EXECUTION VERSION
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of February 27, 2004, by and between PIPELINE DATA INC., a Delaware
corporation (the "Company"), and Laurus Master Fund, Ltd. (the "Purchaser").
This Agreement is made pursuant to the Securities Purchase Agreement,
dated as of the date hereof, by and between the Purchaser and the Company (the
"Securities Purchase Agreement"), and pursuant to the Note and the Warrants
referred to therein.
The Company and the Purchaser hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Securities Purchase Agreement shall have the meanings
given such terms in the Securities Purchase Agreement. As used in this
Agreement, the following terms shall have the following meanings:
"Commission" means the Securities and Exchange Commission.
"Common Stock" means shares of the Company's common stock, par value $0.001
per share.
"Effectiveness Date" means the 120th day following the date hereof.
"Effectiveness Period" shall have the meaning set forth in Section 2(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
any successor statute.
"Filing Date" means, with respect to the Registration Statement required to
be filed hereunder, a date no later than thirty (30) days following the
date upon which the principal amount of the Term Loan to the Company in
original principal amount of $2,000,000 has been funded to the Company.
"Holder" or "Holders" means the Purchaser or any of its affiliates or
transferees to the extent any of them hold Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section 5(c).
"Indemnifying Party" shall have the meaning set forth in Section 5(c).
"Note" has the meaning set forth in the Securities Purchase Agreement.
"Proceeding" means an action, claim, suit, investigation or proceeding
(including, without limitation, an investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in the Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by the Registration Statement, and all other amendments
and supplements to the Prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
"Registrable Securities" means the shares of Common Stock issued upon the
conversion of the Note and issuable upon exercise of the Warrants.
"Registration Statement" means each registration statement required to be
filed hereunder, including the Prospectus, amendments and supplements to
such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto, and all material
incorporated by reference or deemed to be incorporated by reference in such
registration statement.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 415" means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Rule 424" means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
"Securities Act" means the Securities Act of 1933, as amended, and any
successor statute.
"Securities Purchase Agreement" means the agreement between the parties
hereto calling for the issuance by the Company of up to $2,000,000 of
convertible Notes plus Warrants.
"Trading Market" means any of the NASD OTC Bulletin Board, NASDAQ SmallCap
Market, the Nasdaq National Market, the American Stock Exchange or the New
York Stock Exchange.
"Warrants" means the Common Stock purchase warrants issued pursuant to the
Securities Purchase Agreement.
2. Registration.
(a) On or prior to the Filing Date the Company shall prepare and file with
the Commission a Registration Statement covering the Registrable
Securities for an offering to be made on a continuous basis pursuant
to Rule 415. The Registration Statement shall be on Form SB-2 or Form
S-3 (except if the Company is not then eligible to register for resale
the Registrable Securities on Form SB-2 or Form S-3, in which case
such registration shall be on another appropriate form in accordance
herewith). The Company shall cause the Registration Statement to
become effective and remain effective as provided herein. The Company
shall use its reasonable commercial efforts to cause the Registration
Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event no
later than the Effectiveness Date. The Company shall use its
reasonable commercial efforts to keep the Registration Statement
continuously effective under the Securities Act until the date which
is the earlier date of when (i) all Registrable Securities have been
sold or (ii) all Registrable Securities may be sold immediately
without registration under the Securities Act and without volume
restrictions pursuant to Rule 144(k), as determined by the counsel to
the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Company's transfer agent and the
affected Holders (the "Effectiveness Period").
