EXHIBIT 4.23
REGISTRATION RIGHTS AGREEMENT
COMMON STOCK
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This Registration Rights Agreement (the "Agreement") is made and entered
into on January 11, 2005, by and between Raptor Networks Technology, Inc., a
Colorado Corporation (the "Company"), and Palisades Capital, LLC, a Nevada
limited liability company (the "Shareholder"), relating to registration of
shares of the Company's common stock (the "Common Stock").
The parties hereby agree as follows:
1. Definition of Registrable Securities.
"Registrable Securities" means any shares of Common Stock now owned by the
Shareholder, as well as the 975,000 shares to be issued to Shareholder pursuant
to Mutual Release and Settlement Agreement between the parties hereto.
2. Piggyback Registration.
(a) Each time, prior to the Termination Date, as hereinafter defined,
that (i) there is not a registration statement covering all of the Registrable
Securities and (ii) the Company shall propose the registration under the
Securities Act of 1933, as amended (the "Act"), of any shares of Common Stock of
the Company (other than registrations on Forms ▇-▇, ▇-▇ or any similar or
successor forms thereto), notice of such proposed registration stating the total
number of shares proposed to be the subject of such registration shall be given
by the Company to the Shareholder. Unless, within ten days after receipt of the
notice, the Shareholder shall request in writing that the Registrable Securities
not be included in such proposed registration statement (an "Exclusion
Request"), the Company will automatically include in the registration statement
filed with the Commission, as hereinafter defined, with regard to such proposed
registration all or any part of such Registrable Securities such holder did not
request to be excluded from registration, subject to customary underwriter
cutbacks applicable to all holders of registration rights.
(b) All Registration Expenses, as hereinafter defined, incident to the
performance of or compliance with this Agreement by the Company, whether or not
any Registrable Securities are sold pursuant to a registration statement filed
pursuant to this Agreement under the Act, will be paid by the Company.
(c) Notwithstanding anything to the contrary in this Section 2, the
Shareholder shall not be entitled to include in any registration statement filed
pursuant to this Section 2 such number of Registrable Securities as are demanded
not to be included, in writing, by the selling shareholders listed in such
registration statement (excluding the Shareholder) in the event such
registration statement is being filed pursuant to the exercise by such selling
shareholders of demand registration rights granted after the date hereof, or
pursuant to registration rights granted to such selling shareholders in
connection with a financing completed after the date hereof or otherwise;
PROVIDED, HOWEVER, that in the event any of Shareholder's Registrable Securities
were not excluded from registration pursuant to an Exclusion Request in
accordance with this Section 2 ("Requested Registrable Securities") and,
accordingly, are to be included in such registration statement, but were not so
included, then the Company shall, as promptly as practicable following the
filing of such registration statement, but in any event not more than ninety
(90) days following the effectiveness of such filing, file an additional
registration statement registering the Requested Registrable Securities and use
the Company's reasonable best efforts to cause such registration statement to be
declared effective within sixty days thereafter; and PROVIDED FURTHER, HOWEVER,
that the Company shall not be required to file more than one registration
statement on behalf of the Shareholder pursuant to this Section 2(c) (other than
for purposes of keeping the registration statement current and effective for a
period not to exceed one (1) year from the date the registration statement is
first declared effective) without regard to the number of shares constituting
the Requested Registrable Securities.
(d) The piggyback registration rights provided in this Section 2 may
be exercised by the Shareholder from time to time in accordance with the
provisions of this Section 2 with respect to any or all registrations under the
Act of Common Stock of the Company proposed under this Section 2, except for
registrations of common stock on Forms ▇-▇, ▇-▇ or any similar or successor
forms thereto.
