REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT, dated the 30th day of November, 2000,
between MIDWEST FIRST NATIONAL, INC. (referred to as the "Investor"), COLUMBIA
FINANCIAL GROUP, INC., and MUTUAL VENTURES CORP. (the "Persons who have
Registration Rights") and Medi-Hut Co., Inc. a corporation incorporated under
the laws of the State of Delaware, and having its principle place of business
at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000 (the "Company").
WHEREAS, simultaneously with the execution and delivery of this
Agreement and from time to time thereafter, the Investors are purchasing from
the Company, pursuant to the Unit Purchase Agreement dated the date hereof
(the "Purchase Agreement"), shares of Common Stock and Warrants (hereinafter
collectively referred to as the "Securities" of the Company); All capitalized
terms not hereinafter defined shall have that meaning assigned to them in the
Purchase Agreement; and
WHEREAS, prior to the execution and delivery of this Agreement, the
Company has issued Warrants to Columbia, in return for services rendered, from
time to time as provided in two separate Consulting Agreements dated March 2,
1990, June 1, 1999 and October 1, 2000 (the "Consulting Agreement"); and
WHEREAS, prior to the execution and delivery of this Agreement,
Columbia assigned and transferred those warrants issued to it under the terms
of the March 2, 1998 Agreement to Mutual Ventures Corporation, which is the
true and lawful owner of said warrants.
WHEREAS, the Company desires to grant to the Holders the
registration rights set forth herein.
NOW, THEREFORE, the parties hereto mutually agree as follows:
Section 1. Registrable Securities. As used herein the term
"Registrable Security" means the Common Stock of the Company issued under the
Purchase Agreement or as the result of the execution of warrants issued under
that Agreement or the Consulting Agreement; provided, however, that with
respect to any particular Registrable Security, such security shall cease to
be a Registrable Security when, as of the date of determination, (i) it has
been effectively registered under the Securities Act of 1933, as amended (the
"1933 Act") and disposed of pursuant thereto, (ii) registration under the
1933 Act is no longer required for the immediate public distribution of such
security as a result of the provisions of Rule 144 promulgated under the 1933
Act, or (iii) it has ceased to be outstanding. The term "Registrable
Securities" means any and/or all of the securities falling within the
foregoing definition of a Registrable Security. In the event of any merger,
reorganization, consolidation, recapitalization or other change in corporate
structure affecting the Common Stock, such adjustment shall be made in the
definition of Registrable Security as is
appropriate in order to prevent any dilution or enlargement of the rights
granted pursuant to this Section.
Section 2. Restrictions on Transfer. The Holders acknowledge and
understand that prior to the registration of the Registrable Securities as
provided herein, the Registrable Securities and the Securities are "restricted
securities" as defined in Rule 144 promulgated under the Act. The Holders
understand that no disposition or transfer of the Registrable Securities or
the Securities may be made by the Holders in the absence of (i) an opinion of
counsel to the Holders that such transfer may be made without registration
under the 1933 Act, or (ii) such registration.
Section 3. Registration Rights.
(a) The Company agrees that it will prepare and file with
the Securities and Exchange Commission ("SEC"), on or prior to December 31,
2000, a registration statement (on Form SB-2, or other appropriate
registration statement) under the 1933 Act (the "Registration Statement"), at
the sole expense of the Company (except as provided in Section 3(c) hereof),
in respect of all holders of Registrable Securities, so as to permit a public
offering and sale of the Registrable Securities under the Act. The Company
shall use its best efforts to cause the Registration Statement to become
effective on or before February 15, 2000. The number of shares of Common
Stock designated in the Registration Statement to be registered shall be not
less than (i) 100% of the number of Common Shares acquired under the Purchase
Agreement, plus (ii) 100% of the number of Warrant Shares issuable assuming
all of the Warrants had been issued pursuant to the Purchase Agreement and
Consulting Agreement.
(b) The Company will maintain the Registration Statement,
or post-effective amendment filed under this Section 3 hereof current under
the 1933 Act until the earlier of (i) the date that all of the Registrable
Securities have been sold pursuant to the applicable Registration Statement,
(ii) the date the holders thereof receive an opinion of counsel that the
Registrable Securities may be sold under the provisions of Rule 144 (without
limitation) or (iii) five years after the Subscription Date.
(c) All fees, disbursements and out-of-pocket expenses and
costs incurred by the Company in connection with the preparation and filing
of the Registration Statement under subparagraph 3(a) and in complying with
applicable securities and blue sky laws (including, without limitation, all
attorneys' fees) shall be borne by the Company. The Holders shall bear the
cost, pro rata, of underwriting discounts and commissions, if any, applicable
to the Registrable Securities being registered and the fees and expenses of
its counsel. The Company shall qualify any of the securities for sale in such
states as such Holder reasonably designates and shall furnish indemnification
in the manner provided in Section 6 hereof. The Company at its expense will
supply the Holders with copies of the Registration Statement and the
prospectus or offering circular included therein and other related documents
in such quantities as may be reasonably requested by the Holders.
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(d) The Company shall not be required by this Section 3 to
include a Holder's Registrable Securities in any Registration Statement which
is to be filed if, in the opinion of counsel for both the Holder and the
Company (or, should they not agree, in the opinion of another counsel
experienced in securities law matters acceptable to counsel for the Holder and
the Company) the proposed offering or other transfer as to which such
registration is requested is exempt from applicable federal and state
securities laws and would result in all purchasers or transferees obtaining
securities which are not "restricted securities", as defined in Rule 144 under
the 1933 Act.
(e) In the event the Registration Statement to be filed by
the Company pursuant to Section 3(a) above is not filed with the SEC on or
before January 15, 2000 and/or the Registration Statement is not declared
effective by the SEC on or before February 15, 2000, then the Company will pay
the Holders (pro rated on a daily basis), as liquidated damages for such
failure and not as a penalty, two percent of the purchase price of the then
outstanding Securities for every 30 calendar day period until the Registration
Statement has been filed and/or declared effective. Such payment of the
liquidated damages shall be made to the Holders in cash, immediately upon
demand, provided, however, that the payment of such liquidated damages shall
not relieve the Company from its obligations to register the Registrable
Securities. If the Company does not remit the damages to the Holder as set
forth above, the Company will pay the Holders reasonable costs of collection,
including attorneys fees, in addition to the liquidated damages. The
registration of the Securities pursuant to this provision shall not affect or
limit Holder's other rights or remedies as set forth in this Agreement.
(f) The Company agrees that it shall declare the
Registration Statement effective within three Business Days after being
informed by the SEC that it may do so. The Company also agrees that it shall
respond to any questions and/or comments from the SEC which relate to the
Registration Statement within five Business Days of receipt of such question
or comment.
Section 4. Cooperation with Company. Each of the Holders will
cooperate with the Company in all respects in connection with this Agreement,
including timely supplying all information reasonably requested by the Company
and executing and returning all documents reasonably requested in connection
with the registration and sale of the Registrable Securities.
Section 5. Registration Procedures. If and whenever the
Company is required by any of the provisions of this Agreement to effect the
registration of any of the Registrable Securities under the Act, the Company
shall (except as otherwise provided in this Agreement), as expeditiously as
possible:
(a) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective and to comply with the provisions of the Act with respect to the
sale or other disposition of all securities covered by such registration
statement whenever the Holder shall desire to sell or otherwise dispose of the
same (including prospectus supplements with
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respect to the sales of securities from time to time in connection with a
registration statement pursuant to Rule 415 promulgated under the Act);
(b) furnish to each Holder such numbers of copies of a
summary prospectus or other prospectus, including a preliminary prospectus or
any amendment or supplement to any prospectus, in conformity with the
requirements of the Act, and such other documents, as such Holder may
reasonably request in order to facilitate the public sale or other disposition
of the securities owned by such Holder;
(c) register and qualify the securities covered by the
Registration Statement under such other securities or blue sky laws of such
jurisdictions as the Holders shall reasonably request, and do any and all
other acts and things which may be necessary or advisable to enable each
Holder to consummate the public sale or other disposition in such jurisdiction
of the securities owned by such Holder, except that the Company shall not for
any such purpose be required to qualify to do business as a foreign
corporation in any jurisdiction wherein it is not so qualified or to file
therein any general consent to service of process;
(d) list such securities on the Principal Market on which
any securities of the Company are then listed, if the listing of such
securities is then permitted under the rules of such Principal Market;
(e) enter into and perform its obligations under an
underwriting agreement, if the offering is an underwritten offering, in
usual and customary form, with the managing underwriter or underwriters of
such underwritten offering;
(f) notify each Holder of Registrable Securities covered by
the Registration Statement any time when a prospectus relating thereto covered
by the Registration Statement is required to be delivered under the Act, and
of the happening of any event of which it has knowledge as a result of which
the prospectus included in the Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing.