(b) If: (i) the Registration Statement is not filed on or prior to the
Filing Date; (ii) the Registration Statement is not declared effective
by the Commission by the Effectiveness Date; (iii) after the
Registration Statement is filed with and declared effective by the
Commission, the Registration Statement ceases to be effective (by
suspension or otherwise) as to all Registrable Securities to which it
is required to relate at any time prior to the expiration of the
Effectiveness Period (without being succeeded immediately by an
additional registration statement filed and declared effective) for a
period of time which shall exceed 30 days in the aggregate per year or
more than 20 consecutive calendar days (defined as a period of 365
days commencing on the date the Registration Statement is declared
effective); or (iv) the Common Stock is not listed or quoted, or is
suspended from trading on any Trading Market for a period of three (3)
consecutive Trading Days (provided the Company shall not have been
able to cure such trading suspension within 30 days of the notice
thereof or list the Common Stock on another Trading Market); (any such
failure or breach being referred to as an "Event," and for purposes of
clause (i) or (ii) the date on which such Event occurs, or for
purposes of clause (iii) the date which such 30 day or 20 consecutive
day period (as the case may be) is exceeded, or for purposes of clause
(iv) the date on which such three (3) Trading Day period is exceeded,
being referred to as "Event Date"), then until the applicable Event is
cured, the Company shall pay to each Holder an amount in cash, as
liquidated damages and not as a penalty, equal to 1.0% for each thirty
(30) day period (prorated for partial periods) on a daily basis of the
original principal amount of the Note. While such Event continues,
such liquidated damages shall be paid not less often than each thirty
(30) days. Any unpaid liquidated damages as of the date when an Event
has been cured by the Company shall be paid within three (3) days
following the date on which such Event has been cured by the Company.
(c) Within three business days of the Effectiveness Date, the Company
shall cause its counsel to issue a blanket opinion in the form
attached hereto as Exhibit A, to the transfer agent stating that the
shares are subject to an effective registration statement and can be
reissued free of restrictive legend upon notice of a sale by Laurus
and confirmation by Laurus that it has complied with the prospectus
delivery requirements, provided that the Company has not advised the
transfer agent orally or in writing that the opinion has been
withdrawn. Copies of the blanket opinion required by this Section 2(c)
shall be delivered to Laurus within the time frame set forth above.
3. Registration Procedures. If and whenever the Company is required by the
provisions hereof to effect the registration of any Registrable Securities under
the Securities Act, the Company will, as expeditiously as possible:
(a) prepare and file with the Commission the Registration Statement with
respect to such Registrable Securities, respond as promptly as
possible to any comments received from the Commission, and use its
best efforts to cause the Registration Statement to become and remain
effective for the Effectiveness Period with respect thereto, and
promptly provide to the Purchaser copies of all filings and Commission
letters of comment relating thereto;
(b) prepare and file with the Commission such amendments and supplements
to the Registration Statement and the Prospectus used in connection
therewith as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Securities covered by the Registration Statement and to keep such
Registration Statement effective until the expiration of the
Effectiveness Period;
(c) furnish to the Purchaser such number of copies of the Registration
Statement and the Prospectus included therein (including each
preliminary Prospectus) as the Purchaser reasonably may request to
facilitate the public sale or disposition of the Registrable
Securities covered by the Registration Statement;
(d) use its commercially reasonable efforts to register or qualify the
Purchaser's Registrable Securities covered by the Registration
Statement under the securities or "blue sky" laws of such
jurisdictions within the United States as the Purchaser may reasonably
request, provided, however, that the Company shall not for any such
purpose be required to qualify generally to transact business as a
foreign corporation in any jurisdiction where it is not so qualified
or to consent to general service of process in any such jurisdiction;
(e) list the Registrable Securities covered by the Registration Statement
with any securities exchange on which the Common Stock of the Company
is then listed;
(f) immediately notify the Purchaser at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act,
of the happening of any event of which the Company has knowledge as a
result of which the Prospectus contained in such Registration
Statement, as then in effect, includes an untrue statement of a
material fact or omits 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; and
(g) make available for inspection by the Purchaser and any attorney,
accountant or other agent retained by the Purchaser, all publicly
available, non-confidential financial and other records, pertinent
corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all publicly
available, non-confidential information reasonably requested by the
attorney, accountant or agent of the Purchaser.