3. Registration Procedures. In connection with each registration of
Registrable Securities provided for in Section 2 hereof, the Company shall as
expeditiously as possible:
(a) furnish to the Shareholder, prior to filing a registration
statement or amendments thereto with the Commission, copies of such registration
statement and amendments as proposed to be filed and all exhibits thereto, and
thereafter furnish such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits thereto),
the prospectus included in such registration statement and amendments thereto
(including each preliminary prospectus) and such other documents as such holder
may reasonably request;
(b) use its reasonable best efforts to register or qualify the
Registrable Securities included in any registration statement filed in
accordance with Section 2 hereof under such securities or blue sky laws of such
jurisdictions as Shareholder reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such
Shareholder to consummate the disposition in such jurisdictions of the
Registrable Securities owned by such holder; PROVIDED, HOWEVER that the Company
will not be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this paragraph (b),
(ii) subject itself to taxation in any such jurisdiction by reason of such
registration or qualification of any Registrable Securities, or (iii) consent to
general service of process in any such jurisdiction;
(c) notify Shareholder, at any time when a prospectus relating to the
Registrable Securities is required to be delivered under the Act, of the
happening of any event as a result of which the prospectus included in any such
registration statement contains an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading, and prepare a supplement or amendment to
such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading;
(d) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the Company are then
listed, provided that the applicable listing requirements are satisfied;
(e) use its reasonable best efforts to keep the registration statement
effective and properly updated as required by applicable law, so that the
Shareholder may freely sell the Registrable Securities in open market
transactions prior to the Termination Date; and
(f) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Securities and Exchange Commission (the
"Commission").
(g) The Company may require, as a condition to its obligations under
this Agreement, that the Shareholder furnish to the Company such information
regarding the distribution of such securities as the Company may from time to
time reasonably request in writing. The Shareholder agrees to furnish to the
Company a completed selling security holder questionnaire (in the form to be
provided by the Company as described in Section 6(a), at least five trading days
prior to the filing of a registration statement or any related prospectus or any
amendment or supplement thereto covering Registrable Securities.
4. Registration Expenses.
Registration Expenses shall be borne as set forth in Section 2.
"Registration Expenses" shall consist of all expenses incurred by the Company
incidental to the Company"s performance of or compliance with this Agreement,
including without limitation all registration and filing fees, fees and expenses
of compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), printing expenses, messenger and delivery expenses,
internal expenses (including, without limitation, all salaries and expenses of
the Company"s officers and employees performing legal or accounting duties), the
fees and expenses incurred in connection with the listing of such securities on
each securities exchange on which similar securities issued by the Company are
then listed, all fees payable to the National Association of Securities Dealers,
Inc. (the "NASD") and fees and disbursements of counsel for the company and of
its independent certified public accountants (including the expenses of any
special audit or "comfort" letters required by or incident to such performance),
securities acts liabilities insurance (if the Company elects to obtain such
insurance), and the reasonable fees and expenses of any special experts retained
by the Company in connection with any registration of Registrable Securities.
5. Indemnification; Contribution.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify,
to the fullest extent permitted by law, the Shareholder , its officers and
directors and each person who controls the Shareholder (within the meaning of
the Act) against all losses, claims, damages, liabilities and expenses
("Losses") caused by any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary prospectus or
amendment or supplement thereto or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in the case of a prospectus, in the light of the
circumstances under which they were made) not misleading, and the Company will
reimburse all legal or other expenses reasonably incurred by the Shareholder in
investigating or defending any claims relating to or arising from such untrue
statements or omissions, in all cases except insofar as such Losses are caused
by (i) statements or omissions made in reliance upon or contained in any
information with respect to the Shareholder furnished in writing to the Company
by the Shareholder expressly for use therein or (ii) the Shareholder's failure
to deliver a copy of the final prospectus as then amended or supplemented after
the Company has furnished the Shareholder with a sufficient number of copies of
the same, but only if delivery of same is required by law and if delivery would
have cured the defect giving rise to any such Losses. Such indemnification shall
be effective irrespective of any investigation by the Shareholder.
