REGISTRATION RIGHTS AGREEMENT
Exhibit
10.8
THIS
REGISTRATION RIGHTS AGREEMENT
(the
“Agreement”)
is
entered into as of September 15, 2005, by and among Equitex,
Inc.,
a
Delaware corporation (the “Company”),
Pandora
Select Partners L.P.,
a
British Virgin Islands limited partnership (“Pandora”),
and
Whitebox
Hedged High Yield Partners L.P.,
a
British Virgin Islands limited partnership ("WHHY").
Pandora and , WHHY are individually referred to herein as an “Investor”
and
together as the “Investors.”
R
E C I T A L S :
WHEREAS,
the
Company, Pandora and WHHY have entered into a Purchase Agreement dated as of
this date (the "Purchase
Agreement"),
pursuant to which Pandora and WHHY are each purchasing a secured convertible
promissory note (each, a "Note"
and
together, the "Notes")
and a
warrant to purchase the Company's Common Stock (each, a "Warrant"
and
together, the "Warrants")
in
consideration of a collective $1,500,000 loan.
WHEREAS,
the
execution of this Agreement is a condition precedent to the obligation of
Pandora and WHHY to perform its respective obligations under the Purchase
Agreement.
NOW,
THEREFORE,
in
consideration of the foregoing and of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:
ARTICLE
1.
DEFINITIONS
As
used
herein, the following terms shall have the following respective
meanings:
1.1 “Commission”
shall
mean the U.S. Securities and Exchange Commission or any other successor federal
agency at the time administering the Securities Act.
1.2 “Common
Stock”
shall
mean the Company’s common stock, $0.01 par value per share.
1.3 “Exchange
Act”
shall
mean the Securities and Exchange Act of 1934, as amended, or any similar federal
statute and the rules and regulations of the Commission thereunder, all as
the
same shall be in effect at the time.
1.4 “Holders”
shall
mean and include each Investor and any transferee thereof to whom the
registration rights conferred by this Agreement have been transferred in
accordance with Article 8 hereof.
1.5 “Register,” “registered”
and
“registration”
refer to
a registration effected by preparing and filing with the Commission a
registration statement in compliance with the Securities Act, and the
declaration or ordering by the Commission of the effectiveness of such
registration statement.
1.6 “Registrable
Securities”
means:
(i) all shares of Common Stock issued or issuable upon exercise of the Warrants
or hereafter acquired by the Investor, (ii) all shares of Common Stock issued
or
issuable upon conversion of the Notes or upon payment on the Notes or hereafter
acquired by the Investor and (iii) any and all shares of Common Stock issuable
upon any stock split, stock dividend, recapitalization, reclassification,
merger, consolidation or other similar event with respect to the Common Stock
issued or issuable pursuant to subsections (i) and (ii) of this Section 1.6;
excluding in all cases, however, Registrable Securities sold by a Holder to
the
public pursuant to a registered offering or pursuant to Rule 144 promulgated
by
the Commission under the Securities Act or sold in a private transaction in
which the Holder’s registration rights under this Agreement are not
assigned.
1.7 “Registration
Expenses”
shall
mean all expenses incurred by the Company in complying with Articles 2 and
3
hereof, including, without limitation, all registration, qualification and
Commission, National Association of Securities Dealers, Inc., stock exchange
and
other filing fees, printing expenses, escrow fees, fees and disbursements of
legal counsel for the Company, blue sky fees and expenses, and the expense
of
any special audits incident to or required by any such registration (but
excluding the compensation of regular employees of the Company, which shall
be
paid in any event by the Company).
1.8 “Securities
Act”
shall
mean the Securities Act of 1933, as amended, or any similar federal statute
and
the rules and regulations of the Commission thereunder, all as the same shall
be
in effect at the time.
1.9 “Selling
Expenses”
shall
mean all underwriting fees, discounts, selling commissions and stock transfer
taxes applicable to the Registrable Securities registered by the Holders and
the
fees and expenses of any special counsel engaged by the Holders.
