Document:

exv10w56

 

EXHIBIT 10.56

THE PAYMENT PROVISIONS OF THIS AGREEMENT ARE SUBJECT TO THE TERMS AND
PROVISIONS OF (i) THAT CERTAIN INTERCREDITOR AGREEMENT DATED OF EVEN DATE
HEREWITH BY AND AMONG THE COMPANY, THE PURCHASER AND WELLS FARGO FOOTHILL, INC.
AND (ii) ANY REPLACEMENT OR SUCCESSOR INTERCREDITOR AGREEMENT WITH ANY
REPLACEMENT OR SUCCESSOR SENIOR CREDITOR.

REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this “Agreement”) is made and entered
into as of October 14, 2004, by and between Acceris Communications Inc., a
Florida 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 (as
amended, modified or supplemented from time to time, the “Securities Purchase
Agreement”), and pursuant to the Note and the Warrant referred to therein.

     The Company and the Purchaser hereby agree as follows:

     1. Definitions. Capitalized terms used and not otherwise defined
herein that are defined in the Securities Purchase Agreement shall have the
meanings given such terms in the Securities Purchase Agreement. As used in
this Agreement, the following terms shall have the following meanings:

          “Commission” means the Securities and Exchange Commission.

          “Common Stock” means shares of the Company’s common stock, par value $0.01
per share.

          “Effectiveness Date” means (i) with respect to the initial Registration
Statement required to be filed hereunder, a date no later than ninety (90) days
following the date hereof (or, in the event that the Company receives comments
with respect to such initial Registration Statement from the SEC, a date no
later than one hundred twenty (120) days following the date hereof) and (ii)
with respect to each additional Registration Statement required to be filed
hereunder, a date no later than thirty (30) days following the applicable
Filing Date..

          “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 (i) the initial Registration
Statement required to be filed hereunder, a date no later than thirty (30) days
following the date hereof and (ii) with respect to shares of 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

Acceris Communications Confidential Materials

October 14, 2004

 

 

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 Common Stock issued upon the
conversion of the Note and issuable upon exercise of the Warrant.

          “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

Acceris Communications Confidential Materials

October 14, 2004

-2-

 

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 of even date herewith
between the parties hereto calling for the issuance by the Company of a
$5,000,000 convertible Note plus the Warrant.

          “Trading Market” means any of the NASD OTCBB, NASDAQ SmallCap Market, the
Nasdaq National Market, the American Stock Exchange or the New York Stock
Exchange.

          “Warrant” means the Common Stock purchase warrant to purchase up to
1,000,000 shares of the Company’s Common Stock issued to Purchaser on the date
hereof pursuant to the Securities Purchase Agreement.

     2. Registration.

     (a) On or prior to the Filing Date the Company shall prepare and
file with the Commission a Registration Statement covering the
Registrable Securities for an offering to be made on a continuous basis
pursuant to Rule 415. The Registration Statement shall be on Form SB-2
(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

Acceris Communications Confidential Materials

October 14, 2004

-3-

 

more than 20 consecutive calendar days (defined as a period of 365
days commencing on the date the Registration Statement is declared
effective); or (iv) the Common Stock is not listed or quoted, or is
suspended from trading on any Trading Market for a period of three (3)
consecutive Trading Days (provided the Company shall not have been able
to cure such trading suspension within 30 days of the notice thereof or
list the Common Stock on another Trading Market); (any such failure or
breach being referred to as an “Event,” and for purposes of clause (i) or
(ii) the date on which such Event occurs, or for purposes of clause (iii)
the date which such 30 day or 20 consecutive day period (as the case may
be) is exceeded, or for purposes of clause (iv) the date on which such
three (3) Trading Day period is exceeded, being referred to as “Event
Date”), then until the applicable Event is cured, the Company shall pay
to each Holder an amount in cash, as liquidated damages and not as a
penalty, equal to one and one half percent (1.50%) for each thirty (30)
day period (prorated for partial periods) on a daily basis of the
then-outstanding amount of the Note. While such Event continues, such
liquidated damages shall be paid not less often than each thirty (30)
days. Any unpaid liquidated damages as of the date when an Event has
been cured by the Company shall be paid within three (3) days following
the date on which such Event has been cured by the Company.

