EXHIBIT 99.3
REGISTRATION RIGHTS AGREEMENT
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AGREEMENT dated as of February 12, 2003, between MERCATOR MOMENTUM FUND,
L.P., MERCATOR MOMENTUM FUND III, L.P. and MERCATOR FOCUS FUND, L.P., three
California limited partnerships (the "HOLDERS"), and MEDIABUS NETWORKS, INC., a
Florida corporation (the "COMPANY").
WHEREAS, each Holder has purchased a 6.5% Secured Convertible Debenture
(together, the "DEBENTURES") from the Company and its wholly-owned subsidiary,
Presidion Solutions, Inc., a Florida corporation ("PRESIDION"), and has the
right to cause its Debenture to be converted into shares of Common Stock,
$0.0000303 par value (the "Common Stock"), of the Company, pursuant to the
conversion formula set forth in its Debenture;
WHEREAS, each Holder has purchased a Warrant (together, the "WARRANTS")
from the Company, and the Holders, together, have the right to purchase up to
850,000 shares of the Common Stock through the exercise of the Warrants; and
WHEREAS, the Company desires to grant to the Holders the registration
rights set forth herein with respect to the shares of Common Stock issuable upon
the conversion of the Debentures and the exercise of the Warrants.
NOW, THEREFORE, the parties hereto mutually agree as follows:
1. REGISTRABLE SECURITIES. As used herein the term "Registrable Security"
means each of the shares of Common Stock issued upon the conversion of the
Debentures or the exercise of the Warrants; provided, however, that with respect
to any particular Registrable Security, such security shall cease to be a
Registrable Security when, as of the date of determination that (a) it has been
effectively registered under the Securities Act of 1933, as amended (the
"Securities Act") and disposed of pursuant thereto, or (b) registration under
the Securities Act is no longer required for the immediate public distribution
of such security. The term "Registrable Securities" means any and/or all of the
securities falling within the foregoing definition of a "Registrable Security."
In the event of any merger, reorganization, consolidation, recapitalization or
other change in corporate structure affecting the Common Stock, such adjustment
shall be made in the definition of "Registrable Security" as is appropriate in
order to prevent any dilution or enlargement of the rights granted pursuant to
this Section 1.
2. REGISTRATION.
(a) The Company shall file a registration statement (the
"Registration Statement") with the Securities and Exchange Commission (the
"Commission") within 60 days of the date of this Agreement in order to register
the Registrable Securities for resale under the Securities Act. Once effective,
the Company shall maintain the effectiveness of the Registration Statement until
the earlier of (i) the date that all of the Registrable Securities have been
sold, or (ii) the date that the Company receives an opinion of counsel to the
Company that all of the Registrable Securities may be freely traded without
registration under the Securities Act, under Rule 144 promulgated under the
Securities Act or otherwise.
(b) As the number of shares of Common Stock that can be acquired by
the Holders upon the conversion of the Debentures will vary, from time to time,
based on the market price of the Common Stock, it is not possible to determine
the maximum number of shares of Common Stock that can be acquired by the Holders
through the conversion of the Debentures. Therefore, the Company will initially
include in the Registration Statement that number of shares of Common Stock that
is equal to the sum of 850,000 and 150% of the number of shares of Common Stock
that could be acquired by the Holders upon the full conversion of the Debentures
based on the market price of the Common Stock on the date of this Agreement.
(c) If at any time the number of shares of Common Stock covered by
the Registration Statement is less than the sum of (i) the number of any and all
Registrable Securities held by the Holders, (ii) the number of any and all
Registrable Securities that could be acquired by the Holders through the
exercise of the Warrants, and (iii) 110% of the number of any and all
Registrable Securities that could be acquired by the Holders through the
conversion of the Debentures based on the market price of the Common Stock at
that time, the Company shall register additional shares of Common Stock under
the Securities Act.
(d) Depending on whether the Registration Statement has previously
become effective with the Commission, the Company shall register additional
shares under Section 2(c) either by amending the Registration Statement to
increase the number of shares that it covers or by filing a new registration
statement. Any such new registration statement shall thereafter be deemed part
of the Registration Statement for the purposes of this Agreement.