1.10 “Underwriter”
shall
mean (whether or not the term is capitalized) a broker-dealer engaged by the
Company to distribute Registrable Securities as principal or agent.
1.11 “Underwriting” or
“Underwritten”
shall
mean (whether or not the term is capitalized) a method of publicly distributing
securities through an Underwriter.
ARTICLE
2.
REQUIRED
REGISTRATION
2.1 Required
Registration.
The
Company will (a) prepare and file with the Commission within 90 days after
the
date hereof a registration statement under the Securities Act covering all
of
the Registrable Securities and (b) use its best efforts to obtain the
effectiveness of such registration statement (with respect to the Registrable
Securities) as soon as practicable but not later than 180 days after the date
hereof as would permit or facilitate the resale and distribution of all such
Registrable Securities.
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2.2 Underwriting.
(a) The
resale distribution of the Registrable Securities covered by the registration
statement referred to in Section 2.1 above shall be effected by means of the
method of distribution selected by the Holders holding a majority of the
Registrable Securities covered by such registration. The Holders holding a
majority of the Registrable Securities may also change the resale distribution
method from time to time (subject to amendment of the registration statement
as
required to describe such changes). If such distribution is effected by means
of
an underwriting, the right of any Holder to registration pursuant to this
Article 2 shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Securities in the
underwriting to the extent provided herein.
(b) If
such
distribution is effected by means of an underwriting, the Company (together
with
all Holders proposing to distribute their securities through such underwriting)
shall enter into an underwriting agreement in customary form with a managing
underwriter of nationally recognized standing selected for such underwriting
by
a majority in interest of the Holders and approved by the Company, which
approval shall not be unreasonably withheld.
(c) If
any
Holder disapproves of the terms of the underwriting, such person may elect
to
withdraw therefrom by written notice to the Company, the managing underwriter
and the other Holders. The Registrable Securities and/or other securities so
withdrawn shall also be withdrawn from registration.
2.3 Inclusion
of Shares by the Company.
If the
resale distribution of Registrable Securities is being effected by means of
an
underwriting and if the managing underwriter will not limit the number of
Registrable Securities to be underwritten, the Company may include securities
for its own account or for the account of others in such registration if the
managing underwriter so agrees. The inclusion of such shares shall be on the
same terms as the registration of shares held by the Holders. In the event
that
the underwriters exclude some of the securities to be registered, the securities
to be sold for the account of the Company and any other holders shall be
excluded in their entirety prior to the exclusion of any Registrable
Securities.
ARTICLE
3.
COMPANY
REGISTRATION
3.1 Notice
of Registration to Holders.
If, at
any time after the date hereof, the Company determines to register any of its
securities, either for its own account or the account of a security holder
or
holders, other than (i) a registration relating solely to employee benefit
plans
on Form S-8 (or any successor form) or (ii) a registration relating solely
to a
Commission Rule 145 transaction on Form S-4 (or any successor form), the Company
will:
(a) promptly
give to each Holder written notice thereof and
(b) include
in such registration (and any related qualification under blue sky laws or
other
compliance), and in any underwriting involved therein, all the Registrable
Securities specified in a written request or requests, made within 30 days
after
receipt of such written notice from the Company described in Section 3.1(a),
by
any Holder or Holders, subject to any reductions in the Registrable Securities
to be registered made in the manner set forth in Section 3.2(a).
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3.2 Underwriting.
If the
registration of which the Company gives notice is for an offering involving
an
underwriting, the Company shall so advise the Holders as a part of the written
notice given pursuant to Section 3.1(a). In such event, the right of any Holder
to registration pursuant to this Article 3 shall be conditioned upon such
Holder’s participation in such underwriting and the inclusion of such Holder’s
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting
shall
(together with the Company) enter into an underwriting agreement in customary
form with the managing underwriter selected for such underwriting by the
Company.