     (c) Within three business days of the Effectiveness Date, the
Company shall cause its counsel to issue a blanket opinion in the form
attached hereto as Exhibit A, to the transfer agent stating that
the shares are subject to an effective registration statement and can be
reissued free of restrictive legend upon notice of a sale by 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 best
efforts to cause the Registration Statement to become and remain
effective for the Effectiveness Period with respect thereto, and promptly
provide to the Purchaser copies of all filings and Commission letters of
comment relating thereto;

     (b) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the Prospectus used in
connection therewith as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all Registrable
Securities covered by the Registration Statement and to keep such
Registration Statement effective until the expiration of the
Effectiveness Period;

Acceris Communications Confidential Materials

October 14, 2004

-4-

 

     (c) furnish to the Purchaser such reasonable number of copies of the
Registration Statement and the Prospectus included therein (including
each preliminary Prospectus) as the Purchaser reasonably may request to
facilitate the public sale or disposition of the Registrable Securities
covered by the Registration Statement;

     (d) use its commercially reasonable efforts to register or qualify
the Purchaser’s Registrable Securities covered by the Registration
Statement under the securities or “blue sky” laws of such jurisdictions
within the United States as the Purchaser may reasonably request,
provided, however, that the Company shall not for any such purpose be
required to qualify generally to transact business as a foreign
corporation in any jurisdiction where it is not so qualified or to
consent to general service of process in any such jurisdiction;

     (e) list the Registrable Securities covered by the Registration
Statement with any securities exchange on which the Common Stock of the
Company is then listed;

     (f) immediately notify the Purchaser at any time when a Prospectus
relating thereto is required to be delivered under the Securities Act, of
the happening of any event of which the Company has knowledge as a result
of which the Prospectus contained in such Registration Statement, as then
in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading in light of the circumstances then
existing; and

     (g) upon the reasonable prior request of the Purchaser make
available for inspection by the Purchaser and any attorney, accountant or
other agent retained by the Purchaser, all publicly available,
non-confidential financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company’s
officers, directors and employees to supply all publicly available,
non-confidential information reasonably requested by the attorney,
accountant or agent of the Purchaser.

     4. Registration Expenses. All expenses relating to the Company’s
compliance with Sections 2 and 3 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses
(including reasonable counsel fees) incurred in connection with complying with
state securities or “blue sky” laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, fees of, and disbursements incurred by, one
counsel for the Holders (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.

Acceris Communications Confidential Materials

October 14, 2004

-5-

 

     (a) In the event of a registration of any Registrable Securities
under the Securities Act pursuant to this Agreement, the Company will
indemnify and hold harmless the Purchaser, and its officers, directors
and each other person, if any, who controls the Purchaser within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which the Purchaser, or such persons
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Registration Statement
under which such Registrable Securities were registered under the
Securities Act pursuant to this Agreement, any preliminary Prospectus or
final Prospectus contained therein, or any amendment or supplement
thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will
reimburse the Purchaser, and each such person for any reasonable legal or
other expenses incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case if and to
the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission so made in conformity with information
furnished by or on behalf of the Purchaser or any such person in writing
specifically for use in any such document.

     (b) In the event of a registration of the Registrable Securities
under the Securities Act pursuant to this Agreement, the Purchaser will
indemnify and hold harmless the Company, and its officers, directors and
each other person, if any, who controls the Company within the meaning of
the Securities Act, against all losses, claims, damages or liabilities,
joint or several, to which the Company or such persons may become subject
under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any
material fact which was furnished in writing by the Purchaser to the
Company expressly for use in (and such information is contained in) the
Registration Statement under which such Registrable Securities were
registered under the Securities Act pursuant to this Agreement, any
preliminary Prospectus or final Prospectus contained therein, or any
amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Company and each such person for any
reasonable legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action, provided, however, that the Purchaser will be liable in any such
case if and only to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission so made in conformity
with information furnished in writing to the Company by or on behalf of
the Purchaser specifically for use in any such document.
Notwithstanding the provisions of this paragraph, the Purchaser
shall not be required to indemnify any person or entity in excess of the
amount of the aggregate net

Acceris Communications Confidential Materials

October 14, 2004

-6-

 

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

Acceris Communications Confidential Materials

October 14, 2004

-7-

 

only for the portion represented by
the percentage that the public offering price of its securities offered
by the Registration Statement bears to the public offering price of all
securities offered by such Registration Statement, provided, however,
that, in any such case, (A) the Purchaser will not be required to
contribute any amount in excess of the public offering price of all such
securities offered by it pursuant to such Registration Statement; and (B)
no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 10(f) of the Act) will be entitled to contribution
from any person or entity who was not guilty of such fraudulent
misrepresentation.