(e) The number of additional shares of Common Stock registered under
Section 2(d) shall be the number required so that the aggregate number of shares
covered by the Registration Statement equals the sum of (i) the number of any
and all Registrable Securities held by the Holders, (ii) the number of any and
all Registrable Securities that could be acquired by the Holders through the
exercise of the Warrants, and (iii) 150% of the number of any and all
Registrable Securities that could be acquired by the Holders through the
conversion of the Debentures based upon the market price of the Common Stock at
the time of the registration of additional shares.
3. COVENANTS OF THE COMPANY WITH RESPECT TO REGISTRATION.
The Company covenants and agrees as follows:
(a) The Company shall use its best efforts to cause the Registration
Statement to become effective with the Commission as promptly as possible and in
no event more than 120 days after the date of this Agreement. If any stop order
shall be issued by the Commission in connection therewith, the Company shall use
its best reasonable efforts to obtain promptly the removal of such order.
Following the effective date of the Registration Statement, the Company shall,
upon the request of any Holder, forthwith supply such reasonable number of
copies of the Registration Statement, preliminary prospectus and prospectus
meeting the requirements of the Securities Act, and any other documents
necessary or incidental to the public offering of the Registrable Securities, as
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shall be reasonably requested by the Holder to permit the Holder to make a
public distribution of the Holder's Registrable Securities. The obligations of
the Company hereunder with respect to the Holder's Registrable Securities are
subject to the Holder's furnishing to the Company such appropriate information
concerning the Holder, the Holder's Registrable Securities and the terms of the
Holder's offering of such Registrable Securities as the Company may reasonably
request in writing.
(b) The Company shall pay all costs, fees and expenses in connection
with the Registration Statement filed pursuant to Section 2 hereof including,
without limitation, the Company's legal and accounting fees, printing expenses,
and blue sky fees and expenses; provided, however, that each Holder shall be
solely responsible for the fees of any counsel retained by the Holder in
connection with such registration and any transfer taxes or underwriting
discounts, commissions or fees applicable to the Registrable Securities sold by
the Holder pursuant thereto.
(c) The Company will take all necessary action which may be required
to qualify or register the Registrable Securities included in the Registration
Statement for the offer and sale under the securities or blue sky laws of such
states as are reasonably requested by each Holder of such securities, provided
that the Company shall not be obligated to execute or file any general consent
to service of process or to qualify as a foreign corporation to do business
under the laws of any such jurisdiction.
4. ADDITIONAL TERMS.
(a) The Company shall indemnify and hold harmless the Holders and
each underwriter, within the meaning of the Securities Act, who may purchase
from or sell for any Holder, any Registrable Securities, from and against any
and all losses, claims, damages and liabilities caused by any untrue statement
of a material fact contained in the Registration Statement, any other
registration statement filed by the Company under the Securities Act with
respect to the registration of the Registrable Securities, any post-effective
amendment to such registration statements, or any prospectus included therein or
caused by any omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any such
untrue statement or omission based upon information furnished or required to be
furnished in writing to the Company by the Holders or underwriter expressly for
use therein, which indemnification shall include each person, if any, who
controls any Holder or underwriter within the meaning of the Securities Act and
each officer, director, employee and agent of each Holder and underwriter;
provided, however, that the indemnification in this Section 4(a) with respect to
any prospectus shall not inure to the benefit of any Holder or underwriter (or
to the benefit of any person controlling any Holder or underwriter) on account
of any such loss, claim, damage or liability arising from the sale of
Registrable Securities by the Holder or underwriter, if a copy of a subsequent
prospectus correcting the untrue statement or omission in such earlier
prospectus was provided to such Holder or underwriter by the Company prior to
the subject sale and the subsequent prospectus was not delivered or sent by the
Holder or underwriter to the purchaser prior to such sale and provided further,
that the Company shall not be obligated to so indemnify any Holder or any such
underwriter or other person referred to above unless the Holder or underwriter
or other person, as the case may be, shall at the same time indemnify the
Company, its directors, each officer signing the Registration Statement and each
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person, if any, who controls the Company within the meaning of the Securities
Act, from and against any and all losses, claims, damages and liabilities caused
by any untrue statement of a material fact contained in the Registration
Statement, any registration statement or any prospectus required to be filed or
furnished by reason of this Agreement or caused by any omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission based upon
information furnished in writing to the Company by the Holder or underwriter
expressly for use therein.