(a) Notwithstanding
any other provision of this Article 3, if the managing underwriter determines
that marketing factors require a limitation of the number of shares to be
underwritten, the underwriter may exclude some or all Registrable Securities
from such registration and underwriting. The Company shall so advise all Holders
of Registrable Securities, and the number of shares of Common Stock to be
included in such registration shall be allocated as follows: first, for the
account of the Company, all shares of Common Stock proposed to be sold by the
Company; and second, for the account of the Holders and any other shareholders
of the Company participating in such registration, the number of shares of
Common Stock requested to be included in the registration by the Holders and
such other shareholders in proportion, as nearly as practicable, to the
respective amounts of Registrable Securities that are proposed to be offered
and
sold by the Holders and such other shareholders of Registrable Securities at
the
time of filing the registration statement. No Registrable Securities excluded
from the underwriting in this Article 3 by reason of the underwriters’ marketing
limitation shall be included in such registration.
(b) The
Company shall so advise all Holders and the other holders distributing their
securities through such underwriting of any such limitation, and the number
of
shares of Registrable Securities held by Holders that may be included in the
registration. If any Holder disapproves of the terms of any such underwriting,
such Holder may elect to withdraw therefrom by written notice to the Company
and
the managing underwriter. Any securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration, but the Holder shall
continue to be bound by the terms hereof.
(c) The
Company shall have the right to terminate or withdraw any registration initiated
by it under this Article 3 prior to the effectiveness of such registration,
whether or not a Holder has elected to include Registrable Securities in such
registration.
ARTICLE
4.
EXPENSES
OF REGISTRATION
All
Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Articles 2 and 3 hereof, and the
reasonable fees of one counsel for the Holders of Registrable Securities in
the
case of registration pursuant to Article 2 hereof shall be borne by the Company;
provided, however, that any expenses incurred as a result of any amendment
described in Section 2.2(a) shall be borne by the Holders of the Registrable
Securities being registered in such registration. All Selling Expenses relating
to Registrable Securities registered by the Holders shall be borne by the
Holders of such Registrable Securities pro rata on the basis of the number
of
shares so registered.
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ARTICLE
5.
REGISTRATION
PROCEDURES
5.1 In
the
case of each registration effected by the Company pursuant to this Agreement,
the Company will keep each Holder advised in writing as to the initiation of
each registration and as to the completion thereof. The Company agrees to use
its best efforts to effect or cause such registration to permit the sale of
the
Registrable Securities covered thereby by the Holders thereof in accordance
with
the intended method or methods of distribution thereof described in such
registration statement. In connection with any registration of any Registrable
Securities, the Company shall:
(a) prepare
and file with the Commission a registration statement with respect to such
Registrable Securities and use its best efforts to cause such registration
statement filed to become effective;
(b) maintain
the effectiveness of such registration statement until the earlier of (A) six
years after the date that the registration statement filed pursuant to Section
2.1 is first declared effective by the Commission, (B) the date on which all
of
the Registrable Securities covered by a registration statement may be sold
by
the Holders pursuant to Rule 144(k) or (C) such time as all of the Registrable
Securities have been publicly sold pursuant to a registration
statement;
(c) prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus included therein as may be necessary
to effect and maintain the effectiveness of such registration statement as
may
be required by the applicable rules and regulations of the Commission and the
instructions applicable to the form of such registration statement and furnish
to the Holders of the Registrable Securities covered thereby copies of any
such
supplement or amendment prior to this being used and filed with the
Commission;
(d) promptly
notify the Holders of Registrable Securities to be included in a registration
statement hereunder, the sales or placement agent, if any, therefor and the
managing underwriter of the securities being sold, and confirm such advice
in
writing, (A) when such registration statement or the prospectus included therein
or any prospectus amendment or supplement or post-effective amendment has been
filed, and, with respect to such registration statement or any post-effective
amendment, when the same has become effective, (B) of the issuance by the
Commission of any stop order suspending the effectiveness of such registration
statement or the initiation of any proceedings for that purpose, (C) of the
receipt by the Company of any notification with respect to the suspension of
the
qualification of the Registrable Securities for sale in any jurisdiction or
the
initiation or threatening of any proceeding for such purpose or (D) if, to
the
Company’s knowledge, it shall be the case, at any time when a prospectus is
required to be delivered under the Securities Act, that such registration
statement or prospectus, or any document incorporated by reference in any of
the
foregoing, 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 not misleading in light of the circumstances then existing;
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(e) use
its
best efforts to obtain the withdrawal of any order suspending the effectiveness
of such registration statement or any post-effective amendment thereto or of
any
order suspending or preventing the use of any related prospectus or suspending
the qualification of any Registrable Securities included in such registration
statement for sale in any jurisdiction at the earliest practicable
date;
(f) furnish
to each Holder of Registrable Securities to be included in such registration
statement hereunder, each placement or sales agent, if any, therefor and each
underwriter, if any, thereof a conformed copy of such registration statement,
each such amendment and supplement thereto (in each case excluding all exhibits
and documents incorporated by reference) and such number of copies of the
registration statement (excluding exhibits thereto and documents incorporated
by
reference therein unless specifically so requested by such holder, agent or
underwriter, as the case may be) of the prospectus included in such registration
statement (including each preliminary prospectus and any summary prospectus),
in
conformity with the requirements of the Securities Act, as such Holder, agent,
if any, and underwriter, if any, may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Holder sold by
such
agent or underwritten by such underwriter and to permit such Holder, agent
and
underwriter to satisfy the prospectus delivery requirements of the Securities
Act;
(g) use
its
best efforts to (A) register or qualify the Registrable Securities to be
included in such registration statement under such other securities laws or
blue
sky laws of such states of the United States or the District of Columbia to
be
designated by the Holders of a majority of such Registrable Securities
participating in such registration and each placement or sales agent, if any,
therefor and underwriter, if any, thereof, as any Holder and each underwriter,
if any, of the securities being sold shall reasonably request (provided, that
the Company shall not be required to use its best efforts to register or qualify
the Registrable Securities in more than 15 such jurisdictions unless the
expenses thereof are borne by the Holders requesting such efforts), (B) keep
such registrations or qualifications in effect and comply with such laws at
all
times during the period described in Section 5.1(b) above and (C) take any
and
all such actions as may be reasonably necessary or advisable to enable such
Holder, agent, if any, and underwriter to consummate the disposition in such
jurisdictions of such Registrable Securities; provided, however, that in order
to fulfill the foregoing obligations under this Section 5.1(g), the Company
shall not (unless otherwise required to do so in any jurisdiction) be required
to (1) qualify generally to do business as a foreign company or a broker-dealer,
(2) execute a general consent to service of process or (3) subject itself to
taxation; and
(h) furnish,
at the request of a majority of the Holders participating in the registration,
on the date that such Registrable Securities are delivered to the underwriters
for sale, if such securities are being sold through underwriters, or, if such
securities are not being sold through underwriters, on the date that the
registration statement with respect to such securities becomes effective, (i)
an
opinion, dated as of such date, of the counsel representing the Company for
the
purposes of such registration, in form and substance as is customarily given
to
underwriters in an underwritten public offering and reasonably satisfactory
to a
majority in interest of the Holders requesting registration, addressed to the
underwriters, if any, and to the Holders requesting registration of Registrable
Securities and (ii) a letter dated as of such date, from the independent
certified public accountants of the Company, in form and substance as is
customarily given by independent certified public accountants to underwriters
in
an underwritten public offering and reasonably satisfactory to a majority in
interest of the Holders requesting registration, addressed to the underwriters,
if any, and if permitted by applicable accounting standards, to the Holders
requesting registration of Registrable Securities.
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5.2 The
Company may require each Holder of Registrable Securities as to which any
registration is being effected to furnish to the Company such information
regarding such Holder and such Holder’s method of distribution of such
Registrable Securities as the Company may from time to time reasonably request
in writing. Each such Holder agrees to notify the Company as promptly as
practicable of any inaccuracy or change in information previously furnished
by
such Holder to the Company or of the occurrence of any event in either case
as a
result of which any prospectus relating to such registration contains or would
contain an untrue statement of a material fact regarding such Holder or the
distribution of such Registrable Securities or omits to state any material
fact
regarding such Holder or the distribution of such Registrable Securities
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and promptly to furnish
to the Company any additional information required to correct and update any
previously furnished information or required so that such prospectus shall
not
contain, with respect to such Holder or the distribution of such Registrable
Securities, an untrue statement or a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing.
