-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C+dOwWs3Xh7WOyfMRgmTw8HeJs36+rlg/maANIB4SP8eC75wu/3PjmCxvUzRVYUt qRiUWWZZ8kyMsjG0CTof8w== 0001125282-05-002342.txt : 20050505 0001125282-05-002342.hdr.sgml : 20050505 20050505165655 ACCESSION NUMBER: 0001125282-05-002342 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 28 CONFORMED PERIOD OF REPORT: 20050429 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant ITEM INFORMATION: Triggering Events That Accelerate or Increase a Direct Financial Obligation under an Off-Balance Sheet Arrangement ITEM INFORMATION: Unregistered Sales of Equity Securities ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050505 DATE AS OF CHANGE: 20050505 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EPIXTAR CORP CENTRAL INDEX KEY: 0001099730 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 650722193 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15489 FILM NUMBER: 05804319 BUSINESS ADDRESS: STREET 1: 11900 BISCAYNE BLVD SUITE 262 CITY: MIAMI STATE: FL ZIP: 33181 BUSINESS PHONE: 3055038600 MAIL ADDRESS: STREET 1: 11900 BISCAYNE BLVD SUITE 262 CITY: MIAMI STATE: FL ZIP: 33181 FORMER COMPANY: FORMER CONFORMED NAME: GLOBAL ASSET HOLDINGS INC DATE OF NAME CHANGE: 19991124 8-K 1 b406530_8k.txt CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report April 29, 2005 (Date of earliest event reported) EPIXTAR CORP. (Exact Name of Registrant as Specified in Its Charter) Florida (State or Other Jurisdiction of Incorporation) 011-15489 65-0722193 (Commission File Number) (IRS Employer Identification No.) 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 -------------- ----- (Address of Principal Executive Offices) (Zip Code) (305) 503-8600 -------------- (Registrant's Telephone Number, Including Area Code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 1.01 Entry into a Material Definitive Agreement. On April 29, 2005, Epixtar Corp., and its majority-owned subsidiary, Voxx Corporation, entered into a financing facility with Laurus Master Fund, Ltd and affiliates of Laidlaw & Company (UK) Ltd., pursuant to which Epixtar and Voxx borrowed $7,000,000 represented by Senior Secured Convertible Notes (the "Notes") that mature on April 29, 2008, bear interest at the rate of prime + 2% per year, and are amortizable beginning on October 29, 2005 at the monthly rate of $166,667 plus accrued but unpaid interest. Payments may, in certain circumstances, be made in shares of Epixtar and/or Voxx common stock. The Notes may be prepaid at any time at 130% of the then outstanding principal balance due at the time of prepayment. The Notes are secured by all of the assets of Voxx Corporation and its subsidiaries, Epixtar's shareholdings in Voxx Corporation and significantly all of its other subsidiaries, by a pledge of Epixtar and Voxx's contract revenues from certain sources and by certain other assets of Epixtar and its subsidiaries. The Notes significantly restrict the ability of Epixtar, Voxx and their subsidiaries from borrowing additional monies without the consent of the lenders. The Notes are convertible into the common stock of Epixtar at $1.00 per share and/or into the common stock of Voxx in the event Voxx conducts an initial public offering of its own securities at a 15% discount to the IPO price. As additional consideration for the making of the loan, the lenders received options to purchase 31% or 4,167,028 shares of Voxx Corporation common stock computed on a fully diluted basis at the time of closing at a price of $.001 per share, warrants to purchase 556,596 shares of Voxx common stock at a price, generally, equal to the IPO price, and payments and reimbursements to the lenders and related parties of approximately $640,000. The options and warrants both provide the holder with anti-dilution protection in the event of stock splits, stock dividends and other extraordinary corporate events. The remaining proceeds of the loan were used by Epixtar to repay $1,100,000 of outstanding debt with the balance reserved to continue the build out of Voxx Corporation's