Exhibit 10.20
REGISTRATION RIGHTS AGREEMENT
DATED AS OF NOVEMBER 5, 1999
BY AND BETWEEN
MED-EMERG INTERNATIONAL, INC.
AND
XXXXX E-COMMERCE CORP.
This Registration Rights Agreement (this "Agreement") is made and
entered into as of November 5, 1999, by and between MED-EMERG INTERNATIONAL,
INC. a corporation organized and existing under and by virtue of the laws of
Ontario, Canada (the "Company"), and XXXXX E-COMMERCE CORP., a corporation
organized and existing under and by virtue of the laws of the State of Delaware
(the "Investor").
This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of November 5, 1999, by and among the Company and the Investor (the
"Securities Agreement"). The Company has agreed to provide the Investor the
registration rights with respect to the Registerable Securities, as defined and
set forth in this Agreement. The execution and delivery of this Agreement is a
condition to the provision of the Services by Investor under the terms of that
certain Web Design and Consulting Agreement, dated the date hereof, by and
between the Company and the Investor. Unless otherwise separately defined
herein, all capitalized terms used in this Agreement shall have the meanings
ascribed to them as set forth in the Securities Purchase Agreement, of even date
hereof, by and between the Company and the Investor (the "Securities Purchase
Agreement").
The parties hereby agree as follows:
1. SECURITIES SUBJECT TO THIS AGREEMENT
(a) DEFINITIONS. The term "Registerable Securities" means the Shares as
defined in the Securities Purchase Agreement. The term "1933 Act" means the
securities Act of 1933, as amended. The term "1934 Act" means the Securities
Exchange Act of 1934, as amended. The terms "register", "registered", and
"registration" refer to a registration effected by preparing and filing a
registration statement or similar document in compliance with the 1933 Act, and
the declaration or ordering of effectiveness of such registration statement or
document.
(b) RESTRICTED SECURITIES. The Shares are "restricted securities", as
that term is defined in Rule 144 promulgated under the 1933 Act (the "Restricted
Securities"). For the purposes of this Agreement, any Registerable Security will
cease to be a Restricted Security when (i) a registration statement covering
such Restricted Security has been declared effective by the United States
Securities and Exchange Commission (the "Commission"), and the Restricted
Security has been disposed of pursuant to such effective registration statement;
(ii) it can be distributed to the public pursuant to Rule 144(k) (or any similar
provision then in force) under the 1933 Act; or (iii) it is exchanged (without
additional cost, expense or tax liability to the Investor) for an identical or
substantially identical security which is or has been registered under the 1933
Act or may be sold and disposed of without an effective registration statement
under the 1933 Act.
(c) REGISTERABLE SECURITIES. As to any particular Registerable
Security, such security will cease to be a Registerable Security when it ceases
to be a Restricted Security.
(d) HOLDERS OF REGISTERABLE SECURITIES. A Person is deemed to be a
holder of Registerable Securities whenever such Person owns Registerable
Securities or has a right to acquire such Registerable Securities, whether or
not such acquisition has actually been effected; PROVIDED, that in no event will
any Registerable Security be deemed to be owned by more than one Person.
(e) STOCK SPLITS, DIVIDENDS, ETC. The provisions of this Agreement
shall apply to any shares or other securities resulting from any stock split or
reverse split, stock dividend, reclassification of the capital stock of the
Company, consolidation or reorganization of the Company, and any shares or other
securities of the Company or of any successor company which may be received by
the Investor by virtue of its ownership of Registerable Securities.
2. REQUIRED REGISTRATION
(a) DEMAND REGISTRATION. (i) If the Company is then eligible to file
with the SEC a registration statement on Form S-3, the Company agrees to file
within 30 days of the written request of Investor, and (ii) if the Company is
not then eligible to file with the SEC a registration statement on Form S-3 the
Company agrees to file within 60 days of the written request of Investor, one
"shelf" registration statement on any appropriate form pursuant to Rule 415
under the 1933 Act and/or any similar rule that may be adopted by the SEC with
respect to the Registerable Securities (the "Shelf Registration"). The Company
agrees to use its best efforts to have the Shelf Registration declared effective
as soon as reasonably practicable after such filing, and to keep the Shelf
Registration continuously effective (x) for a period of three (3) years in the
case of subprovision (i) above and (y) for a period of nine (9) months in the
case of subprovision (ii) above, in either case with respect to the Shares (or,
if for any reason the effectiveness of the Shelf Registration is suspended, such
period shall be extended by the aggregate number of days of each such
suspension), following the date on which the Shelf Registration is declared
effective; PROVIDED, HOWEVER, that the effectiveness of the Shelf Registration
may be terminated earlier with respect to any issue of securities if and to the
extent that none of the securities of such issue registered therein are
Restricted Securities or are outstanding.