     6. Representations and Warranties.

     (a) The Common Stock of the Company is registered pursuant to
Section 12(b) or 12(g) of the Exchange Act.

     (b) 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.

     (c) The Warrant, the Note and the shares of Common Stock which the
Purchaser may acquire pursuant to the Warrant 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.

     (d) 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.

     (e) 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

Acceris Communications Confidential Materials

October 14, 2004

-8-

 

otherwise interfere with the ability of the Company
to enter into and perform any of its obligations under this Agreement in
any material respect.

     (f) The Company will at all times have authorized and reserved a
sufficient number of shares of Common Stock for the full conversion of
the Note and exercise of the Warrant.

     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 (other than indirect, special, incidental
or consequential 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. Nothing contained herein
or elsewhere in this Agreement, or in the Securities Purchase Agreement
or any other Related Agreement, prohibits, or shall be construed or
deemed to prohibit, the grant by the Company, subsequent to the date
hereof, of any registration rights with respect to any of its Securities
issued in compliance with the provisions of the Securities Purchase
Agreement, or the exercise of any such registration rights by the holders
thereof.

     (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

Acceris Communications Confidential Materials

October 14, 2004

-9-

 

orders to enforce the provisions
of this paragraph. For purposes of this Section 7(d), a “Discontinuation
Event” shall mean (i) when the Commission notifies the Company whether
there will be a “review” of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement (the
Company shall provide true and complete copies thereof and all written
responses thereto to each of the Holders); (ii) any request by the
Commission or any other Federal or state governmental authority for
amendments or supplements to such Registration Statement or Prospectus or
for additional information; (iii) the issuance by the Commission of any
stop order suspending the effectiveness of such Registration Statement
covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for
sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose; and/or (v) the occurrence of any event or
passage of time that makes the financial statements included in such
Registration Statement ineligible for inclusion therein or any statement
made in such Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in
any material respect or that requires any revisions to such Registration
Statement, Prospectus or other documents so that, in the case of such
Registration Statement or Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were
made, not misleading.

     (e) Piggy-Back Registrations. If at any time during the
Effectiveness Period there is not an effective Registration Statement
covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration
statement relating to an offering for its own account or the account of
others under the Securities Act of any of its equity securities, other
than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued
solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other
employee benefit plans, then the Company shall send to each Holder
written notice of such determination and, if within fifteen days after
receipt of such notice, any such Holder shall so request in writing, the
Company shall use commercially reasonable efforts to 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

Acceris Communications Confidential Materials

October 14, 2004

-10-

 

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). Attempted delivery of any notice or request hereunder by
electronic transmission (including, but not limited to, electronic mail)
or communications through the internet shall not constitute delivery
hereunder. 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:

Acceris Communications Confidential Materials

October 14, 2004

-11-

 

	 	 	 
	If to the Company:

	 	Acceris Communications, Inc.
	

	 	Scotia Plaza
	

	 	40 King Street, Suite 3200
	

	 	Toronto, Ontario, Canada M5H 3Y2
	

	 	 
	

	 	Attention: Chief Financial Officer
	

	 	Facsimile: 416-866-3050
	 
	 	 
	

	 	with a copy to:
	

	 	Acceris Communications, Inc.
	

	 	8813 Ridge Road
	

	 	Bethesda Maryland 20817-3235
	 
	 	 
	

	 	Attention: David Silverman
	

	 	Facsimile: 345-949-3638
	 
	 	 
	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

	 	To the address of such Holder as it
	then the registered Holder:

	 	appears in the stock transfer books of the
	

	 	Company

or such other address as may be designated in writing hereafter in
accordance with this Section 7(g) by such Person.

     (h) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and permitted assigns
of each of the parties and shall inure to the benefit of each Holder. The
Company may not assign its rights or obligations hereunder without the
prior written consent of each Holder. Each Holder may assign their
respective rights hereunder in the manner and to the Persons as permitted
under the Notes and the 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

Acceris Communications Confidential Materials

October 14, 2004

-12-

 

Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this
Agreement shall be commenced exclusively in the state and federal courts
sitting in the City of New York, Borough of Manhattan. Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, Borough of Manhattan for
the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any Proceeding, any claim
that it is not personally subject to the jurisdiction of any such court,
that such Proceeding is improper. Each party hereto hereby irrevocably
waives personal service of process and consents to process being served
in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by
law. Each party hereto hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence a
Proceeding to enforce any provisions of a Transaction Document, then the
prevailing party in such Proceeding shall be reimbursed by the other
party for its reasonable attorneys fees and other costs and expenses
incurred with the investigation, preparation and prosecution of such
Proceeding.

