Exhibit
10.8


 


REGISTRATION
RIGHTS AGREEMENT


 


This Registration Rights Agreement (this “Agreement”)
is made and entered into as of December    , 2003, by and
between EQUIFIN, 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 among, the Purchaser,
Equinox Business Credit Corp. 
(“Equinox”) 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
$.01 per share.


 


“Delay Period” has the meaning set forth
in Section 2(d)


 


“Effectiveness Date” means the 90th day
following the applicable Filing Date; provided, however, that if the Company
has been notified (orally or in writing) by the Commission that a Registration
Statement is to be reviewed, then the “Effectiveness Date” shall mean the 120th
day following the Filing Date related thereto; provided, further, however, that
the Effectiveness Date with respect to each Registration Statement required to
be filed in accordance herewith shall be extended subject to the terms and
conditions set forth in this Agreement.


 


“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 (1)
the Registration Statement which is required to be filed with respect to the
Note and Warrants issued pursuant to the Securities Purchase Agreement, the
date which is forty five (45) days after the funding date with respect to said
Note, and (2) with respect to each $500,000 aggregate amounts funded after the
initial funding date, in accordance with the Subsequent Funding Letter
Agreement, the date which is thirty (30) days after funding of such additional
$500,000.


 


“Holder” or “Holders”
means the Purchaser or any of its affiliates or transferees to the extent any
of them hold Registrable Securities provided that the transfer or assignment to
such transferee or assignee is in accordance with applicable law and the
Securities Purchase Agreement and all other applicable agreements and that the
Company is given written notice at


 


 


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the time of such transfer or assignment, stating the name and address
of the transferee or assignee and identifying the Registrable Securities with
respect to which such registration rights are being transferred or assigned;
and, provided further, that the transferee or assignee of such rights assumes in
writing the obligations of such Holder under this Agreement.  If pursuant
to one or more transfers or assignments at any time there exists more than 10
Holders, the Company may, upon 30 days’ written notice to the Holders require
that the Holders appoint a single agent for purposes of all communications
between the Company and the Holders regarding registration rights, including,
without limitation, for purposes of Sections 3 and 8 hereof, and a single legal
counsel to such agent representing all of the Holders (the fees and expenses of
such agent and counsel to be borne by the Holders); provided that if such agent
and counsel are not appointed by a writing signed by the Holders of a majority
of the Registrable Securities (assuming full conversion of the Notes and
exercise in full of the Warrants) and delivered to the Company within 30 days
of such notice from the Company, the Company may limit thereafter its
communications with Holders under such Sections 3 and 8 to the Holders of the
three largest amounts of Registrable Securities (assuming full conversion of
the Notes and exercise in full of the Warrants)


 


”Indemnified Party”
shall have the meaning set forth in Section 5(c).


 


“Indemnifying Party”
shall have the meaning set forth in Section 5(c).


 


“Information Delay
Period” has the meaning set foth in Section 2(b).


 


“Note” means the
“Note” as defined in and issued pursuant to the Securities Purchase Agreement,
and all other convertible notes issued pursuant to the Subsequent Funding
Letter 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 a 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 such 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 each Note and
issuable upon exercise of the Warrants until (i) the date on which such shares
have been registered under the Securities Act and disposed of in accordance
with a Registration Statement that has been declared effective by the
Commission, (ii) the date on which such shares may be immediately sold without
volume restrictions pursuant to Rule 144(k), as determined by counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company’s transfer agent, or (iii) the date on which such
shares of Common Stock are distributed to the public pursuant to Rule 144 or
any other applicable exemption under the Securities Act without additional
restriction upon public resale.


 


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“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.


 


“Subsequent Funding Letter Agreement”
means that certain letter agreement, dated, as of the date hereof, among
Purchaser, Equinox Business Credit Corp. 
and the Company, pursuant to which Purchaser has agreed, subject to the
terms and conditions set forth therein, to fund additional amounts of loans to
Equinox.


 


“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.


 


“Transaction Delay Period” has the
meaning set forth in Section 2(c).


 


“Warrants” means
the Common Stock purchase warrants issued pursuant to the Securities Purchase
Agreement and all subsequent common stock purchase warrants issued pursuant to
the Subsequent Funding Letter Agreement.


