Exhibit 10.7
THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN
REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE
"COMMISSION") OR THE SECURITIES AGENCY OF ANY STATE PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), AND
ARE OR WILL BE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER
THE 1933 ACT. THIS WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE MAY
NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT AND UNDER APPLICABLE STATE SECURITIES
LAWS, OR IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION UNDER THE PROVISIONS
OF THE 1933 ACT AND UNDER PROVISIONS OF APPLICABLE STATE SECURITIES LAWS.
MEDIX RESOURCES, INC.
AMENDED AND RESTATED
COMMON STOCK PURCHASE WARRANT
September 8, 1999
(As Amended February 18, 2002)
To Purchase Up To 7,000,000 Shares of Common Stock
THIS CERTIFIES that, for value received, Professional Claim Services, Inc.
doing business as WellPoint Pharmacy Management, a New York corporation with
offices at 0000 Xx Xxxxxx Xxxxx, Xxxxxxxx Xxxx, XX 00000 (the "Investor"), is
entitled, upon the terms and subject to the conditions hereinafter set forth, at
any time, and from time to time, on or prior to 5:00 p.m. Eastern Time on
September 8, 2004 (the "Termination Date"), but not thereafter, to subscribe for
and purchase from MEDIX RESOURCES, INC., a corporation incorporated in the State
of Colorado, with offices at 0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx,
Xxxxxxxx 00000 (the "Company"), up to Seven Million (7,000,000) shares (the
"Warrant Shares") of Common Stock, $.001 par value per share of the Company (the
"Common Stock"), with the final amount of fully vested Warrant Shares to be
available upon exercise of this Warrant to be determined as set forth in Section
1 below. The purchase price of each share of Common Stock (the "Exercise Price")
under this Warrant shall be as provided in Section 1 below. The Exercise Price
and the number of Warrant Shares for which the Warrant is exercisable shall be
subject to adjustment as provided herein. This Warrant is being issued pursuant
to the terms of a Binding Letter of Intent for Pilot and Production Programs
among the Investor, the Company and the Company's wholly owned subsidiary,
Cymedix Lynx Corporation ("Cymedix"), dated September 8, 1999 (the "LOI").
Capitalized terms not defined herein shall have the meanings set forth in the
LOI.
1. Vesting Schedule. This Warrant shall cover and be exercisable for only so
much of the Warrant Shares as have been vested through the occurrence of the
following specific target events:
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Incentive Running
Earn-Out Categories Specific Target: Warrants by Tally of
Target Warrants
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I. Pilot Agreement Execution of Pilot Agreement 1,0000,000 1,000,000
(Earned December 28, 1999) exercisable at
$0.30 per share
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II. National Medix appointment 350,000 1,350,000
Handheld (Earned April 17, 2001) exercisable at
Integrator Role $0.30 per share
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III. Generic Pharmacy Completion of the pilot 500,000 1,850,000
Transactions program and the beginning of exercisable at
Production the implementation of the $0.30 per share
Agreement production phase for generic
pharmacy transactions
(earned July 15, 2001)
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IV. WellPoint Owned Execution of a Production 600,000 2,450,000
Health Plans Agreement with Blue Cross of
California that includes at
a minimum the use of Cymedix
software and the payment of
transactions fees for
medical claims and
eligibility transactions.
BCBS of Georgia - Execution
of Production Agreements for
the use of Cymedix software
and the payment of
transaction fees covering
one or more of the following
transactions:
1.) Medical claims and 200,000 2,650,000
eligibility
transactions
2.) PBM transactions 300,000 2,950 ,000
3.) Referrals and/or
authorization 25,000 2,975,000
transactions
All above
warrants when
vested shall be
exercisable at
$0.30 per share
UniCare, Chicago - Execution
of Production Agreements
covering the use of Cymedix
software and the payment of
transaction fees for one or
more of the following
transactions: 50,000 3,025,000
exercisable at
1.) Medical claims and $0.5 0 per share
eligibility
transactions
200,000
exercisable at 3,225,000
$0.50 per share
2.) PBM transactions 25,000
exercisable at
$0.30 per share 3,250,000
3.) Referrals and/or
authorization
transactions
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V. Wellpoint Execution of Production
External Health Agreements covering the use
Plans* of Cymedix software and the For each
payment of transaction fees agreement with
by any of Investor's non-affiliated
non-affiliated health plan health plan
clients (up to two clients) clients
for one or more of the 3,300,000
following transactions: (3,575,000
50,000 for second
client)
1.) Medical claims and
eligibility 3,500,000
transactions (3,775,000
200,000 for second
client)
2.) PBM transactions 3,525,000
(3,800,000
25,000 for second
client)
3.) Referrals and/or
authorization
transactions
All warrants
vested in this
category shall
be exercisable
at $0.50 per
share
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VI. MedUnite Execution of Production
Agreements covering the use
of Cymedix software and the
payment of transaction fees
for one or more of the
following transactions:
150,000
1.) Medical claims and 3,950,000
eligibility 100,000
transactions 4,050,000
2.) PBM transactions 100,000
4,150,000
All warrants
3.) Lab transactions vested in this
category shall
be exercisable
at $0.50 per
share
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VII. Medix Minimum investment of 2,000,000 6,150,000
Investment Funding $5,000,000 cash (not
counting exercise of any - 1,000,000
warrants described herein) shares
exercisable at
$0.50 per share
(replacing the
final tranche of
the vesting
schedule in the
original
warrant) **
- 1,000,000
shares
exercisable at
$1.75 per share
represent-ing a
new award.