4. Registration Expenses. All expenses relating to the Company's compliance
with Sections 2 and 3 hereof, including, without limitation, all registration
and filing fees, printing expenses, fees and disbursements of counsel and
independent public accountants for the Company, fees and expenses (including
reasonable counsel fees) incurred in connection with complying with state
securities or "blue sky" laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, fees of, and disbursements incurred by, one
counsel for the Holders (upon prior agreement by the parties and to the extent
such counsel is required due to Company's failure to meet any of its obligations
hereunder), are called "Registration Expenses". All selling commissions
applicable to the sale of Registrable Securities, including any fees and
disbursements of any special counsel to the Holders beyond those included in
Registration Expenses, are called "Selling Expenses." The Company shall only be
responsible for all Registration Expenses.
5. Indemnification.
(a) In the event of a registration of any Registrable Securities under the
Securities Act pursuant to this Agreement, the Company will indemnify
and hold harmless the Purchaser, and its officers, directors and each
other person, if any, who controls the Purchaser within the meaning of
the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which the Purchaser, or such persons
may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in any
Registration Statement under which such Registrable Securities were
registered under the Securities Act pursuant to this Agreement, any
preliminary Prospectus or final Prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the
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 Purchaser, and each such person for
any reasonable legal or other expenses incurred by them in connection
with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not be
liable in any such case if and to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission
so made in conformity with information furnished by or on behalf of
the Purchaser or any such person in writing specifically for use in
any such document.
(b) In the event of a registration of the Registrable Securities under the
Securities Act pursuant to this Agreement, the Purchaser will
indemnify and hold harmless the Company, and its officers, directors
and each other person, if any, who controls the Company within the
meaning of the Securities Act, against all losses, claims, damages or
liabilities, joint or several, to which the Company or such persons
may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact which was furnished in
writing by the Purchaser to the Company expressly for use in (and such
information is contained in) the Registration Statement under which
such Registrable Securities were registered under the Securities Act
pursuant to this Agreement, any preliminary Prospectus or final
Prospectus contained therein, or any amendment or supplement thereof,
or arise out of or are based upon the 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 and each such person for any reasonable legal or
other expenses incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action, provided,
however, that the Purchaser will be liable in any such case if and
only to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with
information furnished in writing to the Company by or on behalf of the
Purchaser specifically for use in any such document. Notwithstanding
the provisions of this paragraph, the Purchaser shall not be required
to indemnify any person or entity in excess of the amount of the
aggregate net proceeds received by the Purchaser in respect of
Registrable Securities in connection with any such registration under
the Securities Act.
(c) Promptly after receipt by a party entitled to claim indemnification
hereunder (an "Indemnified Party") of notice of the commencement of
any action, such Indemnified Party shall, if a claim for
indemnification in respect thereof is to be made against a party
hereto obligated to indemnify such Indemnified Party (an "Indemnifying
Party"), notify the Indemnifying Party in writing thereof, but the
omission so to notify the Indemnifying Party shall not relieve it from
any liability which it may have to such Indemnified Party other than
under this Section 5(c) and shall only relieve it from any liability
which it may have to such Indemnified Party under this Section 5(c) if
and to the extent the Indemnifying Party is prejudiced by such
omission. In case any such action shall be brought against any
Indemnified Party and it shall notify the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to
participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such
Indemnified Party, and, after notice from the Indemnifying Party to
such Indemnified Party of its election so to assume and undertake the
defense thereof, the Indemnifying Party shall not be liable to such
Indemnified Party under this Section 5(c) for any legal expenses
subsequently incurred by such Indemnified Party in connection with the
defense thereof; if the Indemnified Party retains its own counsel,
then the Indemnified Party shall pay all fees, costs and expenses of
such counsel, provided, however, that, if the defendants in any such
action include both the indemnified party and the Indemnifying Party
and the Indemnified Party shall have reasonably concluded that there
may be reasonable defenses available to it which are different from or
additional to those available to the Indemnifying Party or if the
interests of the Indemnified Party reasonably may be deemed to
conflict with the interests of the Indemnifying Party, the Indemnified
Party shall have the right to select one separate counsel and to
assume such legal defenses and otherwise to participate in the defense
of such action, with the reasonable expenses and fees of such separate
counsel and other expenses related to such participation to be
reimbursed by the Indemnifying Party as incurred.