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The Company further agrees if necessary, to supplement or
amend any Shelf Registration, as required by the registration form utilized by
the Company or by the instructions applicable to such registration form or by
the 1933 Act or the rules and regulations thereunder, and the Company agrees to
furnish to the holders of Registerable Securities copies of any such supplement
or amendment prior to its being used and/or filed with the SEC. The Company
agrees to pay all of its Registration Expenses (as hereinafter defined) in
connection with the Shelf Registration, whether or not it becomes effective.
The holders of the Registerable Securities to be registered
shall pay, PRO RATA, all underwriting discounts and commissions or placement
fees of any investment banker or bankers and/or manager or managers used in
connection with the sale of their Registerable Securities pursuant to the
Registration Statement.
(b) PIGGY-BACK REGISTRATION
(i) In the event that the Company proposes to register any
shares of its common stock (the "Common Stock"), under the 1933 Act, other than
(i) pursuant to a registration statement on Forms S-4 or S-8 or any successor to
such Forms and (ii) other than pursuant to Section 2(a) above, for the purpose
of the sale of Common Stock by the Company for its own account, or of Common
Stock owned by any present or future holder of Common Stock, or any other
obligation of the Company to register securities on Form X-0, X-0 or S-3, or any
successor to such Forms, the Company shall mail or deliver to all holders of
Registerable Securities, at least 10 days prior to the filing with the SEC of
the registration statement covering such Common Stock, a written notice (a
"Registration Notice") of its intention so to register such Common Stock.
(ii) In the event that a Registration Notice shall have been
so mailed or delivered, each holder of Registerable Securities may elect to
include in such registration statement such percentage of its Registerable
Securities as equals the percentage derived by adding all of the shares of
Common Stock registered on behalf of each of the holders on whose behalf such
registration statement is being filed (excluding the holders of Registerable
Securities) and dividing such number by the total number of shares of Common
Stock owned by such holders (excluding the holders of Registerable Securities).
To the extent that a holder of Registerable Securities chooses to include such
Registerable Securities as it is entitled to include pursuant to the preceding
sentence such holder shall mail or deliver to the Company, a written notice (a
"Supplemental Notice") (A) specifying the number of shares of Registerable
Securities proposed to be sold or otherwise transferred by such holder, (B)
describing the proposed manner of sale or other transfer thereof under the
Securities Act; PROVIDED, HOWEVER, that such Supplemental Notice shall be so
mailed or delivered by such holder not more than 5 days after the date of
delivery to such holder of a Registration Notice.
3. HOLDBACK AGREEMENT; RESTRICTIONS ON PUBLIC SALE BY HOLDERS OF REGISTERABLE
SECURITIES.
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In connection with the piggyback registration statement referred to in
Section 2 above, to the extent not inconsistent with applicable law, each holder
of Registerable Securities whose securities are included in such registration
statement agrees not to effect any public sale or distribution of the issue
being registered or a similar security of the Company or any securities
convertible into or exchangeable or exercisable for such securities, including a
sale pursuant to Rule 144 under the Act, during the 14 Business Days prior to,
and for such period of time following the effective date not to exceed a 9-month
period as the Company or any managing underwriter of an offering of securities
subject to such piggyback registration may specify, if and to the extent timely
notified of such restriction in writing by the Company, in the case of a
non-underwritten public offering, or by the managing underwriter or
underwriters, in the case of an underwritten public offering, and the Company or
such underwriter(s) provide a written opinion to the effect that earlier sale of
the Registerable Securities would materially, adversely affect the Company's
primary offering of securities.
4. REGISTRATION EXPENSES
Subject to the limitation on expenses provided in Section 2, all
expenses incident to the Company's performance of or compliance with this
Agreement, including, without limitation, all registration and filing fees, all
fees and expenses associated with filings required to be made with the National
Association of Securities Dealers, Inc. ("NASD") and/or The NASDAQ Stock Market
("NASDAQ"), as may be required by the rules and regulations of the NASD or
NASDAQ, fees and expenses of compliance with securities or blue sky laws
(including fees and disbursements of counsel in connection with blue sky
qualifications of the Registerable Securities), rating agency fees, printing
expenses (including expenses of printing certificates for the Registerable
Securities in a form eligible for deposit with the Depositary Trust Company and
of printing prospectuses if the printing of prospectuses is requested by a
holder of Registerable Securities), messenger and delivery expenses, internal
expenses (including, without limitation, all, salaries and expenses of their
officers and employees performing legal or accounting duties), fees and expenses
of counsel for the Company and its independent certified public accountants
(including the expenses of any special audit or "cold comfort" letters required
by or incident to such performance), securities acts liability insurance (if the
Company elects to obtain such insurance), fees and expenses of other Persons
retained by the Company (all such expenses being herein called "Registration
Expenses") will be borne by the Company; PROVIDED that in no event shall
Registration Expenses include any underwriting discounts, commissions or fees
attributable to the sale of the Registerable Securities.