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VIII. Award Share award reserve for 850,000 7,000,000
Contingency targets of opportunity as exercisable at
Reserve* mutually determined $0.50 per share
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*In connection with the opportunity to provide Medix software to other customers
of Investor, Medix and Investor agree to negotiate in good faith to establish
appropriate incentive warrant targets for Investor in connection with each such
opportunity, to be provided from the Award Contingency Reserve described in
Category VIII above. In the event that Production Agreements with more than two
non-affiliated clients are executed as contemplated by Category V, the warrants
otherwise provided under Category VIII shall be available to be awarded to
Investor.
**If the Award Contingency Reserve is exhausted, and if the Investor has not made
the minimum investment required by Category VII by such time, then Medix agrees
to treat up to the full amount of these 1,000,000 shares as part of the Award
Contingency Reserve, subject to the negotiations described in the preceding
paragraph.
2. Transferability of the Warrant. This Warrant and all rights hereunder
are not transferable or assignable by the Investor, except to entities that
either control, are controlled by or are under common control with, the
Investor. No transfer shall be effected without written evidence of such control.
3. Authorization of Shares. The Company covenants that all shares of
Common Stock which may be issued upon the exercise of rights represented by this
Warrant will, upon exercise of the rights represented by this Warrant and full
payment of the Exercise Price, be duly authorized, validly issued, fully paid and
nonassessable and free from all taxes, liens and charges in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).
4. Exercise of Warrant. Exercise of the purchase rights for vested Warrant
Shares represented by this Warrant may be made at any time or times, before the
close of business on the Termination Date, or such earlier date on which this
Warrant may terminate as provided in this Warrant, by the surrender of this
Warrant and the Notice of Exercise Form annexed hereto duly executed, at the
office of the Company (or such other office or agency of the Company as it may
designate by notice in writing to the registered holder hereof at the address of
such holder appearing on the books of the Company) and upon payment of the
Exercise Price of the shares thereby purchased in United States currency;
whereupon the holder of this Warrant shall be entitled to receive a certificate
for the number of shares of Common Stock so purchased. Payment of the Exercise
Price may be by certified check or cashier's check or by wire transfer to an
account designated by the Company in an amount equal to the Exercise Price
multiplied by the number of Warrant Shares. If this Warrant is only exercised in
part, the Company shall return this Warrant with a notation affixed to the
Warrant indicating how many Warrant Shares had been exercised at what Exercise
Price and such notation shall be signed by an officer of the Company.
5. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this Warrant.
6. Charges, Taxes and Expenses. Issuance of certificates for shares of
Common Stock upon the exercise of this Warrant shall be made without charge to
the holder hereof for any issue or other incidental expense in respect of the
issuance of such certificate (other than taxes in respect of any transfer
occurring contemporaneously with such issue), all of which taxes and expenses
shall be paid by the Company, and such certificates shall be issued in the name
of the holder of this Warrant or in such name or names as may be directed by the
holder of this Warrant.
7. Closing of Books. The Company will not close its shareholder books or
records in any manner which prevents the timely exercise of this Warrant for a
period in excess of five (5) trading days per year.
8. No Rights as Shareholder until Exercise. This Warrant does not entitle
the holder hereof to any voting rights or other rights as a shareholder of the
Company prior to the exercise thereof. Upon the surrender of this Warrant and
the payment of the aggregate Exercise Price, the Warrant Shares so purchased
shall be, and be deemed to be, issued to such holder as the record owner of such
Warrant Shares as of the close of business on the later of the date of such
surrender or payment.
9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
represents and warrants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
certificate, and in case of loss, theft or destruction, of indemnity or security
reasonably satisfactory to it, and upon reimbursement to the Company of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
such Warrant, if mutilated, the Company will make and deliver a new Warrant or
stock certificate of like tenor and dated as of such cancellation, in lieu of
such Warrant or stock certificate.
10. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday in the State of Colorado
then such action may be taken or such right may be exercised on the next
succeeding day not a legal holiday.
11. Effect of Certain Events.
(a) Sale or Merger for Cash. If at any time the Company proposes
(i) to sell or otherwise convey all or substantially all of its assets or (ii) to
effect a transaction (by merger or otherwise) in which more than 50% of the
voting power of the Company is disposed of (collectively, a "Sale or Merger
Transaction"), in which the consideration to be received by the Company or its
shareholders consists solely of cash, then the Warrant shall terminate if the
Warrant has not been exercised by the effective date of such transaction, and the
Company shall give the holder of this Warrant thirty (30) days' prior written
notice of such termination and of the proposed effective date of the
transaction.
(b) Sale or Merger for Other Than Cash. In case the Company shall
at any time effect a Sale or Merger Transaction in which the consideration to be
received by the Company or its shareholders consists in part of consideration
other than cash, the holder of this Warrant shall have the right thereafter to
purchase, by exercise of this Warrant and payment of the aggregate Exercise Price
in effect immediately prior to such action, the kind and amount of shares and
other securities and property which it would have owned or have been entitled to
receive after the happening of such transaction had this Warrant been exercised
immediately prior thereto.
