jersey 07068
Facsimile: (973) 597-2400
Attention.: Peter H. Ehrenberg, Esq.
(c) Assignments and Transfers by the Investor. The provisions of this
Agreement shall be binding upon and inure to the benefit of the
Investor and its respective successors and assigns. The Investor
may transfer or assign, in whole or from time to time in part, to
one or more persons it rights hereunder in connection with the
transfer of Registrable Securities by the Investor to such
person, provided that the Investor complies with all applicable
laws thereto and provides written notice of assignment to the
Company promptly after such assignment is effected.
(d) Assignments and Transfers by the Company. This Agreement may not
be assigned by the Company without the prior written consent of
the Investor, except that without the prior written consent of
the Investor, but after notice duly given, the Company shall
assign its rights and delegate its duties hereunder to any
successor-in-interest corporation, and such successor-in-interest
shall assume such rights and duties, in the event of a merger or
consolidation of the Company with or into another corporation or
the sale of all or substantially all of the Company's assets.
(e) Benefits of the Agreement. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the
respective permitted successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
(f) Counterparts; Faxes. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of
which together shall constitute one and the same instrument. A
telecopy signature of any party shall be considered to have the
same binding legal effect as an original signature.
(g) Titles and Subtitles. Titles and subtitles are not to be
considered part of this Agreement, are included solely for
convenience, and are not intended to be full or accurate
descriptions of the contents hereof.
(h) Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof but shall be interpreted as if it were written so as to be
enforceable to the maximum extent permitted by applicable law,
and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in
any other jurisdiction. To the extent permitted by applicable
law, the parties hereby waive any provision of law which renders
any provisions hereof prohibited or unenforceable in any respect.
(i) Further Assurances. The parties shall execute and deliver all
such further instruments and documents and take all such other
actions as may reasonably be required to carry out the
transactions contemplated hereby and to evidence the fulfillment
of the agreements herein contained.
(j) Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto pertaining to the subject matter hereof
and, supersedes all prior and contemporaneous agreements,
understandings, negotiations, and discussions, whether oral or
written, of the parties. No supplement, modification, amendment,
or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any of the
provisions of this Agreement shall be deemed to or shall
constitute a waiver of any other provisions hereof (whether or
not similar), nor shall such waiver constitute a continuing
waiver unless otherwise expressly provided.
(k) Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of
New York, without reference to the choice of law principles
thereof. Each of the parties hereto irrevocably submits to the
co-exclusive jurisdiction of the courts of the State of New York
and the United States District Courts for the Southern District
of New York for the purpose of any suit, action, proceeding or
judgment relating to or arising out of this Agreement and the
transactions contemplated hereby. Each of the parties hereto
irrevocably consents to the jurisdiction of any such court in any
such suit, action or proceeding and to the laying of venue in
such court. Each party hereto irrevocably waives any objection to
the laying of venue of any such suit, action or proceeding
brought in such courts and irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum. In the event that
litigation pursuant to this Agreement is commenced or in the
event that any other dispute resolution method is commenced, the
prevailing party's legal fees and court costs shall be paid by
the unsuccessful party.
(l) Expenses. Except as otherwise provided herein, the parties shall
pay their own fees and expenses, including their own counsel
fees, incurred in connection with this Agreement or any
transaction contemplated hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement or caused
their duly authorized officers to execute this Agreement as of the date first
above written.
The Company: MEDIX RESOURCES, INC.
By:_________________________
Name:
Title:
The Investor: T3 GROUP, LLC
By:_____________________________
Name:
Title: