EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made this 3rd
day of January, 2005, by and between PRACTICEXPERT, INC., a Nevada corporation
(the "Company"), and PI (CAYMAN) LIMITED, ("Majority Shareholder") a corporation
duly organized and existing under the laws of the Cayman Islands.
This Agreement is being entered into pursuant to the Agreement of
Purchase and Sale of Stock dated as of the date hereof among the Company, the
Majority Shareholder, Practice Xpert Services Corp. and Physicians Informatics,
Inc. (the "Purchase Agreement").
The Company and the Majority Shareholder hereby agree as follows:
1. Registration Rights.
1.1 Certain Definitions. As used in this Agreement, the
following terms shall have the following respective meanings:
(a) "Commission" shall mean the U.S. Securities and
Exchange Commission.
(b) "Common Stock" shall mean the common stock, par
value $.001 per share, of the Company.
(c) The terms "Register," "Registered" and
"Registration" refer to a registration effected by preparing and filing a
Registration Statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such Registration Statement.
(d) "Registrable Securities" shall mean the Shares
until such time as such shares become eligible for sale under subparagraph (k)
of Rule 144 or any successor thereto.
(e) "Registration Expenses" shall mean all expenses
incurred by the Company in complying with this Section 1, including, without
limitation, all federal and state registration, qualification and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, the expense of any special audits incident to or required by
any such Registration and the reasonable fees and disbursements of counsel for
the Selling Shareholders, as selling shareholders.
(f) "Registration Statement" shall mean Form S-1,
Form SB-1, Form S-2, Form SB-2 or Form S-3, whichever is applicable.
(g) "Restriction Termination Date" shall mean, with
respect to any Registrable Securities, the earliest of (i) the date that such
Registrable Securities shall have been Registered and sold or otherwise disposed
of in accordance with the intended method of distribution by the seller or
sellers thereof set forth in the Registration Statement covering such securities
or transferred in compliance with Rule 144, and (ii) the date that an opinion of
counsel to the Company containing reasonable assumptions (which opinion shall be
subject to the reasonable approval of counsel to any affected Majority
Shareholder) shall have been rendered to the effect that any restrictive legend
placed upon the Registrable Securities under the Securities Act can be properly
removed and such legend shall have been removed.
(h) "Rule 144" shall mean Rule 144 promulgated by the
Commission pursuant to the Securities Act and any successor rules thereto.
(i) "Securities Act" shall mean the Securities Act of
1933, as amended.
(j) "Selling Expenses" shall mean all underwriting
discounts and selling commissions applicable to the sale of Registrable
Securities pursuant to this Agreement.
(k) "Shares" shall mean all Common Stock issued
pursuant to the Purchase Agreement and all Common Stock underlying the warrants
issued pursuant to the Purchase Agreement.
(i) "Shareholder(s)" shall mean any person or entity
who was issued shares of Common Stock of the Company pursuant to the Purchase
Agreement.
1.2 Shareholder Representation.
(a) Pursuant to Section 1.3.1 of the Purchase
Agreement, Majority Shareholder shall represent all Shareholders with respect to
their rights as set forth herein.
1.3 Piggyback Registration.
(a) Each time that the Company proposes to Register a
public offering solely of its Common Stock (not including an offering of Common
stock issuable upon conversion or exercise of other securities), other than
pursuant to a Registration Statement on Form S-4 or Form S-8 or similar or
successor forms (collectively, "Excluded Forms"), the Company shall promptly
give written notice of such proposed Registration to the Majority Shareholder,
which shall offer the Majority Shareholder the right to request inclusion of any
Registrable Securities in the proposed Registration.
(b) The Majority Shareholder shall have ten (10) days
or such longer period as shall be set forth in the notice from the receipt of
such notice to deliver to the Company a written request specifying the number of
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shares of Registrable Securities the Majority Shareholder intends to sell and
the holder's intended plan of disposition.
(c) In the event that the proposed Registration by
the Company is, in whole or in part, an underwritten public offering of
securities of the Company, any request under Section 1.2(b) may specify that the
Registrable Securities be included in the underwriting on the same terms and
conditions as the shares of Common Stock, if any, otherwise being sold through
underwriters under such Registration.
(d) Upon receipt of a written request pursuant to
Section 1.2(b), the Company shall promptly use its best efforts to cause all
such Registrable Securities to be Registered, to the extent required to permit
sale or disposition as set forth in the written request.
(e) Notwithstanding the foregoing, if the managing
underwriter of an underwritten public offering, determines and advises in
writing that the inclusion of all Registrable Securities proposed to be included
in the underwritten public offering, together with any other issued and
outstanding shares of Common Stock proposed to be included therein by holders
other than the Shareholders (such other shares hereinafter collectively referred
to as the "Other Shares"), would interfere with the successful marketing of the
securities proposed to be included in the underwritten public offering, then the
number of such shares to be included in such underwritten public offering shall
be reduced, and shares shall be excluded from such underwritten public offering
in a number deemed necessary by such managing underwriter, first by excluding
shares held by the directors, officers, employees and founders of the Company,
and then, to the extent necessary, by excluding Registrable Securities
participating in such underwritten public offering.
(f) All Shares that are not included in the
underwritten public offering shall be withheld from the market by the holders
thereof for a period, not to exceed 12 months following a public offering, that
the managing underwriter reasonably determines as necessary in order to effect
the underwritten public offering. The Majority Shareholder shall execute such
documentation as the managing underwriter reasonably requests to evidence this
lock-up, provided that the directors, officers, other employees and founders of
the Company also execute such documentation. The parties hereto understand that
in the event that a public offering is made, the underwriters may require terms
and conditions contrary to those outlined in this Agreement. The parties hereby
pledge to negotiate in goof faith to come to such agreement as may be necessary
to facilitate the underwriting.
1.4 Preparation and Filing. If and whenever the Company is
under an obligation pursuant to the provisions of this Section 1 to use its best
efforts to effect the Registration of any Registrable Securities, the Company
shall, as expeditiously as practicable:
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(a) prepare and file with the Commission a
Registration Statement with respect to such Registrable Securities and use its
best efforts to cause such Registration Statement to become and remain effective
in accordance with Section 1.3(b) hereof, keeping the Majority Shareholder
advised as to the initiation, progress and completion of the Registration;
(b) prepare and file with the Commission such
amendments and supplements to such Registration Statements, and the prospectus
used in connection therewith, as may be necessary to keep such Registration
Statement effective for nine months and to comply with the provisions of the
Securities Act with respect to the sale or other disposition of all Registrable
Securities covered by such Registration Statement;
(c) furnish to the Majority Shareholder such number
of copies of any summary prospectus or other prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and such
other documents as the Majority Shareholder may reasonably request in order to
facilitate the public sale or other disposition of such Registrable Securities;
(d) use its best efforts to register or qualify the
Registrable Securities covered by such registration statement under the
securities or blue sky laws of such jurisdictions as the Majority Shareholder
shall reasonably request and do any and all other acts or things which may be
necessary or advisable to enable such holder to consummate the public sale or
other disposition in such jurisdictions of such Registrable Securities;
provided, however, that the Company shall not be required to consent to general
service of process, qualify to do business as a foreign corporation where it
would not be otherwise required to qualify or submit to liability for state or
local taxes where it is not liable for such taxes; and
(e) at any time when a prospectus covered by such
Registration Statement is required to be delivered under the Securities Act
within the appropriate period mentioned in Section 1.3(b) hereof, notify the
Majority Shareholder of the happening of any event as a result of which the
prospectus included in such Registration, 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 and, at the request of such seller,
prepare, file and furnish to such seller 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 Majority Shareholder of such shares, 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 statement
therein not misleading in the light of the circumstances then existing.
1.5 Adjustments. At the request of the Purchaser, in the event
of any change in the capitalization of the Company as a result of any stock
split, stock dividend, reverse split, combination, recapitalization, merger,
consolidation, or otherwise, the provisions of this Section 1 shall be
appropriately adjusted.
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1.6 Transfer or Assignment of Registration Rights. The rights
to cause the Company to register securities granted to a Shareholder by the
Company pursuant to this Section 1 may be transferred or assigned by a
Shareholder (i) to any subsidiary, parent, partner, limited partner, retired
partner, member or stockholder of such Shareholder, (ii) to any other
Shareholder, (iii) to any affiliates under common investment management with
such Shareholder and (iv) to a transferee or assignee of not less than two
percent (2%) of the then outstanding capital stock of the Company, provided that
the Company is given written notice at the time of or within a reasonable time
after said transfer or assignment, stating the name and address of the
transferee or assignee and identifying the securities with respect to which such
registration rights are being transferred or assigned, and, provided further
that the transferee or assignee of such rights assumes in writing the
obligations of such Shareholder under this Section 1.
1.7 Expenses. The Company shall pay all Registration Expenses
incurred by the Company in complying with this Section 1; provided however that
all underwriting discounts and selling commissions applicable to the Registrable
Securities covered by registrations effected pursuant to Section 1.2 hereof
shall be borne by the seller thereof, in proportion to the number of Registrable
Securities sold by such seller or sellers.
1.8 Information Furnished by Majority Shareholder. It shall be
a condition precedent to the Company's obligations under this Agreement that the
Majority Shareholder furnish to the Company in writing such information
regarding the Majority Shareholder and the distribution proposed by the Majority
Shareholder as the Company may reasonably request.
1.9 Indemnification.
1.9.1 Company's Indemnification of Majority
Shareholder. The Company shall indemnify Majority Shareholder, each of its
officers, directors and constituent partners, and each underwriter thereof, if
any, and each of its officers, directors, constituent partners, and each person
who controls such underwriter, against all claims, losses, damages or
liabilities (or actions in respect thereof) suffered or incurred by any of them,
to the extent such claims, losses, damages or liabilities arise out of or are
based upon any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus or any related Registration Statement incident to
any such Registration, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of any rule or
regulation promulgated under the Securities Act applicable to the Company and
relating to actions or inaction required of the Company in connection with any
such Registration; and the Company will reimburse the Majority Shareholder, each
such underwriter, each of their officers, directors and constituent partners and
each person who controls the Majority Shareholder or underwriter, for any legal
and any other expenses as reasonably incurred in connection with investigating
or defending any such claim, loss, damage, liability or action; provided
however, that the indemnity contained in this Section 1.6.1 shall not apply to
amounts paid in settlement of any such claim, loss, damage, liability or action
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if settlement is effected without the consent of the Company (which consent
shall not unreasonably be withheld); and provided however, that the Company will
not be liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based upon any untrue statement or
omission based upon information furnished to the Company by the Majority
Shareholder, underwriter, controlling person or other indemnified person and
stated to be for use in connection with the offering of securities of the
Company.
1.9.2 Majority Shareholder's Indemnification of
Company. Majority Shareholder shall indemnify the Company, each of its directors
and officers, each underwriter, if any, of the Company's Registrable Securities
covered by a Registration Statement, each person who controls the Company or
such underwriter within the meaning of the Securities Act, and each holders of
Other Shares, each of its officers, directors and constituent partners and each
person controlling such holder of Other Shares, against all claims, losses,
damages and liabilities (or actions in respect thereof) suffered or incurred by
any of them and arising out of or based upon any untrue statement (or alleged
untrue statement) of a material fact contained in such Registration Statement or
related prospectus, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Majority Shareholder of any rule
or regulation promulgated under the Securities Act applicable to the Majority
Shareholder and relating to actions or inaction required of Majority Shareholder
in connection with the Registration of the Registrable Securities pursuant to
such Registration Statement; and will reimburse the Company, such holders of
Other Shares, such directors, officers, partners, persons, underwriters and
controlling persons for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action; such indemnification and reimbursement shall be to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such Registration
Statement or prospectus in reliance upon and in conformity with information
furnished to the Company by the Majority Shareholder and stated to be
specifically for use in connection with the offering of Registrable Securities.
1.9.3 Indemnification Procedure. Promptly after
receipt by an indemnified party under this Section 1.6 of notice of the
commencement of any action which may give rise to a claim for indemnification
hereunder, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party under this Section 1.6, notify the
indemnifying party in writing of the commencement thereof and generally
summarize such action. The indemnifying party shall have the right to
participate in and to assume the defense of such claim, and shall be entitled to
select counsel for the defense of such claim with the approval of any parties
entitled to indemnification, which approval shall not be unreasonably withheld.
Notwithstanding the foregoing, the parties entitled to indemnification shall
have the, right to employ, separate counsel (reasonably satisfactory to the
indemnifying party) to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified parties
unless the named parties to such action or proceedings include both the
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indemnifying party and the indemnified parties and the indemnifying party or
such indemnified parties shall have been advised by counsel that there are one
or more legal defenses available to the indemnified parties which are different
from or additional to those available to the indemnifying party (in which case,
if the indemnified parties notify the indemnifying party in writing that they
elect to employ separate counsel at the reasonable expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such action or proceeding on behalf of the indemnified parties, it being
understood, however, that the indemnifying party shall not, in connection with
any such action or proceeding or separate or substantially similar or related
action or proceeding in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate counsel at any time for all indemnified parties.
1.9.4 Contribution. If the indemnification provided
for in this Section 1.6 from an indemnifying party is unavailable to an
indemnified party hereunder in respect to any losses, claims, damages,
liabilities or expenses referred to herein, then the indemnifying party, in lieu
of indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified party in connection
with the statements or omissions which result in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified party 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 such indemnifying party or
indemnified party and the parties' relative intent, knowledge, access to
information supplied by such indemnifying party or indemnified party and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or
defending any action, suit, proceeding or claim.
2. Covenants of the Company. The Company agrees to:
(a) Notify the Majority Shareholder of the issuance by the
Commission of any stop order suspending the effectiveness of such Registration
Statement or the initiation of any proceedings for that purpose. The Company
will make every reasonable effort to prevent the issuance of any stop order and,
if any stop order is issued, to obtain the lifting thereof at the earliest
possible time.
(b) Take all other reasonable actions necessary to expedite
and facilitate disposition of the Registrable Securities by the Majority
Shareholder pursuant to the Registration Statement.
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3. Miscellaneous.
(a) Notices required or permitted to be given hereunder shall
be in writing and shall be deemed to be sufficiently given when personally
delivered or sent by registered mail, return receipt requested, addressed as
follows:
(i) if to the Company, at
PracticeXpert, Inc.
00000 Xxxxxxxxxx Xxxx.
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, CFO
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
(ii) if to the Majority Shareholder, at
Xxxxxxx Xxxxx, c/o Physicians Informatics, Inc.
Corporate Park III
000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
(b) 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, will not operate as a waiver thereof. No waiver will be effective unless
and until it is in writing and signed by the party giving the waiver.
(c) This Agreement shall be enforced, governed and construed
in all respects in accordance with the laws of the State of Nevada, without
regard to its principles of conflict of laws.
(d) In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.
(e) This Agreement may not be assigned by the Majority
Shareholder without the written consent of the Company.
(f) This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and may be amended
only by a writing executed by the Company and the Majority Shareholder.
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(g) This Agreement may be executed in one or more
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
Agreement.
IN WITNESS WHEREOF, the Company has executed this Agreement for the
benefit of the Majority Shareholder by its duly authorized officer as of the
date first above written.
PRACTICEXPERT, INC.
By: /s/ Xxxxxxxx Doctor
------------------------------
Xxxxxxxx Doctor
President and CEO
PI (CAYMAN) LIMITED
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
-----------------------------
Title: CEO
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