5.3 Each
of
the Holders will comply with the provisions of the Securities Act with respect
to disposition of the Registrable Securities to be included in any registration
statement filed by the Company.
ARTICLE
6.
INDEMNIFICATION
6.1 The
Company will indemnify each Holder, each of its officers, directors and
partners, and such Holder’s legal counsel and independent accountants, if any,
and each person controlling any such persons within the meaning of Section
15 of
the Securities Act, with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls any underwriter within the meaning of
Section 15 of the Securities Act, against all expenses, claims, losses, damages
and liabilities (or actions in respect thereof), including any of the foregoing
incurred in settlement of any litigation, commenced or threatened, arising
out
of or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement, prospectus, offering circular
or
other document, or any amendment or supplement thereof, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by
the
Company of any rule or regulation promulgated under the Securities Act or any
state securities laws applicable to the Company and relating to action or
inaction by the Company in connection with any such registration, qualification
or compliance, and will reimburse each such Holder, each of its officers,
directors and partners and such Holder’s legal counsel and independent
accountants, and each person controlling any such persons, each such underwriter
and each person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating, preparing or
defending any such claim, loss, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any
such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by such Holder, officers, directors, partners, legal counsel,
accountants, underwriter or controlling persons, and expressly intended for
use
in such registration statement, prospectus, offering circular or other document,
or any amendment or supplement thereof.
-7-
6.2 Each
Holder will, if Registrable Securities held by such Holder are included in
the
securities as to which such registration, qualification or compliance is being
effected, indemnify the Company, each of its directors and officers and its
legal counsel and independent accountants, each underwriter, if any, of the
Company’s securities covered by such a registration statement, each person who
controls the Company or such underwriter within the meaning of Section 15 of
the
Securities Act, and each other such Holder, each of its officers, directors,
partners, legal counsel and independent accountants, if any, and each person
controlling such Holder within the meaning of Section 15 of the Securities
Act,
against all expenses, claims, losses, damages and liabilities (or actions in
respect thereof), including any of the foregoing incurred in settlement of
any
litigation, commenced or threatened, arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
such
registration statement, prospectus, offering circular or other document, or
any
amendment or supplement thereto, incident to any such registration,
qualification or compliance or based on any omission (or alleged omission)
to
state therein a material fact required to be stated therein or necessary to
make
the statements therein not misleading, and will reimburse the Company, such
Holders, such directors, officers, partners, legal counsel, independent
accountants, underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating, preparing or defending
any
such claim, loss, damage, liability or action, in each case to the extent,
but
only to the extent, that such untrue statement (or alleged untrue statement)
or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular, other document or amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Holder and expressly intended for use in such registration
statement, prospectus, offering circular or other document, or any amendment
or
supplement thereof; provided, however, that the obligations of each Holder
hereunder shall be limited to an amount equal to the proceeds to such Holder
of
Registrable Securities sold as contemplated herein.
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6.3 Each
party entitled to indemnification under this Article 6 (the “Indemnified
Party”)
shall
give notice to the party required to provide indemnification (the “Indemnifying
Party”)
promptly after such Indemnified Party has actual knowledge of any claim as
to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom, provided
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or litigation, shall be approved by the Indemnified Party (whose approval
shall not unreasonably be withheld). The Indemnified Party may participate
in
such defense at such party’s expense; provided, however, that the Indemnifying
Party shall bear the expense of such defense of the Indemnified Party if
representation of both parties by the same counsel would be inappropriate due
to
actual or potential conflicts of interest. The failure of any Indemnified Party
to give notice as provided herein shall not relieve the Indemnifying Party
of
its obligations under this Agreement, unless such failure is prejudicial to
the
ability of the Indemnifying Party to defend the action. No Indemnifying Party,
in the defense of any such claim or litigation, shall, except with the consent
of each Indemnified Party, 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.