     (k) Cumulative Remedies. The remedies provided herein are
cumulative and not exclusive of any remedies provided by law.

     (l) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder
of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their
reasonable efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including
any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

     (m) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.

[Balance of page intentionally left blank;

signature page follows]

Acceris Communications Confidential Materials

October 14, 2004

-13-

 

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

	 	 	 
	ACCERIS COMMUNICATIONS INC.

	 	LAURUS MASTER FUND, LTD.
	 
	 	 

	 	 	 	 	 	 	 
	By:

	 	

	 	By:	 	

	Name:

	 	

	 	Name:
	 	

	Title:

	 	

	 	Title:
	 	

	 	 	 
	

	 	Address for Notices:
	 
	 	 
	

	 	825 Third Avenue — 14th Floor
	

	 	New York, NY 10022
	

	 	Attention: David Grin
	

	 	Facsimile: 212-541-4434

Acceris Communications Confidential Materials

October 14, 2004

-14-

 

EXHIBIT A

[Month       , 2004]

[Continental Stock Transfer

& Trust Company

Two Broadway

New York, NY 10004

Attn: William Seegraber]

	 	 	 
	Re:

	 	Acceris Communications, Inc. Registration
	

	 	Statement on Form S-1/SB-2

Ladies and Gentlemen:

     As counsel to Acceris Communications, Inc., a Florida corporation (the
“Company”), we have been requested to render our opinion to you in connection
with the resale by the individuals or entitles listed on Schedule A attached
hereto (the “Selling Stockholders”), of an aggregate of [amount]shares (the
“Shares”) of the Company’s Common Stock.

     A Registration Statement on Form S-1/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]

Acceris Communications Confidential Materials

October 14, 2004

-15-

 

Schedule A

	 	 	 
	Selling
Stockholder

	 	Shares

Being Offeredexv10w57

 

EXHIBIT 10.57

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE
OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT
AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY
NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT
UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO ACCERIS
COMMUNICATIONS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

Right to Purchase up to 1,000,000 Shares of Common Stock of

Acceris Communications Inc.

(subject to adjustment as provided herein)

COMMON STOCK PURCHASE WARRANT

	 	 	 
	No. L1

	 	Issue Date: October 14, 2004

     ACCERIS COMMUNICATIONS INC., a corporation organized under the laws of the
State of Florida (“ACRS”), hereby certifies that, for value received, LAURUS
MASTER FUND, LTD., or assigns (the “Holder”), is entitled, subject to the terms
set forth below, to purchase from the Company (as defined herein) from and
after the Issue Date of this Warrant and at any time or from time to time
before 5:00 p.m., New York time, through the earlier of (i) close of business
October 13, 2009 and (ii) the date on which the average closing price of ACRS
Common Stock for any ten consecutive trading days shall equal or exceed
fifteen (15) times the Exercise Price (below) (the “Expiration Date”), up to
1,000,000 fully paid and nonassessable shares of Common Stock (as hereinafter
defined), $0.01 par value per share, at the applicable Exercise Price per share
(as defined below). The number and character of such shares of Common Stock
and the applicable Exercise Price per share are subject to adjustment as
provided herein.

     As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:

     (a) The term “Company” shall include ACRS and any corporation which
shall succeed, or assume the obligations of, ACRS hereunder.

     (b) The term “Common Stock” includes (i) the Company’s Common Stock,
par value $0.01 per share; and (ii) any other securities into which or
for which any of the securities described in (a) may be converted or
exchanged pursuant to a plan of recapitalization, reorganization, merger,
sale of assets or otherwise.

     (c) The term “Other Securities” refers to any stock (other than
Common Stock) and other securities of the Company or any other person
(corporate or otherwise) which the holder of the Warrant at any time
shall be entitled to receive, or shall have received, on the exercise of
the Warrant, in lieu of or in addition to Common Stock, or

Acceris Communications Confidential Materials

October 14, 2004

 

 

which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities
pursuant to Section 4 or otherwise.