Section 6. Information by Holder. Each Holder of Registrable
Securities included in any registration statement shall furnish to the Company
such information regarding such Holder and the distribution proposed by such
Holder as the Company may request in writing and as shall be required in
connection with any registration, qualification or compliance referred to in
this Section.
Section 7. Assignment. The rights granted the Holders under this
Agreement shall not be assigned without the written consent of the Company,
which consent shall not be unreasonably withheld. This Agreement is binding
upon and inures to the benefit of the parties hereto and their respective
heirs, successors and permitted assigns.
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Section 8. Termination of Registration Rights. The rights granted
pursuant to this Agreement shall terminate as to each Holder (and permitted
transferee under Section 7 above) upon the occurrence of any of the following:
(a) all such Holder's securities subject to this Agreement
have been registered;
(b) all of such Holder's securities subject to this
Agreement may be sold without such registration pursuant to Rule 144
promulgated by the SEC pursuant to the Securities Act;
(c) all of such Holder's securities subject to this
Agreement can be sold pursuant to Rule 144(k) without volume limitation; or
five years from the issuance of the Registrable Securities.
Section 9. Indemnification.
(a) In the event of the filing of any Registration
Statement with respect to Registrable Securities pursuant to Section 3 hereof,
the Company agrees to indemnify and hold harmless the Holders, and each
officer, director of the Holders or person, if any, who controls the Holders
within the meaning of the Securities Act ("Distributing Holders") against any
losses, claims, damages or liabilities, joint or several (which shall, for all
purposes of this Agreement, include, but not be limited to, all costs of
defense and investigation and all attorneys' fees), to which the Distributing
Holders may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any such Registration Statement or
any related preliminary prospectus, final prospectus, offering circular,
notification or amendment or supplement thereto, or arise out of or are based
upon 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; provided, however, that the Company will not be liable in any such
case 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 made in such Registration Statement, preliminary
prospectus, final prospectus, offering circular, notification or amendment or
supplement thereto in reliance upon, and in conformity with, written
information furnished to the Company by the Distributing Holders, specifically
for use in the preparation thereof. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) In the event of the filing of any Registration
Statement with respect to Registrable Securities pursuant to Section 3 hereof,
each Distributing Holder agrees that it will indemnify and hold harmless the
Company, and each officer, director of the Company or person, if any, who
controls the Company within the meaning of the Securities Act, against any
losses, claims, damages or liabilities (which shall, for all purposes of this
Agreement, include, but not be limited
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to, all costs of defense and investigation and all attorneys' fees) to which
the Company or any such officer, director or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in a Registration Statement, requested by such Distributing
Holder, or any related preliminary prospectus, final prospectus, offering
circular, notification or amendment or supplement thereto, or arise out of or
are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, but in each case only to the extent that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in such Registration Statement, preliminary prospectus,
final prospectus, offering circular, notification or amendment or supplement
thereto in reliance upon, and in conformity with, written information
furnished to the Company by such Distributing Holder, specifically for use in
the preparation thereof and, provided further, that the indemnity agreement
contained in this Section 9(b) shall not inure to the benefit of the Company
with respect to any person asserting such loss, claim, damage or liability who
purchased the Registrable Securities which are the subject thereof if the
Company failed to send or give (in violation of the Securities Act or the
rules and regulations promulgated thereunder) a copy of the prospectus
contained in such Registration Statement to such person at or prior to the
written confirmation to such person of the sale of such Registrable
Securities, where the Company was obligated to do so under the Securities Act
or the rules and regulations promulgated thereunder. This indemnity agreement
will be in addition to any liability which the Distributing Holders may
otherwise have.
(c) Promptly after receipt by an indemnified party under
this Section of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve the indemnifying party from any liability which it may have
to any indemnified party otherwise than as to the particular item as to which
indemnification is then being sought solely pursuant to this Section. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate in, and, to the extent that it may wish, jointly with
any other indemnifying party similarly notified, assume the defense thereof,
subject to the provisions herein stated and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party
under this Section for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof other than
reasonable costs of investigation, unless the indemnifying party shall not
pursue the action to its final conclusion. The indemnified party shall have
the right to employ separate counsel in any such action and to participate in
the defense thereof, but the fees and expenses of such counsel shall not be at
the expense of the indemnifying party if the indemnifying party has assumed
the defense of the action with counsel reasonably satisfactory to the
indemnified party; provided that if the indemnified party is the Distributing
Holder, the fees and expenses of such counsel shall be at the expense of the
indemnifying party if (i) the employment of such counsel has been specifically
authorized in writing by the indemnifying party, or (ii) the named parties to
any such action
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(including any impleaded parties) include both the Distributing Holder and the
indemnifying party and the Distributing Holder shall have been advised by such
counsel that there may be one or more legal defenses available to the
indemnifying party different from or in conflict with any legal defenses which
may be available to the Distributing Holder (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf
of the Distributing Holder, it being understood, however, that the
indemnifying party shall, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable only for the
reasonable fees and expenses of one separate firm of attorneys for the
Distributing Holder, which firm shall be designated in writing by the
Distributing Holder). No settlement of any action against an indemnified
party shall be made without the prior written consent of the indemnified
party, which consent shall not be unreasonably withheld.