 


2.                                       Registration.


 


(a)                                  On
or prior to each Filing Date the Company shall prepare and file with the
Commission a Registration Statement covering the the resale of the Registrable
Securities, required to be included therein, by the Holders thereof from time
to time pursuant to Rule 415 under the Act and in accordance with the methods
of distribution set forth therein. The Registration Statement shall be on Form
S-3(except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance herewith). The Company shall use its
reasonable best efforts to cause each Registration Statement to become
effective and remain effective as provided herein. The Company shall use its
reasonable commercial efforts to cause each 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 relating
thereto; provided, however,
subject to Section 2(e) hereof, that the Company may delay such filing or


 


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effectiveness under the circumstances and during the periods described
in Sections 2(b), (c) and (d) hereof. . 
The Company shall use its reasonable commercial efforts to keep each
Registration Statement continuously effective under the Securities Act until
the date which is the earliest date of when (i) all Registrable Securities
included therein have been sold,  (ii)
all Registrable Securities included therein 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, or (iii) December     , 2008 (the
“Effectiveness Period”).


 


(b)                                 If
at any time counsel to the Company has determined in good faith that the filing
of a Registration Statement or the compliance by the Company with its
disclosure obligations in connection with a Registration Statement would
require the disclosure of material information which the Company has a bona fide business purpose for preserving
as confidential, then the Company may delay the filing of any such Registration
Statement (if not then filed) and shall not be required to obtain or maintain
the effectiveness of any Registration Statement or amend or supplement any
Registration Statement for a period (an “Information Delay Period”) expiring
upon the earlier to occur of (i) the date on which such material information is
disclosed to the public or ceases to be material or the Company is able to so
comply with its disclosure obligations and the Commission requirements or (ii)
40 days after counsel to the Company makes such good faith determination.  There shall not be two or more Information
Delay Periods during any contiguous 180-day period.


 


(c)                                  If
at any time the Company is advised by a nationally or regionally recognized
investment banking firm selected by the Company that, in such firm’s written
reasonable opinion addressed to the Company, sales of Common Stock pursuant to
any Registration Statement at such time would materially adversely affect any
immediately planned underwritten public financing by the Company, the Company
shall not be required to maintain the effectiveness of such Registration
Statement or amend or supplement such Registration Statement for a period (a
“Transaction Delay Period”) commencing on the date of pricing of such equity
financing and expiring upon the earliest to occur of (i) the abandonment of
such financing or (ii) 120 days after the completion of such financing.  There shall not be more than one Transaction
Delay Period during any contiguous 12-month period.


 


(d)                                 A
Transaction Delay Period and an Information Delay Period are hereinafter
collectively referred to as “Delay Periods” or a “Delay Period.”  The Company will give prompt written notice,
in the manner prescribed herein, to each Holder of each Delay Period.  Such notice shall be given (i) in the case
of a Transaction Delay Period, at least 10 days in advance of the commencement
of such Delay Period, provided such notice need not state the precise date of
such commencement, as long as the Company provides such Holder with at least 3
days’ notice of such date and provided such date is within 45 days of the date
of the first notice given to such Holder and (ii) in the case of an Information
Delay Period, as soon as practicable after the circumstances giving rise
thereto are identified.  Such notice
shall state to the extent, if any, as is practicable, an estimate of the
duration of such Delay Period.  Each
Holder, by his acceptance of any Notes, Warrants or Registrable Securities,
agrees that (i) upon receipt of such notice of a Delay Period it will forthwith
discontinue disposition of Registrable Securities or any other securities
pursuant to any Registration Statement and (ii) will not deliver any Prospectus
forming a part of any Registration Statement in connection with any sale of
Registrable Securities until the expiration of such Delay Period.