     (d) The “Exercise Price” applicable under this Warrant shall be as
follows:

     (i) a price of $1.00 (which price is 125% of the average
closing price of Common Stock for the ten (10) trading days
immediately prior to the date hereof) for the first 250,000 shares
acquired hereunder;

     (ii) a price of $1.08 (which price is 135% of the average
closing price of Common Stock for the ten (10) trading days
immediately prior to the date hereof) for the next 250,000 shares
acquired hereunder; and

     (iii) a price of $1.20 (which price is 150% of the average
closing price of Common Stock for the ten (10) trading days
immediately prior to the date hereof) for any additional shares
acquired hereunder.

     2. Exercise of Warrant.

               2.1 Number of Shares Issuable upon Exercise. From and after the
date hereof through and including the Expiration Date, the Holder shall be
entitled to receive, upon exercise of this Warrant in whole or in part, by
delivery of an original or fax copy of an exercise notice in the form attached
hereto as Exhibit A (the “Exercise Notice”), up to 1,000,000 shares of Common
Stock of the Company, subject to adjustment pursuant to Section 4.

               2.2 Fair Market Value. For purposes hereof, the “Fair Market
Value” of a share of Common Stock as of a particular date (the “Determination
Date”) shall mean:

     (a) If the Company’s Common Stock is traded on the American Stock
Exchange or another national exchange or is quoted on the National or
SmallCap Market of The Nasdaq Stock Market, Inc.(“Nasdaq”), then the
closing or last sale price, respectively, reported for the last business
day immediately preceding the Determination Date.

     (b) If the Company’s Common Stock is not traded on the American
Stock Exchange or another national exchange or on the Nasdaq but is
traded on the NASD OTC Bulletin Board, then the mean of the average of
the closing bid and asked prices reported for the last business day
immediately preceding the Determination Date.

     (c) Except as provided in clause (d) below, if the Company’s Common
Stock is not publicly traded, then as the Holder and the Company agree or
in the absence of agreement by arbitration in accordance with the rules
then in effect of the American Arbitration Association, before a single
arbitrator to be chosen from a panel of persons qualified by education
and training to pass on the matter to be decided.

     (d) If the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a liquidation,
dissolution or winding up pursuant to the Company’s charter, then all amounts to be payable per share
to holders of the

Acceris Communications Confidential Materials

October 14, 2004

-2-

 

Common Stock pursuant to the charter in the event of
such liquidation, dissolution or winding up, plus all other amounts to be
payable per share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all of the shares of Common Stock then issuable upon exercise of the Warrant are
outstanding at the Determination Date.

               2.3 Intentionally omitted.

               2.4 Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the holders of the Warrant
pursuant to Subsection 3.2, such bank or trust company shall have all the
powers and duties of a warrant agent (as hereinafter described) and shall
accept, in its own name for the account of the Company or such successor person
as may be entitled thereto, all amounts otherwise payable to the Company or
such successor, as the case may be, on exercise of this Warrant pursuant to
this Section 1.

     3. Procedure for Exercise.

               3.1 Delivery of Stock Certificates, Etc., on Exercise. The Company
agrees that the shares of Common Stock purchased upon exercise of this Warrant
shall be deemed to be issued to the Holder as the record owner of such shares
as of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares in accordance herewith. As soon
as practicable after the exercise of this Warrant in full or in part, and in
any event within three (3) business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder, or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise.

               3.2 Exercise. Payment may be made either (i) in cash or by
certified or official bank check payable to the order of the Company equal to
the applicable aggregate Exercise Price, (ii) with respect to fifty percent
(50%) of the number of shares of Common Stock issuable upon exercise of this
Warrant, by delivery of the Warrant, or shares of Common Stock and/or Common
Stock receivable upon exercise of the Warrant in accordance with the formula
set forth below, or (iii) by a combination of any of the foregoing methods, for
the number of Common Shares specified in such Exercise Notice (as such exercise
number shall be adjusted to reflect any adjustment in the total number of
shares of Common Stock issuable to the Holder per the terms of this Warrant)
and the Holder shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully-paid and non-assessable shares of Common
Stock (or Other Securities) determined as provided herein. Notwithstanding any
provisions herein to the contrary, if the Fair Market Value of one share of
Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of
exercising this Warrant for cash, the Holder may elect to receive shares equal
to the value (as determined below) of this Warrant (or