(c) Repurchase of Capital Stock. In case at any time or from time to
time, the Company shall (except as hereinafter provided) repurchase any of its
Capital Stock (the "Repurchased Stock"), then upon the consummation of such
repurchase the Exercise Price then in effect shall be decreased to an amount
determined by multiplying the Exercise Price in effect immediately prior to such
adjustment by a fraction, (x) the numerator of which is the Current Market Price
(as defined below) per share of Common Stock as determined on the date on which
such repurchase is made, and (y) the denominator of which is the Current Market
Price per share of Common Stock on the date immediately prior to such repurchase
(after giving effect to any stock splits, stock dividends or other stock
repurchases between the date of such repurchase and the date on which such
calculation is made); provided, however, that if the numerator of such fraction
is greater than the denominator of such fraction, then no adjustment to the
Exercise Price shall be made. No adjustment of the Exercise Price shall be made
under this Subsection upon the repurchase of the Repurchased Stock if such
repurchase, together with all repurchases during the previous twelve (12)
calendar months, is (1) a repurchase of less than 10% of the issued and
outstanding class of Capital Stock being repurchased at the beginning of such
twelve month period, or (2) a repurchase of stock options and Common Stock
underlying such stock options in a transaction or series of transactions during
such twelve (12) month period not exceeding $100,000 in the aggregate. "Capital
Stock" for this purpose shall mean the Company's Common Stock or any preferred
stock, but conversions of convertible stock shall not be deemed to be
"repurchases" for this paragraph. "Current Market Price" per share for the Common
Stock shall be deemed to be the closing price for the day in question on the
principal trading market of the Common Stock at the time, or if no closing price
is reported, the average of the closing bid and asked prices for the day in
question.
(d) Issuance of Additional Shares of Common Stock. "Additional
Shares of Common Stock" shall mean all shares of Common Stock issued by the
Company after February 18, 2002, other than the shares of Common Stock issued (i)
to a holder of convertible securities upon conversion of such convertible
securities, (ii) upon exercise of options or warrants issued prior to such date,
(iii) upon the exercise of options issued to employees, directors and consultants
to the Company as compensation for their services to the Company after such date
with respect to an aggregate of 10,000,000 shares, and (iv) under the Company's
equity line of credit in effect on February 18, 2002. In case at any time or
from time to time, the Company shall (except as hereinafter provided) issue any
Additional Shares of Common Stock for a consideration per share less than any
Exercise Price then in effect for vested Warrants Shares (as so adjusted from
time to time for additional issuances, reductions and other adjustments to the
number of shares of Common Stock outstanding, including without limitation stock
splits, stock dividends, reverse stock splits, pro rata repurchases, and any
other good faith transfer of securities or other transaction which results in an
increase or decrease in the number of shares of Common Stock outstanding) (such
amount per share, the 'Minimum Issue Price") on the Computation Date (determined
as set forth below), then the Exercise Price for such vested Warrant Shares shall
be adjusted to be that number determined by multiplying the Exercise Price in
effect immediately prior to such adjustment by a fraction (x) the numerator of
which shall be the number of shares of Common Stock then outstanding, plus the
number of shares of Common Stock which the aggregate consideration for the total
number of such Additional Shares of Common Stock so issued would purchase at the
Minimum Issue Price per share of Common Stock and (y) the denominator of which
shall be the number of shares of Common Stock then outstanding plus the number of
such Additional Shares of Common Stock so issued. The provisions of this
Subsection shall not apply to any issuance of Additional Shares of Common Stock
for which an adjustment is provided under Section 12. For purposes of this
Subsection, the "Computation Date" shall be the earlier of (x) the date on which
the Company shall enter into a firm contract for the issuance of such Additional
Shares of Common Stock, or (y) the date of actual issuance of such Additional
Shares of Common Stock.
(e) Issuance of Warrants, Options or Other Rights. In case at any
time or from time to time, after February 18, 2002, the Company shall propose to
issue or distribute, any warrants, convertible securities, options or other
rights to subscribe for or purchase any Additional Shares of Common Stock or any
securities convertible into Additional Shares of Common Stock, and the
consideration per share for which Common Stock may at any time thereafter be
issuable pursuant to such warrants, convertible securities, options or other
rights or pursuant to the terms of such convertible securities shall be less than
the Minimum Issue Price for any vested Warrant Shares then in effect on the
Computation Date (as determined below), then the Exercise Price shall be adjusted
as provided in the second sentence of Subsection (d) above. Such adjustment
shall be made on the basis that (i) the consideration per share for which such
Additional Shares of Common Stock may be issued equals a fraction, (x) the
denominator of which is the maximum number of Additional Shares of Common Stock
issuable pursuant to all such warrants, convertible securities, options or other
rights or necessary to effect the conversion or exchange of all such convertible
securities, and (y) the numerator of which is the minimum consideration received
and receivable by the Company for such Additional Shares of Common Stock pursuant
to such warrants, convertible securities, options or other rights or pursuant to
the terms of such convertible securities, (ii) the maximum number of Additional
Shares of Common Stock issuable pursuant to all such warrants, convertible
securities, options or other rights or necessary to effect the conversion or
exchange of all such convertible securities shall be deemed to have been issued
as of the Computation Date (determined as set forth in the last sentence of this
Subsection), and (iii) the aggregate consideration for such maximum number of
Additional Shares of Common Stock shall be deemed to be the minimum consideration
received and receivable by the Company for the issuance of such Additional Shares
of Common Stock pursuant to such warrants, convertible securities, options or
other rights or pursuant to the terms of such convertible securities.