 


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(e)                                  Except
as provided in Section2(f), if: (i) any Registration Statement is not filed on
or prior to the applicable Filing Date for such Regsitration Statement; (ii) a
Registration Statement required to be filed hereunder is not declared effective
by the Commission by the Effectiveness Date with respect to such Registration
Statement; (iii) after a Registration Statement is filed with and declared
effective by the Commission, such 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 applicable to such Registration Statement (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 such Registration Statement is declared effective); or
(iv) after the commencement of the Effectiveness Period, the Common Stock is
not listed or quoted on any Trading Market, or is suspended from trading on all
Trading Markets for a period of five (5) 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 or resume trading of the Common Stock on another
Trading Market within 90 days of such notice); (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 five (5) Trading Day period
is exceeded ], being referred to as “Event Date”), then until the
applicable Event is cured, for each thirty (30) day period (prorated for
partial periods) that the Event continues, the Company shall pay:  (A) for any delay in filing or effectiveness
of any Registration Statement pursuant to Sections 2(b), 2(c) or 2(d) hereof,
or in the case of an Event pursuant to clauses (i), (ii) or (iii) of this
Section 2(e), an amount in cash, as liquidated damages, and not as a penalty,
equal to 1.0% of the then outstanding principal amount of the Notes, the
Registrable Securities underlying same were required to be, or were included
in, the Registration Statement with respect to which the Event occurred and is
continuing; and (B) in the case of an Event pursuant to clause (iv), an amount
in cash, as liquidated damages, and not as a penalty, equal to 1.0% of the then
outstanding principal amount of all Notes, the Registrable Securities
underlying same were required to be included in a then effective Registration
Statement in accordance with this Agreement. . 
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.   .  If the Events described in either of clauses (i) or (ii)
above arose solely because the applicable Holder or Holders failed to provide
the Company with certain information within 5 business days after request
therefor pursuant to Section 4, liquidated damages with respect thereto will
not begin to accrue until 20 business days after such information has been
provided to the Company.


 


(f)                                    Notwithstanding
the foregoing, the time periods specified in Section 2(e) shall be tolledduring
the pendency of any circumstances beyond the Company’s control that prevent
performance by the Company of its obligations hereunder despite the Company’s
best efforts.  Such matters include events affecting issuers generally,
such as the temporary closure of federal agencies, and events directly
affecting the Company,


 


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such as the Company’s
inability to obtain all information regarding an acquisition entity within a
time period that would permit independent auditors to prepare any required
audited financial information on a timely basis.


 


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 a Registration Statement with respect to such
Registrable Securities, respond as promptly as possible to any comments
received from the Commission, and use its reasonable best efforts to cause such
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)                                 subject
to Sections 2(b) and 2(c), prepare and file with the Commission such amendments
and supplements to such 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 such 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 each 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 such Registration Statement;


 


(d)                                 use
its commercially reasonable efforts to register or qualify the Purchaser’s
Registrable Securities covered by such 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 or take any action that would subject it to taxation in any
jurisdiction where it is not then subject;


 


(e)                                  list
the Registrable Securities covered by such 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


 


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(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.                                       Information
to be provided by each Holder.     The Company may require each Holder to furnish
to the Company such information regarding such Holder and the distribution of
such Holder’s Registrable Securities as the Company may from time to time
reasonably required for inclusion in a Registration Statement.  In
addition, each Holder shall complete, execute and deliver all such other
documents and undertakings as the Company may deem necessary or desirable for
purposes of compliance with Federal and state securities laws.  The
Company may exclude from a Registration Statement the Registrable Securities of
any Holder that fails to furnish such information or complete, execute or
deliver to the Company such other documents and undertakings within a
reasonable time (which in any event shall not exceed ten (10)  business days) after receiving the Company’s
request for same and the Company shall thereafter not have any obligation to
include such Registrable Securities in any Registration Statement.


 


5.                                      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 fees of the Company’s counsel) incurred
in connection with complying with state securities or “blue sky” laws, and fees
of the Company’s transfer agents and registrars reasonable fees of, and
disbursements incurred by, one counsel for the Holders (which fees and
disbursements of counsel shall not exceed more than $5,000 in the aggregate for
any Registration Statement),  are called
“Registration Expenses”. All selling commissions applicable to the sale of
Registrable Securities, and any fees and disbursements of any counsel to the
Holders are called “Selling Expenses.”  
The Company shall only be responsible for Registration Expenses.