(d) In order to provide for just and equitable contribution in the event
of joint liability under the Securities Act in any case in which
either (i) the Purchaser, or any officer, director or controlling
person of the Purchaser, makes a claim for indemnification pursuant to
this Section 5 but it is judicially determined (by the entry of a
final judgment or decree by a court of competent jurisdiction and the
expiration of time to appeal or the denial of the last right of
appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 5 provides for
indemnification in such case, or (ii) contribution under the
Securities Act may be required on the part of the Purchaser or such
officer, director or controlling person of the Purchaser in
circumstances for which indemnification is provided under this Section
5; then, and in each such case, the Company and the Purchaser will
contribute to the aggregate losses, claims, damages or liabilities to
which they may be subject (after contribution from others) in such
proportion so that the Purchaser is responsible only for the portion
represented by the percentage that the public offering price of its
securities offered by the Registration Statement bears to the public
offering price of all securities offered by such Registration
Statement, provided, however, that, in any such case, (A) the
Purchaser will not be required to contribute any amount in excess of
the public offering price of all such securities offered by it
pursuant to such Registration Statement; and (B) no person or entity
guilty of fraudulent misrepresentation (within the meaning of Section
10(f) of the Act) will be entitled to contribution from any person or
entity who was not guilty of such fraudulent misrepresentation.
6. Representations and Warranties.
(a) The Common Stock of the Company is registered pursuant to Section
12(b) or 12(g) of the Exchange Act and, except with respect to certain
matters which the Company has disclosed to the Purchaser on Schedule
4.21 to the Securities Purchase Agreement, the Company has timely
filed all proxy statements, reports, schedules, forms, statements and
other documents required to be filed by it under the Exchange Act. The
Company has filed (i) its Annual Report on Form 10-KSB for the fiscal
year ended December 31, 2002 and (ii) its Quarterly Report on Form
10-QSB for the fiscal quarters ended March 31, 2003, June 30, 2003,
and September 30, 2003 and all Current Reports on Form 8-K that the
Company was required to file (collectively, the "SEC Reports"). Each
SEC Report was, at the time of its filing, in substantial compliance
with the requirements of its respective form and none of the SEC
Reports, nor the financial statements (and the notes thereto) included
in the SEC Reports, as of their respective filing dates, contained any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the
SEC Reports comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
Commission or other applicable rules and regulations with respect
thereto. Such financial statements have been prepared in accordance
with generally accepted accounting principles ("GAAP") applied on a
consistent basis during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto
or (ii) in the case of unaudited interim statements, to the extent
they may not include footnotes or may be condensed) and fairly present
in all material respects the financial condition, the results of
operations and the cash flows of the Company and its subsidiaries, on
a consolidated basis, as of, and for, the periods presented in each
such SEC Report.
(b) The Common Stock is listed for trading on the National Association of
Securities Dealers, Inc. Over the Counter Bulletin Board ("NASD
OTCBB") and satisfies all requirements for the continuation of such
listing. The Company has not received any notice that its Common Stock
will be delisted from the NASD OTCBB (except for prior notices which
have been fully remedied) or that the Common Stock does not meet all
requirements for the continuation of such listing.
(c) Neither the Company, nor any of its affiliates, nor any person acting
on its or their behalf, has directly or indirectly made any offers or
sales of any security or solicited any offers to buy any security
under circumstances that would cause the offering of the Securities
pursuant to the Securities Purchase Agreement to be integrated with
prior offerings by the Company for purposes of the Securities Act
which would prevent the Company from selling the Common Stock pursuant
to Rule 506 under the Securities Act, or any applicable
exchange-related stockholder approval provisions, nor will the Company
or any of its affiliates or subsidiaries take any action or steps that
would cause the offering of the Securities to be integrated with other
offerings.