Acceris Communications Confidential Materials

October 14, 2004

-3-

 

the portion thereof
being exercised) by surrender of this Warrant at the principal office of the
Company together with the properly endorsed Exercise Notice in which event the
Company shall issue to the Holder a number of shares of Common Stock computed
using the following formula:

	 	 	 
	X=Y

	 	(A-B)
	

	 	
 
	

	 	   A
	 
	 	 
	Where X =

	 	the number of shares of Common Stock to be issued to the
Holder
	 
	 	 
	Y =

	 	the number of shares of Common Stock purchasable under the
Warrant or, if only a portion of the Warrant is being exercised, the
portion of the Warrant being exercised (at the date of such
calculation)
	 
	 	 
	A =

	 	the Fair Market Value of one share of the Company’s Common
Stock (at the date of such calculation)
	 
	 	 
	B =

	 	Exercise Price (as adjusted to the date of such
calculation)

     4. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

               4.1 Reorganization, Consolidation, Merger, Etc. In case at any
time or from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any
plan or arrangement contemplating the dissolution of the Company, then, in each
such case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder of this
Warrant, on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and
property (including cash) to which such Holder would have been entitled upon
such consummation or in connection with such dissolution, as the case may be,
if such Holder had so exercised this Warrant, immediately prior thereto, all
subject to further adjustment thereafter as provided in Section 4.

               4.2 Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, concurrently with any distributions made to holders of its Common
Stock, shall at its expense deliver or cause to be delivered to the Holder the
stock and other securities and property (including cash, where applicable)
receivable by the Holder of the Warrant pursuant to Section 3.1, or, if the
Holder shall so instruct the Company, to a bank or trust company specified by
the Holder and having its principal office in New York, NY as trustee for the
Holder of the Warrant (the “Trustee”).

               4.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall
be applicable to the shares of stock and other securities and property
receivable on the exercise of this Warrant after the consummation of such
reorganization, consolidation or merger or the effective date of dissolution
following any such transfer, as the case may be, and shall be binding upon the
issuer

Acceris Communications Confidential Materials

October 14, 2004

-4-

 

of any such stock or other securities, including, in the case of any
such transfer, the person acquiring all or substantially all of the properties
or assets of the Company, whether or not such person shall have expressly
assumed the terms of this Warrant as provided in Section 4. In the event this
Warrant does not continue in full force and effect after the consummation of
the transactions described in this Section 3, then the Company’s securities and
property (including cash, where applicable) receivable by the Holders of the
Warrant will be delivered to Holder or the Trustee as contemplated by Section
3.2.

     5. Extraordinary Events Regarding Common Stock. In the event that
the Company shall (a) issue additional shares of the Common Stock as a dividend
or other distribution on outstanding Common Stock, (b) subdivide its
outstanding shares of Common Stock, or (c) combine its outstanding shares of
the Common Stock into a smaller number of shares of the Common Stock, then, in
each such event, the Exercise Price shall, simultaneously with the happening of
such event, be adjusted by multiplying the then Exercise Price by a fraction,
the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such event and the denominator of which shall
be the number of shares of Common Stock outstanding immediately after such
event, and the product so obtained shall thereafter be the Exercise Price then
in effect. The Exercise Price, as so adjusted, shall be readjusted in the same
manner upon the happening of any successive event or events described herein in
this Section 4. The number of shares of Common Stock that the holder of this
Warrant shall thereafter, on the exercise hereof as provided in Section 1, be
entitled to receive shall be increased to a number determined by multiplying
the number of shares of Common Stock that would otherwise (but for the
provisions of this Section 4) be issuable on such exercise by a fraction of
which (a) the numerator is the Exercise Price that would otherwise (but for the
provisions of this Section 4) be in effect, and (b) the denominator is the
Exercise Price in effect on the date of such exercise.

     6. Certificate as to Adjustments. In each case of any adjustment
or readjustment in the shares of Common Stock (or Other Securities) issuable on
the exercise of the Warrant, upon the prior written request of the Holder,
the Company at its expense will promptly cause its Chief Financial Officer or
other appropriate designee to compute such adjustment or readjustment in
accordance with the terms of the Warrant and prepare a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon
which such adjustment or readjustment is based, including a statement of (a)
the consideration received or receivable by the Company for any additional
shares of Common Stock (or Other Securities) issued or sold or deemed to have
been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the holder of the Warrant and any
Warrant agent of the Company (appointed pursuant to Section 11 hereof).

