EXHIBIT 10.3
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REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and
entered into as of June 17, 2004, by and between LocatePLUS Holdings
Corporation, 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:
"Class A Common Stock" means shares of the Company's Class A
voting common stock, par value $0.01 per share.
"Commission" means the Securities and Exchange Commission.
"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 hereof and with respect to shares of Class A Common Stock
issuable to the Holder as a result of adjustments to the Fixed Conversion Price
made pursuant to Section 3.4 of the Secured Convertible Term Note or Section 4
of the Warrant or otherwise, thirty (30) days after the occurrence such event or
the date of the adjustment of the Fixed Conversion Price.
"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 Class A 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 $3,000,000 of
convertible Note 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 Class A 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
resale of 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 (except if the Company is not then eligible to register
for resale the Registrable Securities on Form SB-2, 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 Class A 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 Class A 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 proportion of the then outstanding principal
balance of the Note then held by such Holder. 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) business days following the date on which such Event has been cured
by the Company.
(c) Within five business days of the Effectiveness Date, the
Company shall, if required by such transfer agent, 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 the Purchaser and confirmation by the
Purchaser 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 the Purchaser 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 commercially reasonable 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 Class
A Common Stock of the Company is then listed;
(f) as promptly as practicable 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.
The Company may require each selling Holder to furnish to the Company a
certified statement as to the number of shares of Class A Common Stock
beneficially owned by such Holder and, if required by the Commission, the
person(s) thereof that has voting and/or dispositive control over such shares of
Class A Common Stock.
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 (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 (1) 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 or (2) in the case of an occurrence of an
event of the type specified in Section 3(c), the use by such Holder of
an outdated or defective Prospectus after the Company has notified such
Holder of the Advice contemplated in Section 7(d).
(b) In the event of a registration of the Registrable
Securities under the Securities Act pursuant to this Agreement, each
Holder 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: (x) such Holder's
failure to comply with the prospectus delivery requirements of the
Securities Act applicable to such Holder or (y) any untrue statement or
alleged untrue statement of any material fact which was furnished in
writing by such Holder 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 Class A 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 its fiscal year ended December 31, 2003; (ii) its Quarterly
Report on Form 10-QSB for the fiscal quarter ended March 31, 2004 and
(iii) the Form 8-K filings which it has made during the fiscal year
2004 to date (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 Class A Common Stock is traded on the NASD OTCBB and
satisfies all requirements for the continuation of such trading. The
Company has not received any notice that its Class A Common Stock will
not be eligible to be traded on the NASD OTCBB (except for prior
notices which have been fully remedied) or that the Class A Common
Stock does not meet all requirements for the continuation of such
trading.
(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 Class A
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 Class A 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 Class A 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 ten (10)
business 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: LocatePLUS Holdings Corporation
Attention: Chief Financial Officer
Facsimile:
with a copy to:
Xxxxxxxxxxx & Xxxxxxxx LLP
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile: 617.261.3175
If to a Purchaser: To the address set forth under such
Purchaser name on the signature
pages hereto.
If to any other Person To the address of such Holder as it
who is then the appears in the stock transfer books
registered Holder: 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 Securities Purchase 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
this Agreement, the Securities Purchase Agreement or any Related
Agreement, 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.
LOCATEPLUS HOLDINGS CORPORATION LAURUS MASTER FUND, LTD.