For purposes of this Subsection, the 'Computation Date" shall be the
earliest of (a) the date on which the Company shall take a record of the holders
of its securities for the purpose of entitling them to receive any such warrants,
convertible securities, options or other rights, (b) the date on which the
Company shall enter into a firm contract for the issuance of such warrants,
options or other rights, and (c) the date of actual issuance of such warrants,
options or other rights. No adjustment of the Exercise Price shall be made under
this Subsection upon the issuance of any convertible securities which are issued
pursuant to the exercise of any warrants, options or other subscription or
purchase rights therefor, if any such adjustment shall previously have been made
upon the issuance of such warrants, options or other rights pursuant to this
Subsection. Supersede
(f) Superseded Adjustment of Exercise Price. If at any time after
any adjustment of the Exercise Price shall have been made pursuant to the
foregoing Subsection (e) on the basis of the issuance of warrants, convertible
securities, options or other rights or the issuance of other convertible
securities or after any new adjustment of the Exercise Price shall have been made
pursuant to this Subsection (f),
(A) such warrants, convertible securities, options or other rights or
the right of conversion or exchange in such other convertible
securities shall expire, and a portion of such warrants, convertible
securities, options or rights, or the right of conversion or exchange
in respect of a portion of such other convertible securities, as the
case may be, shall not have been exercised; or
(B) the consideration per share for which Additional Shares of Common
Stock are issuable pursuant to such warrants, convertible securities,
options, or rights or the terms of such other convertible securities,
shall be increased solely by virtue of provisions therein contained
for an automatic increase in such consideration per share upon the
arrival of a specified date or the happening of a specified event,
such previous adjustment shall be rescinded and annulled and the
Additional Shares of Common Stock which were deemed to have been
issued by virtue of the computation made in connection with the
adjustment so rescinded and annulled shall no longer be deemed to
have been issued by virtue of such computation. Thereupon, a
re-computation shall be made of the effect of such warrants,
convertible securities, options or other rights, or other convertible
securities on the basis of:
(1) treating the number of Additional Shares of Common Stock, if any,
theretofore actually issued or issuable pursuant to the previous
exercise of such warrants, convertible securities, options or other
rights or such right of conversion or exchange, as having been issued
on the date or dates of such issuance as determined for purposes of
such previous adjustment and for the consideration actually received
therefor, and
(2) treating any such warrants, convertible securities, options or
other rights, which then remain outstanding as having been granted or
issued immediately after the time of such increase of the
consideration per share for such Additional Shares of Common Stock
issuable under such warrants, convertible securities, options or
other rights or other convertible securities;
and, if and to the extent called for by the foregoing provisions of this
Subsection (f) on the basis aforesaid, a new adjustment of the Exercise Price
shall be made, and such new adjustment shall supersede the previous adjustment so
rescinded and annulled. If any such superseding adjustment of the Exercise Price
is made after the exercise of this Warrant by a former holder of this Warrant, in
lieu of such adjustment, if, and only if, such former holder owns shares of
Common Stock obtained upon exercise of this Warrant, the Company shall have the
option to purchase the number of shares of Common Stock from such former holder
equal to the difference between (x) the number of shares of Common Stock which
such former holder received upon exercise prior to the adjustment, and (y) the
number of shares of Common Stock which such former holder would have received on
conversion had such adjustment been made prior to exercise. The purchase price
per share of such stock shall be $0.01 per share.
(g) Other Provisions Applicable to Adjustments Under this Section.
The following provisions shall be applicable to the making of adjustments of the
Exercise Price hereinbefore provided for in this Section 11:
(A) Treasury Stock. The sale or other disposition of any issued
shares of Common Stock owned or held by or for the account of the
Company shall be deemed an issuance thereof for purposes of this
Section 11.
(B) Computation of Consideration. To the extent that any Additional
Shares of Common Stock or any convertible securities or any warrants,
options or other rights to subscribe for or purchase any Additional
Shares of Common Stock or any convertible securities shall be issued
solely for cash consideration, the consideration received by the
Company therefor shall be deemed to be the amount of cash received by
the Company therefor, or, if such Additional Shares of Common Stock
or convertible securities are offered by the Company for
subscription, the subscription price, or, if such Additional Shares
of Common Stock or convertible securities are sold to underwriters or
dealers for public offering without a subscription offering, the
initial public offering price, in any such case excluding any amounts
paid or receivable for accrued interest or accrued dividends, and
after deductions for any compensation, underwriting discounts,
placement fees or finding or financing commitment fees (but before
deduction for any other expenses) paid or incurred by the Company for
and in the underwriting of, or otherwise in connection with, the
issue thereof. To the extent that such issuance shall be for a
consideration other than solely for cash, then, except as herein
otherwise expressly provided, the amount of such consideration shall
be deemed to be the fair value of such consideration at the time of
such issuance as determined in good faith by the Company's Board of
Directors. The consideration for any Additional Shares of Common
Stock issuable pursuant to any warrants, options or other rights to
subscribe for or purchase the same shall be the consideration
received or receivable by the Company for issuing such warrant,
options or other rights, plus the additional consideration payable to
the Company upon the exercise of such warrants, options or other
rights. The consideration for any Additional Shares of Common Stock
issuable pursuant to the terms of any convertible securities shall be
the consideration received or receivable by the Company for issuing
any warrants, options or other rights to subscribe for or purchase
such convertible securities, plus the consideration paid or payable
to the Company in respect of the subscription for or purchase of such
convertible securities, plus the additional consideration, if any,
payable to the Company upon the exercise of the right of conversion
or exchange in such convertible securities.