Philippine -based contact center facilities and for general corporate purposes. As a condition of the making of this loan, Epixtar was also required to amend the terms of its existing $5,000,000 loan facility with Laurus to reprice 492,827 warrants for Epixtar common stock issued in connection with that facility from $4.05-$4.66 per share to $1.00 per share and to further secure that facility with certain additional contract revenues from Epixtar's ISP business. Item 2.03 Creation of a Direct Financial Obligation of the Registrant See Item 1.01 above. The Notes provide that it is an "event of default" in the event of, among other things, non-payment, a breach of a covenant or any other agreement made by the borrowers in the note purchase agreements, the appointment of a receiver, an unsatisfied money judgment against one of the borrowers or any of their subsidiaries in excess of $150,000 for more than 30 days, a change in control of Epixtar or Voxx (other than in connection with a Voxx IPO), the institution of a government regulatory proceeding which prevents the borrowers from utilizing a substantial portion of their assets , or the occurrence of an "event of default" in certain other agreements to which the borrowers are parties. If an "event of default" should occur and continue beyond any applicable grace period, 110% of the then outstanding principal balance of the Notes plus accrued but unpaid interest becomes immediately due and payable. Item 2.04 Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement. See Item 1.01 above. As a result of the transaction described in Item 1.01 above, certain rights to acquire, or to convert certain debt obligations of Epixtar Corp. and Voxx Corporation into, shares of common stock of Epixtar Corp. and/or Voxx Corporation that were outstanding at the time of such transaction will be modified by (i) increasing the number of such shares which may be acquired upon the exercise of such rights or the conversion of such obligations and (ii) reducing the price of such shares at which such acquisition or conversion is effected. Epixtar Corp. will make information regarding the extent of such modifications available to its shareholders when it has completed the process of determining the exact amount of such modifications. -2- Item 3.02 Unregistered Sales of Equity Securities See Item 1.01 above. As described in Item 1.01 above, the $7,000,000 loan is convertible into Epixtar's common stock at $1.00 per share or Voxx common stock at a price equal to 85% of the IPO price and included the issuance of options and warrants to acquire shares of Epixtar's principal subsidiary, Voxx Corporation, at $.001 per share and the IPO price, respectively. All of these securities were issued and sold pursuant to Section 4(2) of the Securities Act of 1933, as amended, as securities sold by an issuer in a transaction "not involving any public offering." The transaction was privately negotiated with representatives of accredited investors with whom Epixtar had pre-existing business relationships only and did not involve any general solicitation or advertising. Item 9.01 Financial Statements and Exhibits The following exhibits are included herewith: 4.13.1 Amendment and Agreement between Epixtar Corp. and Laurus Master Fund 4.13.2 Epixtar Voxx Securities Purchase Agreement for Laurus Master Fund 4.13.3 Epixtar Voxx Secured Convertible Term Note 4.13.4 Epixtar Voxx Master Security Agreement 4.13.5 Epixtar Registration Rights Agreement 4.13.6 Voxx Registration Rights Agreement 4.13.7 Stock Pledge Agreement 4.13.8 Common Stock Purchase Warrant 4.13.9 Laurus/Laidlaw InterCreditor and Collateral Agency Agreement 4.13.10 Option to Purchase Voxx Common Stock 4.13.11 Guaranty 4.13.12 Funds Escrow Agreement 4.13.13 Epixtar Voxx Securities Purchase Agreement for Laidlaw 4.13.14 Master Securities Agreement 4.13.15 Secured Convertible Term Note I 4.13.16 Secured Convertible Term Note II 4.13.17 Secured Convertible Term Note III 4.13.18 Secured Convertible Term Note IV 4.13.19 Voxx Option I 4.13.20 Voxx Option II 