     7. Reservation of Stock, Etc., Issuable on Exercise of Warrant.
The Company will at all times reserve and keep available, solely for issuance
and delivery on the exercise of the Warrant, shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of the Warrant.

Acceris Communications Confidential Materials

October 14, 2004

-5-

 

     8. Assignment; Exchange of Warrant. Subject to compliance with
applicable securities laws, this Warrant, and the rights evidenced hereby, may
be transferred by any registered holder hereof (a “Transferor”) in whole or in
part. On the surrender for exchange of this Warrant, with the Transferor’s
endorsement in the form of Exhibit B attached hereto (the “Transferor
Endorsement Form”) and together with evidence reasonably satisfactory to the
Company demonstrating compliance with applicable securities laws, which shall
include, without limitation, the provision of a legal opinion from the
Transferor’s counsel (at the Company’s expense) that such transfer is exempt
from the registration requirements of applicable securities laws, and with
payment by the Transferor of any applicable transfer taxes) will issue and
deliver to or on the order of the Transferor thereof a new Warrant of like
tenor, in the name of the Transferor and/or the transferee(s) specified in such
Transferor Endorsement Form (each a “Transferee”), calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for
on the face or faces of the Warrant so surrendered by the Transferor.

     9. Replacement of Warrant. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this
Warrant, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of this Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

     10. Registration Rights. The Holder of this Warrant has been
granted certain registration rights by the Company. These registration rights
are set forth in a Registration Rights Agreement entered into by the Company
and Holder dated as of even date of this Warrant.

     11. Maximum Exercise. The Holder shall not be entitled to exercise
this Warrant on an exercise date, in connection with that number of shares of
Common Stock which would be in excess of the sum of (i) the number of shares of
Common Stock beneficially owned by the Holder and its affiliates on an exercise
date, and (ii) the number of shares of Common Stock issuable upon the exercise
of this Warrant with respect to which the determination of this proviso is
being made on an exercise date, which would result in beneficial ownership by
the Holder and its affiliates of more than 4.99% of the outstanding shares of
Common Stock of the Company on such date. For the purposes of the proviso to
the immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13d-3 thereunder. Notwithstanding the foregoing, the
restriction described in this paragraph may be revoked upon 75 days prior
notice from the Holder to the Company and is automatically null and void upon
an Event of Default under the Note made by the Company to the Holder dated the
date hereof (as amended, modified or supplemented from time to time, the
“Note”).

     12. Warrant Agent. The Company may, by written notice to the each
Holder of the Warrant, appoint an agent for the purpose of issuing Common Stock
(or Other Securities) on the exercise of this Warrant pursuant to Section 1,
exchanging this Warrant pursuant to Section 7, and replacing this Warrant
pursuant to Section 8, or any of the foregoing, and thereafter any such

Acceris Communications Confidential Materials

October 14, 2004

-6-

 

issuance, exchange or replacement, as the case may be, shall be made at such
office by such agent.

     13. Transfer on the Company’s Books. Until this Warrant is
transferred on the books of the Company, the Company may treat the registered
holder hereof as the absolute owner hereof for all purposes, notwithstanding
any notice to the contrary.

     14. Notices, Etc. All notices and other communications from the
Company to the Holder of this Warrant shall be mailed by first class registered
or certified mail, postage prepaid, at such address as may have been furnished
to the Company in writing by such Holder or, until any such Holder furnishes to
the Company an address, then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.

     15. Miscellaneous. This Warrant and any term hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought. This Warrant shall be governed by and construed in
accordance with the laws of State of New York without regard to principles of
conflicts of laws. Any action brought concerning the transactions contemplated
by this Warrant shall be brought only in the state courts of New York or in the
federal courts located in the state of New York; provided, however, that the
Holder may choose to waive this provision and bring an action outside the state
of New York. The individuals executing this Warrant on behalf of the Company
agree to submit to the jurisdiction of such courts and waive trial by jury.
The prevailing party shall be entitled to recover from the other party its
reasonable attorney’s fees and costs. In the event that any provision of this
Warrant is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any such provision which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision
of this Warrant. The headings in this Warrant are for purposes of reference
only, and shall not limit or otherwise affect any of the terms hereof. The
invalidity or unenforceability of any provision hereof shall in no way affect
the validity or enforceability of any other provision hereof. The Company and
the holder each acknowledge that its respective legal counsel participated in
the preparation of this Warrant and, therefore, stipulates that the rule of
construction that ambiguities are to be resolved against the drafting party
shall not be applied in the interpretation of this Warrant to favor any party
against the other party.