(C) When Adjustments to be Made. The adjustments required by the
preceding subsections of this Section 11 shall be made whenever and
as often as any specified event requiring an adjustment shall occur,
except that no adjustment of the Exercise Price that would otherwise
be required shall be made unless and until such adjustment, either by
itself or with other adjustments not previously made, adds or
subtracts at least 1% to the Exercise Price, as determined in good
faith by the Board of Directors of the Company. Any adjustment
representing a change of less than such minimum amount shall be
carried forward and made as soon as such adjustment, together with
other adjustments required by this Section 11 and not previously
made, would result in a minimum adjustment. For the purpose of any
adjustment, any specified event shall be deemed to have occurred at
the close of business on the date of its occurrence. All
calculations made under this Subsection shall be made to the nearest
cent. In computing adjustments under this Section 11, fractional
interests in shares of Common Stock shall be rounded up to the
nearest whole share.
(D) When Adjustment Not Required. If the Company shall take a
record of the holders of its Common Stock for the purpose of
entitling them to receive a dividend or distribution or subscription
or purchase rights and shall, thereafter and before the distribution
thereof to shareholders, legally abandon its plan to pay or deliver
such dividend,, distribution, subscription or purchase rights, then
(i) no adjustment shall be required by reason of the taking of such
record and any such adjustment previously made in respect thereof
shall be rescinded and annulled, or (ii) in the event that any such
adjustment previously made in respect of such taking of record cannot
be rescinded or annulled as a result of the exercise of this Warrant
after the taking of such record occurs, in lieu of such recision or
annulment of the adjustment, the Company shall have the option to
purchase the number of shares of Common Stock from each former holder
of this Warrant who owns shares obtained upon conversion of this
Warrant, equal to the difference between (x) the number of shares of
Common Stock which such former holder had received upon conversion
after such record date, and (y) the number of shares of Common Stock
which such former holder would have received on conversion had such
adjustment been annulled or rescinded prior to conversion. The
purchase price per share of such Common Stock shall be $0.0l per
share.
12. Adjustments for Capital Restructuring. The number and kind of
securities purchasable upon the exercise of this Warrant and the Exercise Price
shall be subject to adjustment from time to time as provided in this paragraph
12. In case the Company shall (i) declare or pay a dividend in shares of Common
Stock or make a distribution in shares of Common Stock to holders of its
outstanding Common Stock, (ii) subdivide its outstanding shares of Common Stock,
(iii) combine its outstanding shares of Common Stock into a smaller number of
shares of Common Stock or (iv) issue any shares of its capital stock in a
reclassification of the Common Stock, then the number of Warrant Shares
purchasable upon exercise of this Warrant immediately prior thereto shall be
adjusted so that the holder of this Warrant shall be entitled to receive the kind
and number of Warrant Shares or other securities of the Company which he would
have owned or have been entitled to receive had such Warrant been exercised in
advance thereof. Upon each such adjustment of the kind and number of Warrant
Shares or other securities of the Company which are purchasable hereunder, the
holder of this Warrant shall thereafter be entitled to purchase the number of
Warrant Shares or other securities resulting from such adjustment at an Exercise
Price per such Warrant Share or other security obtained by multiplying the
Exercise Price in effect immediately prior to such adjustment by the number of
Warrant Shares purchasable pursuant hereto immediately prior to such adjustment
and dividing by the number of Warrant Shares or other securities of the Company
resulting from such adjustment. An adjustment made pursuant to this paragraph 12
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
13. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant, reduce the then current Exercise Price to any
amount and extend the Termination Date for any period of time deemed appropriate
by the Board of Directors of the Company.
14. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, or the Termination Date is
extended as herein provided, the Company shall promptly mail by registered or
certified mail, return receipt requested, to the holder of this Warrant notice of
such adjustment or adjustments setting forth the number of Warrant Shares (and
other securities or property) purchasable upon the exercise of this Warrant and
the Exercise Price of such Warrant Shares (and other securities or property)
after such adjustment, setting forth a brief statement of the facts requiring
such adjustment and setting forth the computation by which such adjustment was
made. Such notice, in absence of manifest error, shall be conclusive evidence of
the correctness of such adjustment.
15. Authorized Shares. The Company covenants that during the period the
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant.
16. Transfer Restrictions Regarding Common Stock Underlying the Warrant.
The certificate or certificates representing the Warrant Shares to be issued upon
exercise of any part or all of this Warrant, shall be subject to the following
legend restricting transfer under the 1933 Act, such legend to be substantially
as follows:
"THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
AGENCY OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("1933 ACT"), AND
ARE RESTRICTED SECURITIES AS THAT TERM IS DEFINED IN RULE 144
UNDER THE 1933 ACT. THESE SECURITIES MAY NOT BE SOLD, PLEDGED,
TRANSFERRED OR ASSIGNED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS, OR IN A TRANSACTION WHICH IS EXEMPT FROM
REGISTRATION UNDER THE PROVISIONS OF THE 1933 ACT AND UNDER
PROVISIONS OF APPLICABLE STATE SECURITIES LAWS."