4.13.21 Voxx Option III 4.13.22 Voxx Option IV 4.13.23 Common Stock Purchase Warrant 4.13.24 Epixtar Registration Rights Agreement 4.13.25 Voxx Registration Rights Agreement 4.13.26 Stock Pledge Agreement 4.13.27 Guaranty -3- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized. EPIXTAR CORP. (Registrant) Date: May 5, 2005 By /s/ IRVING GREENMAN ------------------------------ Irving Greenman Its Chief Financial Officer INDEX TO EXHIBITS 4.13.1 Amendment and Agreement between Epixtar Corp. and Laurus Master Fund 4.13.2 Epixtar Voxx Securities Purchase Agreement for Laurus Master Fund 4.13.3 Epixtar Voxx Secured Convertible Term Note 4.13.4 Epixtar Voxx Master Security Agreement 4.13.5 Epixtar Registration Rights Agreement 4.13.6 Voxx Registration Rights Agreement 4.13.7 Stock Pledge Agreement 4.13.8 Common Stock Purchase Warrant 4.13.9 Laurus/Laidlaw InterCreditor and Collateral Agency Agreement 4.13.10 Option to Purchase Voxx Common Stock 4.13.11 Guaranty 4.13.12 Funds Escrow Agreement 4.13.13 Epixtar Voxx Securities Purchase Agreement for Laidlaw 4.13.14 Master Securities Agreement 4.13.15 Secured Convertible Term Note I 4.13.16 Secured Convertible Term Note II 4.13.17 Secured Convertible Term Note III 4.13.18 Secured Convertible Term Note IV 4.13.19 Voxx Option I 4.13.20 Voxx Option II 4.13.21 Voxx Option III 4.13.22 Voxx Option IV 4.13.23 Common Stock Purchase Warrant 4.13.24 Epixtar Registration Rights Agreement 4.13.25 Voxx Registration Rights Agreement 4.13.26 Stock Pledge Agreement 4.13.27 Guaranty EX-4.13.1 2 b406530ex4_13-1.txt EXHIBIT 4.13.1 Exhibit 4.13.1 AMENDMENT AND AGREEMENT This Amendment and Agreement (this "AMENDMENT"), dated as of April 29, 2005, is entered into by and between EPIXTAR CORP., a Florida corporation (the "COMPANY"), and LAURUS MASTER FUND, LTD., a Cayman Islands company ("LAURUS"), for the purpose of amending the terms of (i) the Secured Convertible Term Note, dated May 14, 2004 (as amended, modified or supplemented from time to time, the "TERM NOTE") issued by the Company to Laurus, (ii) the Common Stock Purchase Warrant I, dated May 14, 2004 (as amended, modified or supplemented from time to time, "WARRANT I") issued by the Company to Laurus, (iii) the Common Stock Purchase Warrant II, dated May 14, 2004 (as amended, modified or supplemented from time to time, "WARRANT II") issued by the Company to Laurus, (iv) the Common Stock Purchase Warrant, dated August 27, 2004 (as amended, modified or supplemented from time to time, "AUGUST 2004 WARRANT") issued by the Company to Laurus, (v) the Common Stock Purchase Warrant, dated February 28, 2005 (as amended, modified or supplemented from time to time, "FEBRUARY 2005 WARRANT" and, together with Warrant I, Warrant II, the August 2004 Warrant and the February 2005 Warrant, the "WARRANTS" and each, a "WARRANT") issued by the Company to Laurus, (vi) the Securities Purchase Agreement, dated as of May 14, 2004, by and between the Company and Laurus (as amended, modified or supplemented from time to time, the "PURCHASE AGREEMENT") and (vii) that certain Registration Rights Agreement, dated as of May 28, 2004, by and between the Company and Laurus (as amended, modified or supplemented from time to time, the "REGISTRATION RIGHTS AGREEMENT"). Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Term Note. WHEREAS, the Company and Laurus have agreed to make certain changes to the Term Note, the Warrants and the Registration Rights Agreement as set forth herein; NOW, THEREFORE, in consideration of the above, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: 1. Section 2.1(a) of the Term Note is hereby amended by deleting the last sentence thereof and inserting the following new sentence in lieu thereof: "For purposes hereof, the "FIXED CONVERSION PRICE" means $1.00, subject to further adjustment as set forth herein." 2. Laurus and the Company hereby agree that the "Exercise Price" under and defined in each Warrant is hereby amended to mean $1.00, subject to further adjustment after the date hereof as provided in each of said Warrants. 