Exhibit 4.5
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of this JUNE 11, 2003 by and between Epixtar Corp., a Florida
corporation (the "Company") and the Holders (as set forth in Schedule 1 hereto
to be amended from time to time) of Common Stock, the Series A Stock and
Warrants (as hereinafter defined) (the "Shareholders").
RECITALS:
WHEREAS, in connection with that certain Securities Purchase Agreement
dated as of June 11,2003 between the Company and the Shareholders (the
"Securities Purchase Agreements"), the Company has agreed, upon the terms and
subject to the conditions contained therein, to issue and sell to the
Shareholders, inter alia, Common Shares ("Common Stock") or shares of SeriesA
Convertible Preferred Stock("Series A Stock") and warrants (the "Warrants") to
purchase Common Stock which shares of Common Stock and any other shares of
Common Stock described in Section 1(c) hereof, are sometimes hereinafter
referred to as the "Securities"); and
WHEREAS, the Company desires to grant to the Shareholders certain
registration rights relating to any shares of Common Stock purchased by the
Shareholders pursuant to the Stock Purchase Agreement and the Common Stock
issuable upon conversion of the Series A Stock or exercise of the Warrants (all
of which shares of Common Stock shall be referred to as the "the Securities"
)and the Shareholders desire to obtain such registration rights, subject to the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual premises,
representations, warranties and conditions set forth in this Agreement, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions and References. For purposes of this Agreement, in
addition to the definitions set forth above and elsewhere herein, the following
terms shall have the following meanings:
(a) The term "Commission" or SEC shall mean the United States
Securities and Exchange Commission and any successor agency.
(b) The terms "register," "registered" and "registration" shall
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the 1933 Act (as
herein defined) and the declaration or ordering of effectiveness of
such registration statement or document.
(c) For purposes of this Agreement, the term "Registrable
Securities" shall mean the Securities; provided that for purposes of
this Agreement, any Registrable Securities shall cease to be
Registrable Securities when (w) a registration statement covering such
Registrable Securities has been declared effective and such Registrable
Securities have been disposed of pursuant to such effective
registration statement, (x) such Registrable Securities are eligible to
be sold pursuant to Rule 144(k) (or any similar provision then in
force) under the 1933 Act and counsel to the Company provides an
opinion in form, substance and scope reasonably acceptable to the
Holders that the Registrable Securities are eligible for sale under
Rule 144(k), (y) such Registrable Securities have been otherwise
transferred, and no stop transfer order affecting such Securities is in
effect, and the Company has delivered new certificates or other
evidences of ownership for such Registrable Securities not bearing any
legend indicating that such Securities have not been registered under
the 1933 Act or (z) such Registrable Securities are sold by a person in
a transaction in which the rights under the provisions of this
Agreement are not assigned.
(d) The term "Holder" shall mean the Shareholder or any transferee
or assignee thereof to whom the rights under this Agreement are
assigned in accordance with Section 9 hereof, provided that the
Shareholder or such transferee or assignee shall then own the
Registrable Securities.
(e) The term "1933 Act" shall mean the Securities Act of 1933, as
amended.
(f) The term "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
(g) An "affiliate of such Holder" shall mean a person who controls,
is controlled by or is under common control with such Holder, or the
spouse or children (or a trust exclusively for the benefit of the
spouse and/or children) of such Holder, or, in the case of a Holder
that is a partnership, its partners.
(h) The term "Person" shall mean an individual, corporation,
partnership, trust, limited liability company, unincorporated
organization or association or other entity, including any governmental
entity.
(i) References in this Agreement to any rules, regulations or forms
promulgated by the Commission shall include rules, regulations and
forms succeeding to the functions thereof, whether or not bearing the
same designation.
(j) The term "Purchase Price" shall refer to the purchase price to
acquire Common Stock pursuant to the Warrants.