 


6.                                      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
eachHolder, and its officers, directors and each other person, if any, who
controls such Holder within the meaning of the Securities Act, against any
losses, claims, damages or liabilities, joint or several, to which such Holder,
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 suchHolder, and each such other 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


 


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statement or alleged untrue statement or omission or alleged omission
so made in conformity with information furnished by or on behalf of anyHolder
or any officer, director of any other person, if any, who controls a
Holder,  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, eachHolder 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 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, or that arise out of any failure of such Holder to comply with
applicable propspectus delivery requirements or its covenants and agreements
contained in this Agreement or the Securities Purchase Agreement, and will
reimburse the Company and each such other 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, other than with respect to such Holder’s failure to comply with
applicable prospectus delivery requirements or its covenants contained in the
Securities Purchase Agreement or this Agreement, such Holder 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 ofsuch Holder
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 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 under this Section 6 and shall only
relieve it from any liability which it may have to such Indemnified Party under
this Section 6 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
reasonably 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


 


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Section 6 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 havebeen advised by counsel
that a conflict of interest is likely to exist if the same counsel were to
represent both the Indemnified Party and 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 (provided that the Indemnifying Party may
require such Indemnified Party to undertake to reimburse all such fees and
expenses to the extent it is finally judicially determined that such
Indemnified Party is not entitled to indemnification hereunder).  The Indemnifying Party shall not be liable
for any settlement of any such action effected without its written consent,
which consent shall not be unreasonably withheld.


 


(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) aHolder, or
any officer, director or controlling person of such Holder, makes a claim for
indemnification pursuant to this Section 6 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 6 provides for indemnification in such case, or (ii)
contribution under the Securities Act may be required on the part of such
Holder or such officer, director or controlling person of suchHolder in
circumstances for which indemnification of such Holder is provided under this
Section 6; then, and in each such case, the Company and the Holder 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 Holder 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 11(f) of the Act) will be
entitled to contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.


 


7.                                      Representations
and Warranties.


 


(a)                                  The
Common Stock of the Company is registered pursuant to Section 12(b) 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 Reports on Form 10-QSB for the fiscal quarters
ended March 31, 2003,June 30, 2003 and September 30, 2003 (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


 


9

















 


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 American Stock Exchange and, except
as described in Exchange Act Filings or the schedules to the Securities
Purchase Agreement,  satisfies all
requirements for the continuation of such listing. Except as described in
Exchange Act Filings or the schedules to the Securities Purchase Agreement, the
Company has not received any notice that its Common Stock will be delisted from
the American Stock Exchange 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.


 


10

















 


(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 each Note and exercise of the
Warrants.


 


8.                                      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.  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 Delay Period or 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. Any such notice of a Delay Period or a
Discontinuance Event shall be deemed, for purposes of the Securities Purchase
Agreement, the Notes and the Warrant and all other applicable agreements,
notice to the Purchaser (or other Holder) that the Prospectus contained in the
Registration Statement is not current. 
The Company may provide appropriate stop orders to enforce the
provisions of this paragraph.  For
purposes of


 


11

















 


this Section 8(c), 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 any Effectiveness Period there is not an effective Registration
Statement or Registration Statements covering all of the Registrable Securities
required to be covered during such Effectiveness Period 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 of any such Registrable Securities that are required
to be included in a Registration Statement, that are not then included, 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 at least fifty percent (50%)  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


 


12

















 


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 8(f).  Any notice or
request hereunder shall be given by registered or certified mail, return
receipt requested, hand delivery, overnight mail 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, and, in the case of a
telecopy, when confirmed.  The address
for such notices and communications shall be as follows:


 


	
  If to the Company:

  	
   

  	
  EQUIFIN, Inc.

  1011 Highway 71

  Spring Lake, New Jersey  07762

  Attention:  Walter M. Craig, Jr.,
  Chief Executive Officer

  Facsimile:732-282-1811

  

  With a copy to:

  Lee A. Albanese, Esq.

  St. John & Wayne, L.L.C.

  Two Penn Plaza East

  Newark, New Jersey 07105-2249

  

  Facsimile

  
	
   

  	
   

  	
   

  
	
  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 8(f) 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


 


13

















 


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 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.


 


14

















 


(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.]


 


15

















 


IN WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first
written above.


 


 


	
   

  	
  EQUIFIN, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LAURUS MASTER FUND, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  825 Third Avenue, 14th
  Floor

  New York, New York 10022

  Attention:  David Grin

  Facsimile:  212-541-4434

  
						



 


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