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5. FURTHER OBLIGATIONS OF THE COMPANY
(a) The Company shall, as soon as reasonably possible, use its best
efforts to register and qualify the Registrable Securities covered by any
registration statement described herein under such other securities or "blue
sky" laws of such jurisdictions as shall be reasonably requested by the
Investor, provided that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business or to file a
general consent to service of process in any such states or jurisdictions unless
the Company is already subject to such service in such jurisdiction and except
as may be required by the 0000 Xxx.
(b) The Company shall as soon, as reasonably possible, furnish to the
Investor (or one broker or agent designated by the Investor) such numbers of
copies of a prospectus in conformity with the requirement of the 1933 Act, and
such other documents as the Investor may reasonably request in order to
facilitate the resale or other disposition of the Registerable Securities owned
by them.
(c) Prior to filing any registration statement pursuant to this
Agreement, the Company shall provide a draft of the registration statement to
the Investor and its counsel within 10 days prior to filing, and the Company
shall use commercially reasonable efforts to include the comments of the
Investor and its counsel in the registration statement.
6. INDEMNIFICATION: CONTRIBUTION
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
each holder of Registerable Securities, its general partners, general partners
of the general partner, limited partners, officers, directors, employees and
agents and each Person who controls such holder (within the meaning of the 1933
Act), against all losses, damages, liabilities (joint or several) and expenses
(including reasonable costs of investigation and legal expenses) arising out of
or based upon any untrue or alleged untrue statement of a material fact
contained in any registration statement, prospectus or preliminary prospectus,
or any amendment or supplement thereto, or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein (in the case of a prospectus or preliminary prospectus,
in light of the circumstances under which they are made) not misleading, except
insofar as the same are contained in any information with respect to such holder
furnished in writing to the Company by such holder expressly for use therein or
any violation by the Company of the 1933 Act, 1934 Act, or the rules promulgated
thereunder that does not result from conduct by the Persons indemnifiable by the
Company under this Section 6(a). The Company also agrees to reimburse each such
holder and each such officer, director, partner and controlling Person for any
legal or other expenses reasonably incurred by such holder or such officer,
director, partner or controlling person in connection with investigating or
defending any such loss, damage, liability or action to the extent that the same
are not incurred in connection with the proviso of the preceding sentence.
(b) INDEMNIFICATION BY HOLDERS OF REGISTERABLE SECURITIES. In
connection with any registration statement in which a holder of Registerable
Securities is participating, each such holder will furnish to the Company in
writing, such information and affidavits with respect to
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such holder as the Company reasonably requests for use in connection with any
such registration statement or prospectus and agrees to indemnify, to the extent
permitted by law, the Company, the directors, officers, employees and agents and
each Person who controls the Company (within the meaning of the Act), and any
investment advisor thereof or agent therefor against any losses, damages,
liabilities and expenses resulting from any untrue statement of a material fact
or any omission of a material fact required to be stated in the registration
statement or prospectus or any amendment thereof or supplement thereto or
necessary to make the statements therein (in the case of a prospectus, in the
light of the circumstances under which they were made) not misleading, to the
extent, but only to the extent, that such untrue statement or omission is
contained in or failed to be contained in any information or affidavit with
respect to such holder so furnished in writing by such holder specifically for
inclusion therein or resulting from the violation of applicable securities laws
by such holder or its agents in connection with the sale of the Registerable
Securities.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any person entitled to
indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the receipt by such person of any written notice of the
commencement of any action, suit, proceeding against such person or
investigation thereof made in writing for which such person will claim
indemnification or contribution pursuant to this Agreement and, unless in the
reasonable judgment of counsel to such indemnified party a conflict of interest
may exist between such indemnified party and the indemnifying party with respect
to such claim which would not permit the same counsel to represent the
indemnifying and indemnified parties, permit the indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to such
indemnified party. If the indemnifying party is not entitled to, or elects not
to, assume the defense of a claim (including as the result of a conflict of
interest which, in the reasonable judgment of counsel to such indemnified party,
does not permit the same counsel to represent the indemnified and indemnifying
parties), it will not be obligated to pay the fees and expenses of more than one
counsel with respect to such claim other than counsel to the indemnifying party.
No indemnifying party will be required to consent to entry of any judgment or
enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect of such claim or litigation. The
indemnifying party will not be subject to any liability for any settlement made
without its consent. The failure of any indemnified party to give such notice as
provided herein shall not relieve the indemnifying party of its obligations
under this Agreement unless, and only to the extent that, the failure of the
indemnified party to give such notice is (i) deliberate and wilful and (ii)
results in actual harm to the indemnifying party.