(b) INDEMNIFICATION BY THE SHAREHOLDER. The Shareholder agrees to
indemnify, to the fullest extent permitted by law, the Company, its officers and
directors and each person who controls the Company (within the meaning of the
Act) against all Losses caused by any untrue or alleged untrue statement of
material fact contained in any registration statement, prospectus or preliminary
prospectus or amendment or supplement thereto or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a prospectus, in the
light of the circumstances under which they were made) not misleading, and the
Shareholder will reimburse all legal or other expenses reasonably incurred by
the Company or such other indemnified party in investigating or defending any
claims relating to or arising from such untrue statements or omissions, in all
cases insofar as such Losses are caused by (i) statements or omissions made in
reliance upon or contained in any information with respect to the Shareholder
furnished in writing to the Company by the Shareholder expressly for use therein
or (ii) the Shareholder's failure to deliver a copy of the final prospectus as
then amended or supplemented after the Company has furnished the Shareholder
with a sufficient number of copies of the same, but only if delivery of same is
required by law and if delivery would have cured the defect giving rise to any
such Losses. Such indemnification shall be effective irrespective of any
investigation by the Company. Notwithstanding the foregoing, any indemnification
obligation by Shareholder shall be limited to the gross proceeds received by the
Shareholder upon sale of any of the Registrable Securities so included in the
registration statement that is alleged to contain the statements or omissions
described in this Section 5(b).
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any person entitled to
indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the receipt by such person of any written notice of the
commencement of any action, suit, proceeding or investigation or threat thereof
made in writing for which such person will claim indemnification or contribution
pursuant to this Agreement and, unless in the reasonable judgment of such
indemnified party a conflict of interest may exist between such indemnified
party and the indemnifying party, shall permit the indemnifying party to assume
the defense of such claim with counsel reasonably satisfactory to such
indemnified party. If the indemnifying party is not entitled to assume the
defense of a claim, it will not be obligated to pay the fees and expenses of
more than one counsel for the indemnified party with respect to such claim. The
indemnifying party will not be subject to any liability for any settlement made
without its consent. Failure of notice by a party entitled to indemnification
hereunder will not relieve the indemnifying party of its obligations under this
Section 5 unless the indemnifying party is actually prejudiced thereby.
(d) CONTRIBUTION.
(i) If the indemnification provided for in this Section 5 from
the indemnifying party is unavailable to an indemnified party hereunder in
respect of any Losses referred to herein (other than by reason of the
indemnification cap contained in Section 5(b)), then the indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute (on the basis of
relative fault) to the amount paid or payable by such indemnified party as a
result of such Losses. The relative fault of such indemnifying and indemnified
parties shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has been
made by, or relates to information supplied by, such indemnifying or indemnified
parties, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action. The amount paid or payable by a
party as a result of the Losses referred to above shall be deemed to include,
subject to the limitations set forth in Section 5(c), any legal or other fees or
expenses reasonably incurred by the indemnified party in connection with any
investigation or proceeding.
(ii) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(iii) If indemnification is available under this Section 5, then
the indemnifying parties shall indemnify each indemnified party to the full
extent provided in Sections 5(a) and 5(b) without regard to the relative fault
of said indemnifying party or indemnified party.
6. Participation in Underwritten and Demand Registrations.
(a) No record owner of Registrable Securities may participate,
pursuant to Section 2 hereof, in any underwritten offering of Common Stock of
the Company pursuant to a Registration Statement filed in accordance with
Section 2 hereof, unless such owner completes and executes all questionnaires,
indemnities, underwriting agreements and such other documents reasonably
required under the terms of customary underwriting arrangements.
(b) No record owner of Registrable Securities may participate,
pursuant to Section 2 hereof, in any offering of Common Stock of the Company,
notice of which is given pursuant to Section 2 hereof, unless such owner, upon
the written request of the holders of a majority of the shares being included in
such registration statement, agrees to sell its Registrable Securities only
pursuant to a lock-up agreement which provides for a maximum lock-up period of
six months from the date of the effectiveness of such registration statement,
provided, however, that the officers and directors of the Company are subject to
the same lock-up agreement.
7. Rule 144.
The Company covenants that it will timely file the reports required to
be filed by it under the Securities Exchange Act of 1934, as amended, and the
rules and regulations adopted by the Commission thereunder, and it will take
such further action as the Shareholder may reasonably request, all to the extent
required from time to time to enable the Shareholder to sell Registrable
Securities without registration under the Act within the limitation of the
exemptions provided by (a) Rule 144 under the Act, as such Rule may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted by
the Commission. Upon the request of the Shareholder, the Company will deliver to
the Shareholder a written statement as to whether it has complied with such
requirements.