6.4 If
the
indemnification provided for in Section 6.1 or 6.2 is unavailable or
insufficient to hold harmless an Indemnified Party, then each Indemnifying
Party
shall contribute to the amount paid or payable by such Indemnified Party as
a
result of the expenses, claims, losses, damages or liabilities (or actions
or
proceedings in respect thereof) referred to in Section 6.1 or 6.2, in such
proportion as is appropriate to reflect the relative fault of the Company on
the
one hand and the sellers of Registrable Securities on the other hand in
connection with statements or omissions which resulted in such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) or
expenses, as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
or the sellers of Registrable Securities and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The Company and the Holders agree that it would
not be just and equitable if contributions pursuant to this Section 6.4 were
to
be determined by pro rata allocation (even if all Sellers of Registrable
Securities were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to in the first sentence of this Section 6.4. The amount paid by an
Indemnified Party as a result of the expenses, claims, losses, damages or
liabilities (or actions or proceedings in respect thereof) referred to in the
first sentence of this Section 6.4 shall be deemed to include any legal or
other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any claim, action or proceeding which is the subject
of this Section 6.4. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The obligations of sellers of Registrable Securities to
contribute pursuant to this Section 6.4 shall be several in proportion to the
respective amount of Registrable Securities sold by them pursuant to a
registration statement.
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ARTICLE
7.
RULE
144 REPORTING
With
a
view to making available the benefits of certain rules and regulations of the
Commission which may at any time permit the sale of securities of the Company
to
the public without registration, the Company agrees to use its best efforts
to:
7.1 Make
and
keep public information regarding the Company available as those terms are
understood and defined in Rule 144 under the Securities Act; and
7.2 File
with
the Commission in a timely manner all reports and other documents required
of
the Company under the Securities Act and the Exchange Act after the date
hereof.
ARTICLE
8.
TRANSFER
OF REGISTRATION RIGHTS
The
rights to cause the Company to register Registrable Securities under this
Agreement may be assigned by a Holder to Whitebox Advisors, LLC (“Whitebox
Advisors”)
or to a
transferee or assignee of Registrable Securities that (i) is a subsidiary,
parent or affiliated entity, general partner or limited partner, member or
retired partner or member of a Holder or of Whitebox Advisors, (ii) is an
affiliated fund, a follow-on fund or predecessor fund of a Holder or a related
fund or of Whitebox Advisors, (iii) is a Holder’s family member or trust
for the benefit of an individual Holder or (iv) acquires at least
50,000 shares
of
Registrable Securities (as adjusted for stock splits, stock dividends, stock
combinations, reclassifications, recapitalizations, mergers, consolidations
or
other similar events); provided, however, (A) the transferor shall, within
ten days before such transfer, furnish to the Company written notice of the
name
and address of such transferee or assignee and the securities with respect
to
which such registration rights are being assigned and (B) such transferee
shall agree in writing to be subject to all restrictions set forth in this
Agreement. In each case, such rights may only be transferred together with
the
underlying Registrable Securities in a transfer permitted by the Securities
Act
and applicable state securities laws. Any such transferee or assignee shall
be
deemed a Holder hereunder.
ARTICLE
9.
LIMITATIONS
ON REGISTRATION RIGHTS GRANTED TO OTHER SECURITIES
From
and
after the date of this Agreement, the Company shall not without the prior
written consent of the holders of a majority of the Registrable Securities
then
outstanding, enter into any agreement with any holder or prospective holder
of
any securities of the Company providing for the grant to such holder of
registration rights superior to those granted herein.
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ARTICLE
10.
MISCELLANEOUS
10.1 Governing
Law.
The
laws of the state of Minnesota shall govern the interpretation, validity and
performance of the terms of this agreement, regardless of the law that might
be
applied under principles of conflicts of law.
10.2 Successors
and Assigns.
Except
as otherwise expressly provided herein, the provisions hereof shall inure to
the
benefit of, and be binding upon, the successors, assigns, heirs, executors
and
administrators of the parties hereto.
10.3 Entire
Agreement.