(d) CONTRIBUTION. If the indemnification provided for in this Section 6
from the indemnifying party is unavailable to an indemnified party hereunder in
respect of any losses, damages, liabilities or expenses referred to therein by
reason other than that set forth in the exception in the first sentence of
Section 6(a) hereof and Section 6(b) hereof, 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, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties in connection
with the actions or inactions which resulted in such
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losses, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, damages, liabilities and
expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section 6(c), any legal or other fees or expenses
reasonably incurred by such party in connection with any investigation or
proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6(d) 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 the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
If indemnification is available under this Section 6, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Sections 6(a) and (b) without regard to the relative fault of said
indemnifying party or indemnified party or any other equitable consideration
provided for in this Section 6(d).
In the event that any provision of an indemnification clause
in an underwriting agreement executed by or on behalf of a holder of
Registerable Securities differs from a provision in this Section 6, such
provision in the underwriting agreement shall determine such holder's rights in
respect thereof.
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS.
The Investor may not participate in any underwritten registration with
respect to the Registerable Securities unless it (a) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements (including applicable "lock-up" arrangements described in Section 3
of this Agreement) and (b) agrees to pay its pro rata portion of all
underwriting discounts, commissions and fees.
8. RULE 144
The Company covenants that it will file the reports required to be filed by
it under the 1933 Act and the 1934 Act and the rules and regulations adopted by
the SEC thereunder (or, if it is not required to file such reports, it will make
publicly available such information including information required by Rule
15c2-11 promulgated under the 1934 Act as will enable the holders of
Registerable Securities to sell any Registerable Securities held by them without
registration as described in this Section 8); and it will take such further
action as any holder of Registerable
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Securities may reasonably request, all to the extent required from time to time
to enable such holder to sell Registerable Securities without registration under
the 1933 Act within the limitation of the exemptions provided by (a) Rule 144
under the 1933 Act, as such Rule may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the SEC. Upon the reasonable
request of any holder of Registerable Securities, the Company will deliver to
such holder a written statement as to filings made by the Company with the SEC.
9. MISCELLANEOUS
(a) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
unless the Company has obtained the written consent of holders of at least a
majority of the then outstanding Registerable Securities affected by such
amendment, modification, supplement, waiver or departure.
(b) NOTICES. All notices and other communications provided for or permitted
hereunder shall be made by hand delivery, facsimile (with confirmation back),
nationally recognized overnight courier, or registered first-class mail:
(i) if to a holder of Registerable Securities, at the most current
address, and with a copy to be sent to each additional address given by such
holder to the Company, in writing, with a copy to such holder's counsel, which
current information is as follows:
With a copy to:
Xxxxx E-Commerce Corp.
0 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx, President
With a copy to:
Xxxxx Xxxxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telephone #: 000-000-0000
Facsimile: 000-000-0000
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if to the Company at:
Med-Emerg International, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxxxxxx Xxxxxx
Telephone #: (000) 000-0000
Facsimile #: (000) 000-0000
With a copy to:
Xxxxxxx Savage & Xxxxxxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone #: (000) 000-0000
Facsimile #: (000) 000-0000
All such notices and communications shall be deemed to have been duly
given when delivered by hand, if personally delivered, upon receipt if delivered
by facsimile, one-day after delivery to overnight courier priority delivery, or
five Business Days after being deposited in the mail, postage prepaid, if
mailed.
(c) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of each of the parties hereto.
(d) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(e) HEADINGS. The headings in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.
(f) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly within that jurisdiction. The parties hereto agree to
submit to the jurisdiction of the courts of the State of New York in any action
or proceeding arising out of or relating to this Agreement.
(g) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
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thereby, it being intended that all of the rights and privileges of the holders
of Registerable Securities shall be enforceable to the fullest extent permitted
by law.
(h) ENTIRE AGREEMENT. This Agreement, together with the Purchase Agreement
the Warrant and the Settlement Agreement, is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein and therein. This Agreement and the Purchase Agreement (including the
exhibits and schedules thereto) supersede all prior agreements, negotiations,
and understandings between the parties with respect to such subject matter.
(i) ATTORNEYS' FEES. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is successfully
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees in addition to any other available remedy.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
MED-EMERG INTERNATIONAL, INC.
By:/s/Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
Title: Chief Executive Officer and President
THE INVESTOR:
XXXXX E-COMMERCE CORP.
By:/s/Xxxxxxxxx Xxxxxxxx
-----------------------------
Name: Xxxxxxxxx Xxxxxxxx
Title: Executive Vice President
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