(b) If for any reason the indemnification provided for in the
preceding section is held by a court of competent jurisdiction to be unavailable
to an indemnified party with respect to any loss, claim, damage, liability or
expense referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by the indemnified party as a result of such loss, claim, damage
or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the indemnified party and the indemnifying party,
but also the relative fault of the indemnified party and the indemnifying party,
as well as any other relevant equitable considerations.
(c) Neither the filing of a Registration Statement by the Company
pursuant to this Agreement nor the making of any request for prospectuses by the
Holder shall impose upon any Holder any obligation to sell the Holder's
Registrable Securities.
(d) Each Holder, upon receipt of notice from the Company that an
event has occurred which requires a Post-Effective Amendment to the Registration
Statement or a supplement to the prospectus included therein, shall promptly
discontinue the sale of Registrable Securities until the Holder receives a copy
of a supplemented or amended prospectus from the Company, which the Company
shall provide as soon as practicable after such notice.
(e) If the Company fails to keep the Registration Statement referred
to above continuously effective during the requisite period, then the Company
shall, promptly upon the request of any Holder, use its best efforts to update
the Registration Statement or file a new registration statement covering the
Registrable Securities remaining unsold, subject to the terms and provisions
hereof.
(f) Each Holder agrees to provide the Company with any information or
undertakings reasonably requested by the Company in order for the Company to
include any appropriate information concerning the Holder in the Registration
Statement or in order to promote compliance by the Company or the Holder with
the Securities Act.
5. GOVERNING LAW. The Registrable Securities will be, if and when issued,
delivered in California. This Agreement shall be deemed to have been made and
delivered in the State of California and shall be governed as to validity,
interpretation, construction, effect and in all other respects by the internal
substantive laws of the State of California, without giving effect to the choice
of law rules thereof.
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6. AMENDMENT. This Agreement may only be amended by a written instrument
executed by the Company and the Holders.
7. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings of the parties, oral and written, with
respect to the subject matter hereof.
8. EXECUTION IN COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
9. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed duly given when delivered by
hand or mailed by registered or certified mail, postage prepaid, return receipt
requested, as follows:
If to the Holders, Mercator Momentum Fund, L.P.
Mercator Focus Fund, L.P.
Mercator Momentum Fund III, L.P.
555 South Flower Street, Suite 4500
Los Angeles, CA 90071
Attention: Andy Dube
If to the Company, MediaBus Networks, Inc.
753 W. Big Beaver, Suite 1700
Troy, Michigan 48084
Attention: James E. Baiers
10. BINDING EFFECT; BENEFITS. Any Holder may assign its rights hereunder.
This Agreement shall inure to the benefit of, and be binding upon, the parties
hereto and their respective heirs, legal representatives, successors and
assigns. Nothing herein contained, express or implied, is intended to confer
upon any person other than the parties hereto and their respective heirs, legal
representatives and successors, any rights or remedies under or by reason of
this Agreement.
11. HEADINGS. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
12. SEVERABILITY. Any provision of this Agreement which is held by a court
of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.
MEDIABUS NETWORKS, INC.
By: /s/ James E. Baiers
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Name: James E. Baiers
Its: Executive Vice President/General
Counsel
HOLDERS:
MERCATOR MOMENTUM FUND, L.P.
By: /s/ David Firestone
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Name: David Firestone
Its: Managing Partner
MERCATOR MOMENTUM FUND III, L.P.
By: /s/ David Firestone
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Name: David Firestone
Its: Managing Partner
MERCATOR FOCUS FUND, L.P.
By: /s/ David Firestone
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Name: David Firestone
Its: Managing Partner
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