(d) The Warrants, the Note and the shares of Common Stock which the
Purchaser may acquire pursuant to the Warrants and the Note are all
restricted securities under the Securities Act as of the date of this
Agreement. The Company will not issue any stop transfer order or other
order impeding the sale and delivery of any of the Registrable
Securities at such time as such Registrable Securities are registered
for public sale or an exemption from registration is available, except
as required by federal or state securities laws.
(e) The Company understands the nature of the Registrable Securities
issuable upon the conversion of the Note and the exercise of the
Warrant and recognizes that the issuance of such Registrable
Securities may have a potential dilutive effect. The Company
specifically acknowledges that its obligation to issue the Registrable
Securities is binding upon the Company and enforceable regardless of
the dilution such issuance may have on the ownership interests of
other shareholders of the Company.
(f) Except for agreements made in the ordinary course of business, there
is no agreement that has not been filed with the Commission as an
exhibit to a registration statement or to a form required to be filed
by the Company under the Exchange Act, the breach of which could
reasonably be expected to have a material and adverse effect on the
Company and its subsidiaries, or would prohibit or otherwise interfere
with the ability of the Company to enter into and perform any of its
obligations under this Agreement in any material respect.
(g) The Company will at all times have authorized and reserved a
sufficient number of shares of Common Stock for the full conversion of
the Note and exercise of the Warrants.
7. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a Holder, of
any of their respective obligations under this Agreement, each Holder
or the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law and under this Agreement, including
recovery of damages, will be entitled to specific performance of its
rights under this Agreement.
(b) No Piggyback on Registrations. Except as and to the extent specified
in Schedule 7(b) hereto, neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may
include securities of the Company in any Registration Statement other
than the Registrable Securities, and the Company shall not after the
date hereof enter into any agreement providing any such right for
inclusion of shares in the Registration Statement to any of its
security holders. Except as and to the extent specified in Schedule
7(b) hereto, the Company has not previously entered into any agreement
granting any registration rights with respect to any of its securities
to any Person that have not been fully satisfied.
(c) Compliance. Each Holder covenants and agrees that it will comply with
the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities
pursuant to the Registration Statement.
(d) Discontinued Disposition. Each Holder agrees by its acquisition of
such Registrable Securities that, upon receipt of a notice from the
Company of the occurrence of a Discontinuation Event (as defined
below), such Holder will forthwith discontinue disposition of such
Registrable Securities under the applicable Registration Statement
until such Holder's receipt of the copies of the supplemented
Prospectus and/or amended Registration Statement or until it is
advised in writing (the "Advice") by the Company that the use of the
applicable Prospectus may be resumed, and, in either case, has
received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such
Prospectus or Registration Statement. The Company may provide
appropriate stop orders to enforce the provisions of this paragraph.
For purposes of this Section 7(d), a "Discontinuation Event" shall
mean (i) when the Commission notifies the Company whether there will
be a "review" of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement (the
Company shall provide true and complete copies thereof and all written
responses thereto to each of the Holders); (ii) any request by the
Commission or any other Federal or state governmental authority for
amendments or supplements to such Registration Statement or Prospectus
or for additional information; (iii) the issuance by the Commission of
any stop order suspending the effectiveness of such Registration
Statement covering any or all of the Registrable Securities or the
initiation of any Proceedings for that purpose; (iv) the receipt by
the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation
or threatening of any Proceeding for such purpose; and/or (v) the
occurrence of any event or passage of time that makes the financial
statements included in such Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement
or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or
that requires any revisions to such Registration Statement, Prospectus
or other documents so that, in the case of such Registration Statement
or Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(e) Piggy-Back Registrations. If at any time during the Effectiveness
Period there is not an effective Registration Statement covering all
of the Registrable Securities and the Company shall determine to
prepare and file with the Commission a registration statement relating
to an offering for its own account or the account of others under the
Securities Act of any of its equity securities, other than on Form S-4
or Form S-8 (each as promulgated under the Securities Act) or their
then equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or equity
securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written
notice of such determination and, if within fifteen days after receipt
of such notice, any such Holder shall so request in writing, the
Company shall include in such registration statement all or any part
of such Registrable Securities such holder requests to be registered
to the extent the Company may do so without violating registration
rights of others which exist as of the date of this Agreement, subject
to customary underwriter cutbacks applicable to all holders of
registration rights and subject to obtaining any required the consent
of any selling stockholder(s) to such inclusion under such
registration statement.