2. Mandatory Registration.
(a) The Company shall prepare, and, as soon as practicable , but not
later than June 30,2003 file with the SEC a Registration Statement or
Registration Statements (as is necessary) on Form SB2 or such other
appropriate form covering the resale of all of the Registrable
Securities. The initial Registration Statement prepared pursuant hereto
shall register for resale that number of shares of Common Stock shares
equal to the number of Registrable Securities as of the date
immediately preceding the date the Registration Statement is initially
filed with the SEC, subject to adjustment as provided herein. If a
Registration Statement covering the Registrable Securities is not filed
by June 30 2003 (the "Registration Date"), then the current Purchase
Price shall be reduced by ten (10) percent. The Company shall use its
reasonable best efforts to have the Registration Statement declared
effective by the SEC as soon as practicable, but in no event later than
ninety(90) days after the first closing pursuant to the Securities
Agreement (the "Effective Date") after the Registation Date. If the
registration statement is not declared effective on or prior to the
Effective Date then the Purchase Price shall be reduced by an
additional ten (10%) percent If such registration statement is not
effective on or before the 90th day after the Effective Date then the
Purchase Price shall be further reduced by an additional 10% and
thereafter the Purchase Price shall be further reduced by ten (10%)
percent on each 90th day thereafter that the Registration Statement is
not declared effective by the SEC
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3. Obligations of the Company. Whenever required under Section 2 to use
its best efforts to effect the registration of any Registrable Securities, the
Company shall, as expeditiously as possible:
(a) prepare and file with the Commission such amendments and
supplements to such Registration Statement (and any prospectus used in
connection therewith) as may be necessary to keep such Registration
Statement effective for a period of not less than nine months (the
"Registration Period"), and comply with the provisions of the 1933 Act
with respect to the disposition of all Securities covered by such
Registration Statement during such period in accordance with the
intended methods of disposition by the sellers thereof set forth in
such Registration Statement;
(b) furnish to each Holder of Registrable Securities to be included
in the Registration Statement copies of such Registration Statement as
filed and each amendment and supplement thereto, and such other
documents as such Holder may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Holder;
(c) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such
jurisdictions as any selling Holder of Registrable Securities
reasonably requests, and do any and all other acts which may be
reasonably necessary or advisable to enable such Holder to consummate
the disposition in such jurisdictions of the Registrable Securities
owned by such Holder; provided that the Company will not be required to
(i) qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this Section 3(c) hereof,
(ii) subject itself to taxation in any such jurisdiction, or (iii)
consent to general service of process in any such jurisdiction;
(d) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission;
(e) notify each selling Holder, at any time when a prospectus
relating thereto is required to be delivered under the 1933 Act (even
if such time is after the period referred to in Section 3(a)), of the
happening of any event as a result of which the prospectus included in
such Registration Statement contains an untrue statement of a material
fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein in light of the
circumstances being made not misleading, and prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not
contain an 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 in light of the circumstances being made not
misleading;
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(f) use its best efforts to cause all such Registrable Securities to
be listed on any securities exchange or quotation system on which
similar securities issued by the Company are then listed or traded; and
(g) The Company will comply with the reporting requirements of
Sections 13 and 15(d) of the 1934 Act, to the extent it shall be
required to do so pursuant to such sections, and at all times while so
required shall comply with all other public information reporting
requirements of the Commission (including the reporting requirements
which serve as a condition to utilization of Rule 144 promulgated by
the Commission under the 1933 Act) from time to time in effect and
relating to the availability of an exemption from the 1933 Act for the
sale of any of the Registrable Securities held by the Holder. The
Company will also cooperate with the Holder in supplying such
information and documentation as may be necessary for the Holder to
complete and file any information reporting forms presently or
hereafter required by the Commission as a condition to the availability
of an exemption from the 1933 Act for the sale of the Registrable
Securities held by the Holder.