8. Termination.
This Agreement shall terminate on the second anniversary of the date
hereof ("Termination Date"). The provisions of Section 5 hereof shall survive
such termination.
9. Miscellaneous.
(a) NO INCONSISTENT AGREEMENTS. The Company will not hereafter enter
into any agreement with respect to its securities which is inconsistent with the
rights granted to the record owners of Registrable Securities in this Agreement.
(b) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the
provisions of this Agreement 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
Shareholder.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing and be by hand-delivery, certified
mail, return receipt requested, telecopy or U.S. nationally recognized overnight
courier service:
(i) if to the Shareholder:
Palisades Capital, LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ATTN: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel.: (▇▇▇) ▇▇▇ ▇▇▇▇
Fax:_(▇▇▇) ▇▇▇ ▇▇▇▇
or such other address given by the Shareholder to the
Company in writing, with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(ii) if to the Company:
Raptor Networks Technology, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel: ▇▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇▇ ▇▇▇▇
or such other address given to the Shareholder by the
Company in writing, with a copy (which shall not constitute
notice) to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇ & ▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
All such notices and communications shall be deemed to have been duly
given and effective as of the earliest of: (i) when delivered by hand, if
personally delivered; (ii) four business days after being deposited in the mail,
postage prepaid, if mailed; (iii) when receipt is acknowledged, if telecopied;
(iv) the next business day, if timely delivered to a U.S. nationally recognized
overnight courier service; or (v) upon actual receipt by the party to whom such
notice is being given.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate 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. If 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) with the same force and effect as if such facsimile signature were the
original thereof.
(f) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. This agreement shall be governed by and construed
in accordance with the laws of the State of California applicable to contracts
made and to be performed wholly within that state, without giving effect to
conflicts of laws principles. The parties hereby agree to waive trial by jury
with respect to any dispute hereunder, and shall permit the dispute to be
resolved by bench trial.
(h) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the Company
and the Shareholder shall be enforceable to the fullest extent permitted by law.
(i) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be a completed and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein and therein. There are no representations,
promises, warranties or undertakings, other than those set forth or referred to
herein and therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
(j) COMPLIANCE. The Shareholder covenants and agrees that it will
comply with the prospectus delivery requirements of the Act, as applicable to it
in connection with sales of Registrable Securities included by the Company in a
registration statement; provided that upon the effectiveness of any registration
statement, the Company provides a summary of such prospectus delivery
requirements to the Shareholder
(k) DISCONTINUED DISPOSITION. The Shareholder agrees by its
acquisition of Registrable Securities that, upon receipt of a notice from the
Company of the occurrence of any event of the kind described in Section 3(c),
the Shareholder will forthwith discontinue disposition of Registrable Securities
under the registration statement (so long as such Registrable Securities have,
in fact, been registered under such registration statement) until the
Shareholder's receipt of the copies of the supplemented prospectus and/or
amended registration statement and/or is advised in writing by the Company that
the use of the applicable prospectus may be resumed, and 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 shall use its best efforts to file such supplemented prospectus and/or
amended registration statement as soon as reasonably possible, and shall
promptly provide such copies and/or advice as soon as reasonably possible to
Shareholder. This provision shall have no effect on any disposition of
Registrable Securities under an exemption from registration requirements,
including, without limitation, dispositions exempt under Section 4(1) or 4(2) of
the Act, or similar provisions concerning exemptions from registration under the
Act, or Rule 144 promulgated under the Act.
(l) AGREEMENT NOT DRAFTED BY EITHER PARTY. In the event of any
disagreement hereunder, this Agreement shall not be construed as having been
drafted by either party.
(m) CAPTIONS. The headings of sections of this Agreement are intended
solely for convenience of reference and are not intended and will not be deemed
for any purpose whatever to modify or explain or place any construction upon any
of the provisions of this Agreement. (n) AUTHORITY TO SIGN. Each of the
individuals whose signature appears below hereby represents and warrants that he
or she has actual authority to enter into this Agreement on behalf of the entity
on whose behalf he or she signs this Agreement and does so to the fullest extent
of his or her authority as an officer of such entity.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed on the date first above written.
Raptor Networks Technology, Inc.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
Title: President and CEO
Palisades Capital, LLC
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President