(f) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the same shall be in
writing and signed by the Company and the Holders of the then
outstanding Registrable Securities. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to
a matter that relates exclusively to the rights of certain Holders and
that does not directly or indirectly affect the rights of other
Holders may be given by Holders of at least a majority of the
Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be
amended, modified, or supplemented except in accordance with the
provisions of the immediately preceding sentence.
(g) Notices. Any notice or request hereunder may be given to the Company
or the Purchaser at the respective addresses set forth below or as may
hereafter be specified in a notice designated as a change of address
under this Section 7(g). Any notice or request hereunder shall be
given by registered or certified mail, return receipt requested, hand
delivery, overnight mail, Federal Express or other national overnight
next day carrier (collectively, "Courier") or telecopy (confirmed by
mail). Notices and requests shall be, in the case of those by hand
delivery, deemed to have been given when delivered to any party to
whom it is addressed, in the case of those by mail or overnight mail,
deemed to have been given three (3) business days after the date when
deposited in the mail or with the overnight mail carrier, in the case
of a Courier, the next business day following timely delivery of the
package with the Courier, and, in the case of a telecopy, when
confirmed. The address for such notices and communications shall be as
follows:
If to the Company: Pipeline Data Inc.
00 Xxxx Xxxx Xxxxxx,
Xxxxxxx Xxxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx,
Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
000 Xxxxxx Xxxx Xxxx,
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to a Purchaser: To the
address set forth under
such Purchaser name on
the signature pages
hereto.
If to any other Person who is then
the registered Holder:
To the address of such Holder
as it appears in the stock
transfer books of the Company
or such other address as may be designated in writing hereafter
in accordance with this Section 7(g) by such Person.
(h) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and permitted assigns of each of
the parties and shall inure to the benefit of each Holder. The Company
may not assign its rights or obligations hereunder without the prior
written consent of each Holder. Each Holder may assign their
respective rights hereunder in the manner and to the Persons as
permitted under the Notes and the Security Agreement with the prior
written consent of the Company, which consent shall not be
unreasonably withheld.
(i) Execution and Counterparts. This Agreement may be executed in any
number of 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. In the event that any signature is
delivered by facsimile transmission, such signature shall create a
valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as
if such facsimile signature were the original thereof.
(j) Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the
State of New York, without regard to the principles of conflicts of
law thereof. Each party agrees that all Proceedings concerning the
interpretations, enforcement and defense of the transactions
contemplated by this Agreement shall be commenced exclusively in the
state and federal courts sitting in the City of New York, Borough of
Manhattan. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the
City of New York, Borough of Manhattan for the adjudication of any
dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any Proceeding, any claim that it
is not personally subject to the jurisdiction of any such court, that
such Proceeding is improper. Each party hereto hereby irrevocably
waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to
such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all
right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. If
either party shall commence a Proceeding to enforce any provisions of
a Transaction Document, then the prevailing party in such Proceeding
shall be reimbursed by the other party for its reasonable attorneys
fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such Proceeding.
(k) Cumulative Remedies. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their reasonable efforts
to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning
hereof.
[Balance of page intentionally left blank;
signature page follows]
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
PIPELINE DATA INC. LAURUS MASTER FUND, LTD.