4. Obligations of the Holders.
(a) The Company may require each selling Holder of Registrable
Securities as to which any registration is being effected to furnish to
the Company such information regarding such Holder, such Holder's
beneficial ownership of the Company's securities and the distribution
of such Registrable Securities as the Company may from time to time
reasonably request in writing.
(b) Each Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section
3(e) hereof, such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering
such Registrable Securities until such Holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3(e)
hereof, and, if so directed by the Company, such Holder will deliver to
the Company all copies, other than permanent file copies then in such
Holder's possession, of the prospectus covering such Registrable
Securities current at the time of receipt of such notice. In the event
the Company shall give any such notice, the Company shall extend the
Registration Period by the number of days during the period from and
including the date of the giving of such notice pursuant to Section
3(e) hereof to and including the date when each selling Holder of
Registrable Securities covered by such Registration Statement shall
have received the copies of the supplemented or amended prospectus
contemplated by Section 3(e) hereof. The nine month period that the
Company is required to maintain the effectiveness of such registration
statement shall be extended by the number of days that Holders were
required to discontinue sale of the Securities and if such period
exceeds ninety (90) days then the then Purchase Price shall be reduced
by ten (10%) percent.
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5. Incidental Registration. If the Company determines that it shall
file a registration statement under the 1933 Act (other than a registration
statement on a Form S-4 or S-8 or filed in connection with an exchange offer or
an offering of securities solely to the Company's existing stockholders) on any
form that would also permit the registration of the Registrable Securities and
such filing is to be on its behalf and/or on behalf of selling holders of its
securities for the general registration of its common stock to be sold for cash,
at each such time the Company shall promptly give each Holder written notice of
such determination setting forth the date on which the Company proposes to file
such registration statement, which date shall be no earlier than forty (40) days
from the date of such notice, and advising each Holder of its right to have
Registrable Securities included in such registration. Upon the written request
of any Holder received by the Company no later than twenty (20) days after the
date of the Company's notice, the Company shall use its best efforts to cause to
be registered under the 1933 Act all of the Registrable Securities that each
such Holder has so requested to be registered. If, in the written opinion of the
managing underwriter or underwriters (or, in the case of a non-underwritten
offering, in the written opinion of the placement agent, or if there is none,
the Company), the total amount of such securities to be so registered, including
such Registrable Securities, will exceed the maximum amount of the Company's
securities which can be marketed (i) at a price reasonably related to the then
current market value of such securities, or (ii) without otherwise materially
and adversely affecting the entire offering, then the amount of Registrable
Securities to be offered for the accounts of Holders shall be reduced pro rata
to the extent necessary to reduce the total amount of securities to be included
in such offering to the recommended amount; provided that if securities are
being offered for the account of other Persons as well as the Company, such
reduction shall not represent a greater fraction of the number of securities
intended to be offered by Holders than the fraction of similar reductions
imposed on such other Persons other than the Company over the amount of
securities they intended to offer. The Company shall be obligated to effect and
pay for an unlimited number registrations pursuant to this Section 5; provided,
that a registration requested pursuant to this Section 5 shall not be deemed to
have been effected for purposes of this sentence, unless (i) it has been
declared effective by the Commission, (ii) if it is a shelf registration, it has
remained effective for the period set forth in Section 3(a), and (iii) the
Registrable Securities pursuant to such registration is not subject to any stop
order, injunction or other order or requirement of the Commission (other than
any such action prompted by any act or omission of the Holders).Prior to
effectiveness the Company may withdraw or elect not to file any registration
statement subject to this paragraph 5. Once a registration pursuant to this
Section 5 has been effected as to a Holder, the Company's obligations under this
Section 5 as to such Holder shall terminate. The provisions of paragraph 4 shall
apply to any registration statement filed pursuant to this paragraph 5.