17. General.
(a) Issue Date; Jurisdiction. The provisions of this Warrant shall
be construed and shall be given effect in all respects as if it had been issued
and delivered by the Company on the date hereof. This Warrant shall be binding
upon any successors or assigns of the Company. This Warrant shall constitute a
contract under the laws of the State of Colorado, without regard to its conflicts
of law principles or rules.
(b) Restrictions. The holder hereof acknowledges that it is
acquiring this Warrant and the Warrant Shares acquired upon the exercise of this
Warrant, for investment purposes and not with a view to engage in a distribution
of this Warrant or the Warrant Shares, and that the Warrant Shares acquired upon
the exercise of this Warrant, if not registered, will have restrictions upon
resale imposed by state and federal securities laws.
(c) Modification and Waiver. This Warrant and any provisions
hereof may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is sought.
(d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the holders hereof by the Company shall be
personally delivered by courier or other service, or shall be sent by certified
or registered mail, postage prepaid, to the Investor or to the Company, at the
addresses set forth above, unless notice of another address is delivered in
accordance with the terms hereof.
(e) Entire Agreement. This Warrant, together with all documents
referenced herein, embody the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof and supersedes all prior
oral or written agreements and understandings relating to the subject matter
hereof. No statement, representation, warranty, covenant or agreement of any
kind not expressly set forth in this Agreement shall affect, or be used to
interpret, change or restrict, the express terms and provisions of this Agreement.
(f) Headings. The headings of this Warrant are inserted for
convenience and identification only, and are in no way intended to describe,
interpret, define or limit the scope, extent or intent hereof.
18. Restricted Period. For a period of one year after the exercise of
any and each portion of this Warrant (the "Restricted Period"), the Warrant
Shares issued to the Investor or its designees or permitted transferees or other
securities that may be or are issued by the Company upon exercise of this
Warrant, including those which may thereafter be issued by the Company in respect
of any such securities by means of any stock splits, stock dividends,
recapitalizations, reclassifications or the like, shall not be sold, pledged,
transferred or assigned by the holder thereof, except to a person to whom this
Warrant could be transferred pursuant to Section 2 hereof, and such transferee
shall remain subject to this Section, and except for sales pursuant to an
effective registration statement not to exceed 200,000 shares per calendar month
and 100,000 shares in five trading days, subject to proportional adjustment for
any stock splits, stock dividends, recapitalizations, reclassifications or the
like. The Warrant Shares or other securities issued hereunder shall contain a
legend evidencing the restrictions provided for in this Subsection.
19. Piggyback Registration Rights.
(a) Right to include Registrable Securities. If at any time after February 18,
2002, the Company proposes to register any of its securities of the same class
under the Securities Act of 1933 (the "Securities Act") on any form for the
registration of securities under such Act, excluding, however, any securities
covered by a post-effective amendment to an existing effective registration
statement, whether or not for its own account (other than by (i) a Registration
Statement on Form S-4 or S-8 or any successor or similar forms, (ii) any
Registration Statement to be used exclusively in the offering and sale of the
Company's securities acquired by any of its or its subsidiaries' employees,
directors or consultantspursuant to any employee compensation, option,
restriction stock or similar plan, arrangement or agreement, (iii) a
Registration Statement filed exclusively in connection with an exchange offer or
an offering of securities solely to the securityholders of the Company, (iv) any
Registration Statement filed exclusively in connection with a rights offering or
(v) a Registration Statement filed pursuant to demand registration rights or as
required in order to complete a then current financing by the Company that
contractually limits selling shareholders to the holders of such rights) (a
"Piggyback Registration"), it shall as expeditiously as possible give written
notice to the holder or holders of this Warrant and, if applicable, the Warrant
Shares (the "Holders") of its intention to do so and of such Holders' rights
under this Section 18. Such rights are referred to hereinafter as "Piggyback
Registration Rights." Upon the written request of any such Holder made within 15
days after receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such Holder, which shall be
no less than 200,000 shares in the aggregate for all Holders), the Company shall
include in the Registration Statement the Registrable Securities which the
Company has been so requested to register by the Holders thereof and the Company
shall keep such registration statement in effect and maintain compliance with
each Federal and state law or regulation for the period necessary for such
Holder to effect the proposed sale or other disposition (but in no event for a
period greater than 90 days). For purposes of this Agreement, the term
"Registrable Securities" shall mean any Warrant Shares issued to the Investor or
its designees or permitted transferees or other securities that may be or are
issued by the Company upon exercise of this Warrant, including those which may
thereafter be issued by the Company in respect of any such securities by means
of any stock splits, stock dividend, recapitalizations, reclassifications or the
like, subject, however, to the Restricted Period; provided, however, that as to
any particular securities contained in the Registrable Securities, such
securities shall cease to be Registrable Securities when (i) a Registration
Statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such Registration Statement; or (ii) they shall have been
sold to the public pursuant to Rule 144 (or any successor provision) under the
Securities Act.
(b) Withdrawal of Piggyback Registration by Company. If, at any time after
giving written notice of its intention to register any securities in a Piggyback
Registration but prior to the effective date of the related Registration
Statement, the Company shall determine for any reason not to register such
securities, the Company shall give notice of such determination to each Holder
and, thereupon, shall be relieved of its obligation to register any Registrable
Securities in connection with such Piggyback Registration. All best efforts
obligations of the Company pursuant to Section 19 shall cease if the Company
determines to terminate prior to such effective date any registration where
Registrable Securities are being registered pursuant to this Section 18.