By: By:
---------------------------- -------------------------------------
---------------------------- -------------------------------------
Name: Name:
---------------------------- -------------------------------------
---------------------------- -------------------------------------
Title: Title:
---------------------------- -------------------------------------
Address for Notices: Address for Notices:
Pipeline Data Inc. 000 Xxxxx Xxxxxx - 14th Floor
00 Xxxx Xxxx Xxxxxx, Xxx Xxxx, XX 00000
Xxxxxxx Xxxxx, Xxx Xxxx 00000 Attention: Xxxx X. Xxxxxx, Esq.
Attention: Xxxxxx Xxxxxxxxx, Facsimile: 000-000-0000
Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
000 Xxxxxx Xxxx Xxxx,
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
EXHIBIT A
[__________, 2004]
[__________Stock Transfer
& Trust Company
[Address]
Attn:[________________ ]
Re: Pipeline Data Inc. Registration Statement on Form [SB-2]
Ladies and Gentlemen:
As counsel to[company name] , a Delaware corporation (the "Company"), we
have been requested to render our opinion to you in connection with the resale
by the individuals or entitles listed on Schedule A attached hereto (the
"Selling Stockholders"), of an aggregate of [amount]shares (the "Shares") of the
Company's Common Stock.
A Registration Statement on Form [SB-2] under the Securities Act of 1933,
as amended (the "Act"), with respect to the resale of the Shares was declared
effective by the Securities and Exchange Commission on [date]. Enclosed is the
Prospectus dated [date]. We understand that the Shares are to be offered and
sold in the manner described in the Prospectus.
Based upon the foregoing, upon request by the Selling Stockholders at any
time while the registration statement remains effective, it is our opinion that
the Shares have been registered for resale under the Act and new certificates
evidencing the Shares upon their transfer or re-registration by the Selling
Stockholders may be issued without restrictive legend. We will advise you if the
registration statement is not available or effective at any point in the future.
Very truly yours,
[Company counsel]
Schedule A
Selling Stockholder R/N/O Shares
------------------- -----
Being Offered
Schedule 7(b)
Piggyback rights on Registrations
The following persons have been awarded piggyback registration rights:
Name Description
Xxxxx Xxxxxx 600,000 common shares
Together with Xxxxx Xxxxxx, that number of common shares
into which an aggregate of 3,000 shares of preferred shares
are convertible (3,000,000 common shares).
Up to 3,000,000 common shares (if issued pursuant to
milestones)
Xxxxx Xxxxxx 500,000 common shares
Xxxx Xxxxx 100,000 common shares
XxxXxxxxxxx Xxxxx 749,496 common shares
100,000 common shares
2,987,512 common shares (if issued pursuant to milestones)
Chasm Holdings 4,118,545 common shares
1,100,000 common shares (if issued pursuant to milestones)
GAnthony Xxxxxxxx 1,100,000 common shares
1,000,000 common shares (if issued pursuant to milestones)
Xxxx Xxxxxx up to 280,000 shares
(if issued as investor relations representative)
Xxxx Xxxxxxx 201,256 common shares (if issued pursuant to milestones)
Xxx Xxxxxxxx 46,233 common shares
201,256 common shares (if issued pursuant to milestones)
Xxxx Xxxxxxx 184,200 common shares
Xxxxx Xxxxx 247,750 common shares
988,504 common shares (if issued pursuant to milestones)
Xxxxxx Xxxxxxx 2,694 common shares
10,736 common shares (if issued pursuant to milestones)
Xxxxx Xxxxxx 2,694 common shares
10,736 common shares (if issued pursuant to milestones)
Xxxxx Xxxxxx 2,155 common shares
Xxxx Xxxxxxxxxx 100,000 common shares
Xxxx Xxxxxxxxxx 160,000 common shares
Xxxxxx Xxxxxxx 150,000 common shares
Note: GunAllen Financial, Inc. piggyback registration rights as set forth in
Schedule 11.12 of the Securities Purchase Agreement.