6. Intentionally Omitted.
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7. Expenses of Registration. The Company agrees to pay all expenses
incurred in connection with the registration pursuant to Section 2 or 5 of this
Agreement, including, without limitation, all registration, filing and
qualification fees, word processing, duplicating, printers' and accounting fees
(including the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance), exchange listing fees or
National Association of Securities Dealers fees, messenger and delivery
expenses, all fees and expenses of complying with securities or blue sky laws,
fees and disbursements of counsel for the Company. The Holders of a majority of
the Registrable Securities shall have the right to select one legal counsel to
review and oversee any offering materials pursuant to Section 2 ("Legal
Counsel") and the costs of such legal counsel (not to exceed $7,500) shall be
borne by the Company. The Company shall reasonably cooperate with Legal Counsel
in performing the Company's obligations. The Holders shall bear and pay the
underwriting commissions and discounts and broker commissions applicable to the
Registrable Securities offered for their account in connection with any
registrations, filings and qualifications made pursuant to this Agreement.
8. Indemnification and Contribution.
(a) Indemnification by the Company. The Company agrees to indemnify,
to the full extent permitted by law, each Holder, its officers,
directors and agents and each Person who controls such Holder (within
the meaning of the 1933 Act) against all losses, claims, damages,
liabilities and expenses caused by any untrue or alleged untrue
statement of material fact contained in the Registration Statement,
prospectus or preliminary prospectus or any omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statement therein (in case of a prospectus or
preliminary prospectus, in the light of the circumstances under which
they were made) not misleading.
(b) Indemnification by Holders. In connection with the Registration
Statement in which a Holder is participating, each such Holder will
furnish to the Company in writing such information with respect to such
Holder as the Company reasonably requests for use in connection with
such Registration Statement or prospectus and agrees to indemnify, to
the extent permitted by law, the Company, its directors and officers
and agents and each Person who controls the Company (within the meaning
of the 1933 Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of
material fact or any omission or alleged omission of a material fact
required to be stated in the Registration Statement, prospectus or
preliminary prospectus or any amendment thereof or supplement thereto
or necessary to make the statements therein (in the case of a
prospectus or preliminary 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 was made in reliance
upon and in conformity with any information with respect to such Holder
so furnished in writing by such Holder, provided that a Holder's
indemnity will not exceed proceeds received by Holder from the sale
giving rise to the indemnity payment.
(c) Conduct of Indemnification Proceeding. 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 or
investigation or threat thereof made in writing for which such Person
will claim indemnification or contribution pursuant to this Agreement
and, unless in the reasonable judgment of such indemnified party a
conflict of interest may exist between such indemnified party and the
indemnifying party with respect to such claim, permit the indemnifying
party to assume the defense of such claims with counsel reasonably
satisfactory to such indemnified party. Whether or not such defense is
assumed by the indemnifying party, the indemnifying party will not be
subject to any liability for any settlement made without its consent
(but such consent will not be unreasonably withheld). Failure by such
Person to provide said notice to the indemnifying party shall itself
not create liability except to the extent of any injury caused thereby.
No indemnifying party will 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. If the indemnifying party is not entitled to, or elects not
to, assume the defense of a claim, it will not be obligated to pay the
fees and expenses of more than one (1) counsel with respect to such
claim, unless in the reasonable judgment of any indemnified party a
conflict of interest may exist between such indemnified party and any
other such indemnified parties with respect to such claim, in which
event the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels.
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(d) Contribution. If for any reason the indemnity provided for in
this Section 8 is unavailable to, or is insufficient to hold harmless,
an indemnified party, then the indemnifying party shall contribute to
the amount paid or payable by the indemnified party as a result of such
losses, claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the
indemnifying party on the one hand and the indemnified party on the
other, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, or provides a lesser sum to the
indemnified party than the amount hereinafter calculated, in such
proportion as is appropriate to reflect not only the relative benefits
received by the indemnifying party on the one hand and the indemnified
party on the other but also the relative fault of the indemnifying
party and the indemnified party 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, claims, damages,
liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 8(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 8(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 1933 Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
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If indemnification is available under his Section 8, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
Sections 8(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 8.