(c) Piggyback Registration of Underwritten Public Offerings. If a Piggyback
Registration involves an offering by or through underwriters, then (i) all
Holders requesting to have their Registrable Securities included in the Company's
Registration Statement must sell their Registrable Securities to the underwriters
selected by the Company on the same terms and conditions as apply to other
selling shareholders and (ii) any Holder requesting to have his or its
Registrable Securities included in such Registration Statement may elect in
writing, not later than three (3) Business Days prior to the effectiveness of the
Registration Statement filed in connection with such registration, not to have
his or its Registrable Securities so included in connection with such
registration.
(d) Payment of Registration Expenses for Piggyback Registration. The Company
shall pay for all Registration Expenses in connection with each registration of
Registrable Securities requested pursuant to a Piggyback Registration Right
contained in this Section 18. For purposes of this Agreement, the term
"Registration Expenses" shall mean any and all expenses incurred in connection
with any registration or action incident to performance of or compliance by the
Company with Sections 18 or 19 hereof, including, without limitation, (i) all
SEC, national securities exchange and NASD registration and filing fees; (ii)
all listing fees and all transfer agent fees; (iii) all fees and expenses of
complying with state securities or Blue Sky laws (including the fees and
disbursements of counsel of the underwriters in connection with Blue Sky
qualifications of the Registrable Securities); (iv) all printing, mailing,
messenger and delivery expenses; (v) all fees and disbursements of counsel for
the Company and of its accountants, including the expenses of any special audits
or "cold comfort" letters required by or incident to such performance and
compliance; and (vi) any disbursements of underwriters customarily paid by
issuers or sellers of securities, but excluding underwriting discounts and
commissions, brokerage fees, finder fees and transfer taxes, if any, and fees of
counsel or accountants retained by the Holders of Registrable Securities to
advise them in their capacity as Holders of Registrable Securities.
(e) Priority in Piggyback Registration. If a Piggyback Registration involves
an offering by or through underwriters, the Company, except as otherwise provided
herein, shall not be required to include Registrable Shares therein if and to the
extent the underwriter managing the offering reasonably believes in good faith
and advises each Holder requesting to have Registrable Securities included in the
Company's Registration Statement that such inclusion would materially adversely
affect such offering; provided that any reduction or elimination of the
Registrable Securities shall occur (i) first, to the extent necessary to permit
the sale of all of the shares of Common Stock or other securities to be sold by
the Company or the other shareholders with demand registration rights requesting
a registration and (ii) second, pro rata among the Holders of the Registrable
Securities and other persons having "piggy-back" registration rights and, to the
extent consistent therewith, based on the number of shares requested to be
registered by all such shareholders.
20. Demand Registration Rights.
(a) Request for Registration. If, any Holder or Holders
beneficially holding 50% or greater of the Warrant Shares request that the
Company file a registration statement under the Securities Act, as soon as
practicable thereafter the Company shal1 use its best efforts to file a
registration statement with respect to all Warrant Shares that it has been so
requested to include and obtain the effectiveness thereof, and to take all other
action necessary under any Federal or state law or regulation to permit the
Warrant Shares that are held and/or that maybe acquired upon the exercise of the
Warrants specified in the notices of the Holders or Holders hereof to be sold or
otherwise disposed of; and the Company sha11 maintain such compliance with each
such Federal and state law and regulation for the period necessary for such
Holders or Holders to effect the proposed sale or other disposition; provided.
however, the Company shall be entitled, to defer such registration for a period
of up to 45 days if and to the extent that its Board of Directors shall
reasonably determine that such registration would require the disclosure of
material information that the Company has a bona fide business purpose for
preserving as confidential and provided further that the Company shall be so
entitled to defer a registration no more than one time in any 12 calendar month
period. The Company sha11 also promptly give written notice to the Holders and
the Holders of any Warrant Shares that have not made a request to the Company
pursuant to the provisions of this Section 19 of its intention to effect any
required registration or qualification, and shall use its best efforts to effect
as expeditiously as possible such registration or qualification of all such other
Warrant Shares that are then held and/or that may be acquired upon the exercise
of the Warrants, the Holder or Holders of which have requested such registration
or qua1ification within 15 days after such notice has been given by the Company,
as provided in the preceding sentence. The Company sha11 be required to effect a
registration or qualification pursuant to this Section 19 only once in a twelve
month period.
(b) Payment of Registration Expenses for Demand Registration. The
Company shall pay all Registration Expenses in connection with any Demand
Registration.
(c) Selection of Underwriters. If any Demand
Registration is requested to be in the form of an underwritten offering. the
managing underwriter shall be selected and obtained by the Holders of a majority
of the Warrant Shares to be registered. Any fees and expenses (other than
Registration Expenses otherwise required to be paid by the Company) of any
managing underwriter or any co-manager shall be paid for by such underwriters or
by the Holders whose shares are being registered.
(d) Procedure for Requesting Demand Registration. Any request for a
Demand Registration shall specify the aggregate number of the Registrable
Securities proposed to be sold and the intended method of disposition. Within
ten(10) days after receipt of such a request, the Company will give written
notice of such registration request to all Holders, and, subject to the
limitations of Section 20(a), the Company will include in such registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within 15 Business Days after the date on which
such notice is given. Each such request shall also specify the aggregate number
of Registrable Securities to be registered and the intended method of disposition
thereof.