Section 10. Contribution. In order to provide for just and
equitable contribution under the Securities Act in any case in which (i) the
Distributing Holder makes a claim for indemnification pursuant to Section 9
hereof but is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to
appeal or the denial of the last right of appeal) that such indemnification
may not be enforced in such case notwithstanding the fact that the express
provisions of Section 9 hereof provide for indemnification in such case, or
(ii) contribution under the Securities Act may be required on the part of any
Distributing Holder, then the Company and the applicable Distributing Holder
shall contribute to the aggregate losses, claims, damages or liabilities to
which they may be subject (which shall, for all purposes of this Agreement,
include, but not be limited to, all costs of defense and investigation and all
attorneys' fees), in either such case (after contribution from others) on the
basis of relative fault as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the applicable
Distributing Holder, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Distributing Holder agree that it
would not be just and equitable if contribution pursuant to this Section were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to in this
Section. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this Section shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
Section 11. Notices. Any notice pursuant to this Agreement by the
Company or by the Holders shall be in writing and shall be deemed to have been
duly given if delivered by (i) hand, (ii) by facsimile and followed by mail
delivery or (iii) if mailed by certified mail, return receipt requested,
postage prepaid, addressed as follows:
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(a) If to the Company:
Medi-Hut Co., Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Telephone: (000) 000-0000
(b) If to the Persons who have Registration Rights:
Columbia Financial Group, Inc.
0000 Xxxx Xxxx, #000
Xxxxxxxxxxx, Xxxxxxxx 00000
(c) If to the Investors:
Midwest First National Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Notices shall be deemed given at the time they are delivered personally or
five calendar days after they are mailed in the manner set forth above. If
notice is delivered by facsimile to the Company and followed by mail, delivery
shall be deemed given two calendar days after such facsimile is sent.
Section 12. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 13. Headings. The headings in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 14. Choice of Law; Venue; Jurisdiction. This Agreement will
be construed and enforced in accordance with and governed by the laws of the
State of New York, except for matters arising under the Securities Act,
without reference to principles of conflicts of law. Each of the parties
consents to the jurisdiction of the U.S. District Court sitting in the State
of New York, for the Central District of New York in connection with any
dispute arising under this Agreement and hereby waives, to the maximum extent
permitted by law, any objection, including any objection based on forum non
conveniens, to the bringing of any such proceeding in such jurisdictions.
Each party hereby agrees that if another party to this Agreement obtains a
judgment against it in such a proceeding, the party which obtained such
judgment may enforce same by summary judgment in the courts of any country
having jurisdiction over the party against whom such judgment was obtained,
and each party hereby waives any defenses available to it under local law and
agrees to the
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enforcement of such a judgment. Each party to this Agreement irrevocably
consents to the service of process in any such proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to such party
at its address set forth herein. Nothing herein shall affect the right of any
party to serve process in any other manner permitted by law. Each party
waives its right to a trial by jury.
Section 15. Severability. If any provision of this Agreement shall
for any reason be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision hereof and this
Agreement shall be construed as if such invalid or unenforceable provision had
never been contained herein.
[Remainder of Page Intentionally Left Blank]
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed, on the day and year first above written.
MEDI-HUT CO., INC.
Attest:
/s/Xxxxxxx Xxxxxxxxx By: /s/ Xxxxxx Xxxxxxxxx
By:_________________________ ________________________
Name: Xxxxxxx Xxxxxxxxx Name: Xxxxxx Xxxxxxxxx
Title: Secretary Title: President
COLUMBIA FINANCIAL GROUP, INC.
By /s/ Xxx Rieu
___________________________
Name: Xxx Rieu
Title: President
` MUTUAL VENTURES CORP.
By /s/ Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: President
MIDWEST FIRST NATIONAL, INC.
By /s/ Xxxxxx Xxxxxx
Name: _Dennis Sutton____
Title: manager