9. Transfer of Registration Rights. The registration rights of any
Holder under this Agreement with respect to any Registrable Securities may be
transferred to any transferee of such Registrable Securities; provided that such
transfer may otherwise be effected in accordance with applicable securities
laws; provided further, that such transfer of Registrable Securities is in
accordance with the terms of the Securities Purchase Agreement; provided
further, that the transferring Holder shall give the Company written notice at
or prior to the time of such transfer stating the name and address of the
transferee and identifying the securities with respect to which the rights under
this Agreement are being transferred; provided further, that such transferee
shall agree in writing, in form and substance reasonably satisfactory to the
Company, to be bound as a Holder by the provisions of this Agreement; and
provided further, that such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by such
transferee is restricted under the 1933 Act. Except as set forth in this Section
9, no transfer of Registrable Securities shall cause such Registrable Securities
to lose such status.
10. Miscellaneous.
(a) Successors and Assigns. Except as otherwise expressly provided
herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of
the parties hereto. Nothing in this Agreement, express or implied, is
intended to confer upon any person other than the parties hereto or
their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
(b) Governing Law; Jurisdiction and Venue. This Agreement shall be
governed by and construed under the laws of the State of New York as
applied to agreements entered into and to be performed entirely within
New York. The Company hereby irrevocably consents to the jurisdiction
of the Courts of the State of New York and of any Federal Court located
in New York in connection with any action or proceeding arising out of
or relating to this Agreement. In any such litigation the Company
waives personal service of any summons, complaint or other process and
agrees that the service thereof may be made by certified or registered
mail directed to the Chief Executive Officer of the Company at its
address set forth on the signature pages hereto.
(c) Counterparts/ This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Additional
parties may execute the Agreement in connectional with the execution of
the Securities Purchase Agreement.
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(d) Headings. The headings in this Agreement are used for
convenience
of reference only and are not to be considered in construing or interpreting
this Agreement.
(e) Notices. Any notice required or permitted under this Agreement
shall be given in writing and shall be delivered in person or by
telecopy or by overnight courier guaranteeing no later than second
business day delivery, directed to (i) the Company at the address set
forth below its signature hereof (with a copy, which copy shall not
constitute notice, to Michael DiGiovanna 212 Carnegie Center, Suite
206, Princeton New Jersey 08540.) or (ii) a Holder at the address set
forth below its signature hereof. Any party may change its address for
notice by giving ten (10) days advance written notice to the other
parties. Every notice or other communication hereunder shall be deemed
to have been duly given or served on the date on which personally
delivered, or on the date actually received, if sent by telecopy or
overnight courier service, with receipt acknowledged.
(f) 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 thereby, it being
intended that all of the rights and privileges of the Holders shall be
enforceable to the fullest extent permitted by law.
(g) Entire Agreement. This 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. There are no
restrictions, promises, warranties or undertakings other than those set
forth or referred to herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such
subject matter.
(h) Recitals. The recitals are hereby incorporated in the Agreement
as if fully set forth herein.
(i) Future Registration Rights. Until such time as the Company t
Registrable Securities are registered pursuant to this Agreement, the
Company shall not grant to any third party any registration rights
equal or more favorable than those contained herein; provided, however,
that the foregoing provisions shall not prevent the Company from
granting to a third party specific registration rights that are equal
to those contained herein, as long as all of the registration rights
granted to such third party, taken as whole, are less favorable to
third party than those granted to the Holders herein.The foregoing
shall not apply to registration rights granted to the Laurus group of
mutual funds or any related party.
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IN WITNESS WHEREOF, the parties hereto have executed this Registration
Rights Agreement as of the date first above written.
Epixtar Corp.
By ___________________
Martin Miller
Chairman of the Board
Shareholder
Name __________________________
By ____________________________
____________________________
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SCHEDULE 1
Holders of Series A Common Stock
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