This
Agreement constitutes the full and entire understanding and agreement between
the parties with regard to the subject matter hereof.
10.4 Termination.
The
obligations of the Company to register Registrable Securities under this
Agreement shall terminate on the tenth anniversary of the date of this
Agreement. In addition, the right of any Holder to request inclusion in any
registration under Article 3 shall terminate on the date hereafter when (i)
such
Holder (together with its affiliates, partners, members and former partners
and
members) holds less than 1% of the Company’s outstanding Common Stock and (ii)
all Registrable Securities held by or issuable to such Holder (and its
affiliates, partners, members and former partners and members) upon conversion
of the Note, upon payment on the Note or upon exercise of the Warrant may be
sold under Rule 144 during any 90 day period.
10.5 Notices.
All
notices, requests, consents, and other communications hereunder shall be in
writing and shall be deemed effectively given and received when made if
delivered in person (with written confirmation of receipt) or on the date
received if sent by national overnight courier service (receipt requested)
or
when receipt is acknowledged by the receiving party if delivered by facsimile
or
electronic email, addressed as follows:
| (a) |
if
to the Company, at
|
Equitex,
Inc.
0000
Xxxx
Xxxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxxx 00000
Attention:
Xxxxx Xxxx, President
Facsimile:
(000) 000-0000
Email:
xxxxx@xxxxxxx.xxx
with
a
copy to:
Xxxxxx
Xxxxxxx Xxxxxx & Brand LLP
3300
Xxxxx Fargo Center, 00 Xxxxx 0xx
Xxxxxx
Xxxxxxxxxxx,
Xxxxxxxxx 00000
Attention:
Xxxxxxx X. Xxxxx, Esq.
Facsimile:
(000) 000-0000
Email:
xxxx.xxxxx@xxxxxx.xxx
-11-
| (b) |
if
to the Investors, in care of:
|
Whitebox
Advisors, LLC
0000
Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxx,
Xxxxxxxxx 00000
Attention:
Xxxxxxxx Xxxx, Chief Financial Officer
Facsimile:
(000) 000-0000
Email:
xxxxx@xxxxxxxxxxxxxxxx.xxx
with
a
copy to:
Xxxxxxxx
& Xxxxxx P.A.
000
Xxxxx
Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxx,
Xxxxxxxxx 00000
Attention:
Xxxxxxx X. Xxxxxxx, Esq.
Facsimile:
(000) 000-0000
Email:
xxxxxxxx@xxxxxxxx.xxx
(c) if
to any
other Holder, to the address reflected on the records of the Company, or such
other address or addresses as shall have been furnished in writing by such
party
to the Company and to the other parties to this Agreement.
10.6 Severability.
The
invalidity, illegality or unenforceability of one or more of the provisions
of
this Agreement in any jurisdiction shall not affect the validity, legality
or
enforceability of the remainder of this Agreement in such jurisdiction or the
validity, legality or enforceability of this Agreement, including any such
provision, in any other jurisdiction, it being intended that all rights and
obligations of the parties hereunder shall be enforceable to the fullest extent
permitted by law.
10.7 Titles
and Subtitles.
The
titles of the sections and subsections of this Agreement are for convenience
of
reference only and are not to be considered in construing this
Agreement.
10.8 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
an original, but all of which together constitute one instrument.
[signature
page follows]
-12-
IN
WITNESS WHEREOF,
the
parties hereto have caused this Registration Rights Agreement to be executed
and
delivered as of the date first written above.
| EQUITEX, INC. | ||
| |
|
|
| By: | /s/ Xxxxx Xxxx | |
|
Xxxxx
Xxxx
President
|
||
| PANDORA SELECT PARTNERS L.P. | ||
| |
|
|
| By: | /s/ Xxxxxxxx Xxxx | |
|
Name
Xxxxxxxx
Xxxx
Its
Managing Director
|
||
| WHITEBOX HEDGED HIGH YIELD PARTNERS L.P. | ||
| |
|
|
| By: | /s/ Xxxxxxxx Xxxx | |
|
Name
Xxxxxxxx
Xxxx
Its
Managing Director
|
||
-13-