By: /s/ Xxx X. Xxxxxxxxx By: /s/ Xxxxx Grin
------------------------ -----------------------
Name: Xxx X. Xxxxxxxxx Name: Xxxxx Grin
------------------------ -----------------------
Title: President Title: Managing Partner
------------------------ -----------------------
Address for Notices:
000 Xxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Grin
Facsimile: 000-000-0000
EXHIBIT A
[Month __, 2004]
[Continental Stock Transfer
& Trust Company
Two Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx]
Re: LocatePLUS Holdings Corporation. Registration
Statement on Form SB-2
---------------------------------------------
Ladies and Gentlemen:
As counsel to LocatePLUS Holdings Corporation, 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 Class A 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 7(b)-EQUITY TO BE REGISTERED
WARRANTS AND REGISTRATION RIGHTS
WARRANTS CLASS A
-----------------------------------------------------------------------------------------------------
Xxxxx, Xxxxx and Xxxxx 50,000 No registration rights
-----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx & Xxxxxxx 30,000 No registration rights
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx 60,000 No registration rights
-----------------------------------------------------------------------------------------------------
Xxxxx, Xxxxxx 60,000 No registration rights
-----------------------------------------------------------------------------------------------------
Xxxxxxxx, Jr. Trust 15,000 No registration rights
-----------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxx X 75,000 No registration rights
-----------------------------------------------------------------------------------------------------
Xxxxxxxxx, Xxxxxx 5,000 No registration rights
-----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx 35,000 No registration rights
-----------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxx 25,000 No registration rights
-----------------------------------------------------------------------------------------------------
Xxxx, Xxxxx 50,000 No registration rights
-----------------------------------------------------------------------------------------------------
Xxxxx, Xxxxxxxx 65,000 No registration rights
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
2001 GRANTS
-----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx 25,000 No registration rights
-----------------------------------------------------------------------------------------------------
Oftring Company 43,500 No registration rights
-----------------------------------------------------------------------------------------------------
Para, Xxxx 19,000 No registration rights
-----------------------------------------------------------------------------------------------------
Xxxxx, Xxxxxx 50,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
2002 GRANTS
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxx 35,133 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx 139,041 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx 53,065 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx 21,500 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx 13,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
2003 GRANTS
-----------------------------------------------------------------------------------------------------
Xxxxx, Xxxxxxx 472,500 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx 187,500 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx 531,750 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxx 375,000 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Para, Xxxxxx 270,000 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
WARRANTS - CL B
-----------------------------------------------------------------------------------------------------
2001 GRANTS
-----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxx 500,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx 250,000 No registration rights
-----------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxx X. 250,000 No registration rights
-----------------------------------------------------------------------------------------------------
Xxxxxxxxxx, Xxxxx 25,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx 25,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxx X. 26,346 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxx-Xxxxxxxxxx 26,207 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxx X. 77,374 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Sappin, Xxxxxx X. 8,736 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxx, Xxxxxxx 12,500 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxxxx 12,500 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx 300,000 No registration rights
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx 300,000 No registration rights
-----------------------------------------------------------------------------------------------------
Para, Xxxx 300,000 No registration rights
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx 324,581 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx 42,553 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
2002 GRANTS
-----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxx 1,177,680 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx 35,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxx 35,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx 27,089 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx 16,889 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx 35,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxx, Xxxx 35,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxxxx Leasing Co 57,184 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
KFT 250,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
Volones 250,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxx 12,500 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------
2003 GRANTS
-----------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxx 1,111,110 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxxxxx, Xxxxx 10,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
J&J Xxxx Family Ltd 50,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
Xxxxx & Xxxxx Xxxxx 65,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
Xxxxxxx Xxxx 5,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx 250,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxx 10,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
Xxxx Xxxxxxxx 10,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
Xxxxx & Xxxxxx Xxxxxxxx 35,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
J&J Xxxx 50,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
J&J Xxxx 200,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
J&J Xxxx 1,300,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxx 35,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxx, Xxx 35,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxx 35,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
vFinance Investments 20,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxxx Xxxx 2,500 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxxxx 2,500 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxxxx 100,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx 5,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
Xxxxx & Xxxxx Xxxxx 25,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
Xxxxx Xxxxx 55,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
Xxxxxxx Xxxx Family Trust 10,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
Deveraux, Inc. 300,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
UpFront Consulting 150,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxx Xxxxxx 25,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
X. Xxxxx Consulting 25,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Evergreen Investment Partners 700,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Kenzy Investment Trust 300,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Xxxxx Xxx 250,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
J&J Xxxx 1,000,000 Demand if short form (S-3 or equivalent) is available
-----------------------------------------------------------------------------------------------------
Evergreen Investment Partners 300,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
Kenzy Investment Trust 400,000 Piggy-Back - Subject to underwriter restriction
-----------------------------------------------------------------------------------------------------
SHARES WITH REGISTRATION RIGHTS
CLASS A
-----------------------------------------------------------------------------------------------------
Xxxxx, Xxxxxxx 390,625 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
National Financial 4,000,000 Piggy-Back
-----------------------------------------------------------------------------------------------------
Xxxxx, Xxxx 357,143 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Greenwood Partners 1,235,219 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Xxxx Xxxxxxxxx 390,625 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxxxx 812,922 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Xxxxxx Xxxxx 390,625 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx 473,571 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx 475,000 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxx 475,000 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Xxxxx, Xxxxxxx 157,500 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx 62,500 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx 177,250 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxx 125,000 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
Para, Xxxxxx 90,000 Demand & Piggy-Back - Subject to underwriter
restriction
-----------------------------------------------------------------------------------------------------