[Balance of page intentionally left blank;

signature page follows.]

Acceris Communications Confidential Materials

October 14, 2004

-7-

 

     IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
first written above.

	 	 	 	 	 	 	 
	 	 	ACCERIS COMMUNICATIONS INC.
	 
	 	 	 	 	 	 
	

	 	By:

Name:

Title:
	 	

	 	 

Acceris Communications Confidential Materials

October 14, 2004

-8-

 

Exhibit A

FORM OF SUBSCRIPTION

(To Be Signed Only On Exercise Of Warrant)

	 	 	 	 	 	 	 
	TO:	 	ACCERIS COMMUNICATIONS INC.
	

	 	Attention:
	 	Chief Financial Officer	 	 

     The undersigned, pursuant to the provisions set forth in the attached
Warrant (No.                   ), hereby irrevocably elects to purchase (check applicable
box):

	 	 	 
	                   

	 	_________ shares of the Common Stock covered by such Warrant; or
	 
	 	 
	                   

	 	the maximum number of shares of Common Stock covered by such Warrant pursuant
to the cashless exercise procedure set forth in Section 2.

     The undersigned herewith makes payment of the full Exercise Price for such
shares at the price per share provided for in such Warrant, which is
$_______. Such payment takes the form of (check applicable box or boxes):

	 	 	 
	                   

	 	$                    in lawful money of the United States; and/or
	 
	 	 
	                   

	 	the cancellation of such portion of the attached Warrant as is exercisable for
a total of                    shares of Common Stock (using a Fair Market Value of
$                    per share for purposes of this calculation); and/or
	 
	 	 
	                   

	 	the cancellation of such number of shares of Common Stock as is necessary, in
accordance with the formula set forth in Section 2.2, to exercise this Warrant
with respect to the maximum number of shares of Common Stock purchasable
pursuant to the cashless exercise procedure set forth in Section 2.

     The undersigned requests that the certificates for such shares be issued
in the name of, and delivered to                                                           whose address is                                                                             .

     The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant
shall be made pursuant to registration of the Common Stock under the Securities
Act of 1933, as amended (the “Securities Act”) or pursuant to an exemption from
registration under the Securities Act.

	 	 	 	 	 
	Dated:                                       	 	

(Signature must conform to name of holder as specified on the face
of the Warrant)
	 
	 	 	 	 
	

	 	Address:
	 	

Acceris Communications Confidential Materials

October 14, 2004

A-1

 

Exhibit B

FORM OF TRANSFEROR ENDORSEMENT

(To Be Signed Only On Transfer Of Warrant)

     For value received, the undersigned hereby sells, assigns, and transfers
unto the person(s) named below under the heading “Transferees” the right
represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of ACCERIS COMMUNICATIONS INC. into which the within
Warrant relates specified under the headings “Percentage Transferred” and
“Number Transferred,” respectively, opposite the name(s) of such person(s) and
appoints each such person Attorney to transfer its respective right on the
books of ACCERIS COMMUNICATIONS INC. with full power of substitution in the
premises.

	 	 	 	 	 	 	 
	 	 	 	 	Percentage	 	 
	Transferees
	 	Address
	 	Transferred
	 	Number Transferred

	 
	

	 	

	 	

	 	

	

	 	

	 	

	 	

	

	 	

	 	

	 	

	

	 	

	 	

	 	

	 	 	 	 	 
	Dated:                                       	 	

	 	 	(Signature must conform to name of holder as
specified on the face of the Warrant)
	 
	 	 	 	 
	

	 	Address:
	 	

	

	 	 	 	

	 	 	SIGNED IN THE PRESENCE OF:
	 
	 	 	 	 
	 	 	

	

	 	(Name)
	 
	 	 	 	 
	ACCEPTED AND AGREED:
	 	 	 	 
	[TRANSFEREE]
	 	 	 	 
	                                      
	 	 	 	 
	              (Name)
	 	 	 	 

Acceris Communications Confidential Materials

October 14, 2004

B-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00072-of-00352.parquet"}]]