21. Registration Procedures.
(a) Company Obligations. If and whenever the Company is required to
use its best efforts to take action pursuant to any Federal or state law or
regulation to permit the sale or other disposition of any Warrant Shares that are
then held or that may be acquired upon exercise of the Warrants in order to
effect or cause the registration of any Registrable Securities under the
Securities Act as provided in Sections 19 and 20 hereof, the Company shall, as
expeditiously as practicable:
(A) notify the selling Holders of Registrable Securities and the
managing underwriters, if any, promptly, and (if requested by any such
person) confirm such advice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to a Registration Statement or any post-effective
amendment, when the same has become effective; (ii) of any request by
the SEC for amendments or supplements to a Registration Statement or
related Prospectus or for additional information; (iii) of the issuance
by the SEC of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that
purpose; (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any of the
Registrable Securities for the sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, and (vi)
of the happening of any event that makes any statement of a material
fact made in the Registration Statement, the Prospectus or any document
incorporated therein by reference untrue or which requires the making
of any changes in the Registration Statement or Prospectus so that they
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading;
(B) furnish to each selling Holder of Registrable Securities and
each managing underwriter, without charge, at least one signed copy of
the Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, all documents
incorporated therein by reference and all exhibits (including those
incorporated by reference);
(C) deliver to each selling Holder of Registrable Securities and the
underwriters, if any, without charge, as many copies of the Prospectus
or Prospectuses (including each preliminary Prospectus) any amendment
or supplement thereto as such Persons may reasonably request; the
Company consents to the use of such Prospectus or any amendment or
supplement thereto by each of the selling Holders of Registrable
Securities and the underwriters, if any, in connection with the
offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto;
(D) prior to any public offering of Registrable Securities,
cooperate with the selling Holders of Registrable Securities, the
underwriters, if any, and their respective 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 within the United States as any selling Holder or
underwriter reasonably requests in writing, keep each such registration
or qualification effective during the period such Registration
Statement is required to be kept effective and do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; provided that the Company will not be required
to qualify to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject the Company or any
of its subsidiaries to general service of process in any jurisdiction
where it is not at the time so subject;
(E) cooperate with the selling Holders of Registrable Securities and
the managing underwriters, if any, to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be
sold and not bearing any restrictive legends; and enable such
Registrable Securities to be in such denominations and registered in
such names as the managing underwriters may request at least two
Business Days prior to any sale of Registrable Securities to the
underwriters;
(F) 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 within the
United States as may be necessary to enable the seller or sellers
thereof or the underwriters, if any, to consummate the disposition of
such Registrable Securities;
(G) with respect to each issue or class of Registrable Securities,
use its best efforts to cause all Registrable Securities covered by the
Registration Statements to be listed on each securities exchange, if
any, on which similar securities issued by the Company are then listed;
(H) make available for inspection by one or more representatives of
the Holders of Registrable Securities being sold, any underwriter
participating in any disposition pursuant to such registration, and any
attorney or accountant retained by such Holder or underwriter, all
financial and other records, pertinent corporate documents and
properties of the Company, and cause the Company's officers, directors
and employees to supply all information reasonably requested by any
such representatives in connection with such;
(I) enter into such customary agreements, including underwriting
agreements, with customary terms for such agreements, as requested by
the Holders, and take all other action as may be reasonably required in
connection therewith in order to expedite or facilitate the disposition
of Registrable Securities by the Holders thereof; and
(J) otherwise use its best efforts to comply with all applicable
Federal and state regulations; and take such other action as may be
reasonably necessary or advisable to enable each such Holder and each
such underwriter to consummate the sale or disposition in such
jurisdiction or jurisdictions in which any such Holder or underwriter
shall have requested the Registrable Securities be sold.
(b) Seller's Obligation. The Company may require each seller of
Registrable Securities as to which any registration is being effected to furnish
to the Company such information regarding the distribution of such securities and
such other information as may otherwise be required by the Securities Act to be
included in such Registration Statement.
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
an executive officer thereunto duly authorized, to be effective as of the date
first written above.
MEDIX RESOURCES, INC.
By: /s/Xxxx X. Xxxxxxx
--------------------
Xxxx X. Xxxxxxx, President
Accepted and agreed to, as of
February 18, 2002:
PROFESSIONAL CLAIM SERVICES, INC.
d/b/a WELLPOINT PHARMACY MANAGEMENT
By: /s/Xxxxxxx Xxxxxx
-----------------
Xxxxxxx Xxxxxx
General Manager
NOTICE OF EXERCISE
To: MEDIX RESOURCES, INC.
(1) The undersigned hereby elects to purchase ________ shares of Common
Stock, par value $.001 per share (the "Common Stock") of MEDIX RESOURSES, INC.
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.
The undersigned further agrees that it will hold the Warrant Shares subject to
the applicable provisions of the Warrant.
(2) The undersigned represents and warrants that it is purchasing the
shares for it own account, for investment purposes and not with a view to sell
such shares in connection with a distribution of securities, unless such shares
are registered under the Securities Act of 1933, as amended, or an exemption from
such registration is available. The undersigned further acknowledges that such
shares are subject to the Restricted Period as defined in the Warrant.
(3) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below (if the shares are to be issued to a designee, such person must
execute this Notice with the holder of the Warrant):
-------------------------------
(Name)
-------------------------------
(Address)
-------------------------------
Dated:
------------------------------
Signature