3. The Company hereby agrees to add to its pending Registration Statement originally filed with the SEC on June 18, 2004 a sufficient number of shares that would be convertible into Common Stock of the Company assuming the full conversion of the Term Note (after giving effect to any adjustments to the Fixed Conversion Price (as defined in the Term Note) made in accordance with Section 1 of this Amendment) and the complete exercise of all Common Stock Purchase Warrants issued to Laurus by the Company (after giving effect to any adjustments to the exercise price set forth in such warrants made in accordance with Section 2 of this Amendment. Any failure to so include such shares shall constitute an "Event" as set forth in clause (i) of Section 2(b) of the Registration Rights Agreement. Furthermore, the Company and Laurus hereby agree that all Warrants shall be included with the definition of "Warrants" set forth in the Registration Rights Agreement. 4. The Company and Laurus hereby agree that notwithstanding anything to the contrary contained in Warrant II, the "Effective Date", under and as defined in Warrant II, occurred on July 6, 2004. 5. The Company hereby represents and warrants to Laurus that (i) each agency that the Company and its Subsidiaries (as defined in the Purchase Agreement) utilize to bill accounts receivable owed to the Company and its Subsidiaries and related to the Company and its subsidiaries' internet service provider ("ISP") business ("ISP Accounts Receivable") are set forth on Schedule I hereto (collectively, the "Existing Billing Agencies" and each, an "Existing Billing Agency"), (ii) all ISP Accounts Receivable are collected by the Existing Billing Agencies, and (iii) each Existing Billing Agency has been irrevocably instructed by the Company and/or the applicable Subsidiary of the Company to direct all ISP Accounts Receivable, and all reserves, holdbacks or similar amounts (each a "Reserve" and collectively, the "Reserves") maintained by such Existing Billing Agencies to the extent no longer required by such Existing Billing Agencies, to the Reserve Restricted Account (as defined in the Reserve Restricted Account referred to in Purchase Agreement). 6. The Company and the Amendment Subsidiaries (as defined below) hereby assign all amounts collected in the Reserve Restricted Account to secure the Obligations (as defined in each of the Master Security Agreement referred to in the Purchase Agreement (as amended, modified or supplemented from time to time, the "2004 Master Security Agreement") and the Master Security Agreement referred to in the 2005 Purchase Agreement (as amended, modified or supplemented from time to time, the "2005 Master Security Agreement")) owed to Laurus (collectively, the "Laurus Obligations"), and the Company and the Amendment Subsidiaries hereby agree that all such amounts shall be maintained in the Reserve Restricted Account until such date (the "Work Station Date") as one thousand (1,000) additional work stations have become Operational (as defined below) in the call centers of Voxx Corporation and/or its Subsidiaries located in the Phillippines. Upon the occurrence of the Work Station Date, so long as no Event of Default has occurred and is continuing under, and as defined in, any of (i) the Term Note, the Purchase Agreement or any Related Agreement referred to in the Purchase Agreement or (ii) that certain Secured Term Note issued by the Company and Voxx Corporation, a Florida corporation ("Voxx"), to Laurus on the date hereof (as amended, modified or supplemented from time to time, the "2005 Term Note"), the Purchase Agreement referred to in the 2005 Term Note (as amended, modified or supplemented from time to time, the "2005 Purchase Agreement") or any Related Agreement referred to in the 2005 Purchase Agreement, the amounts maintained in the Reserve Restricted Account shall be as promptly as practicable distributed as follows (such date of distribution, the "Distribution Date"): (i) 50% of such amounts shall be distributed to Laurus to repay the Laurus Obligations in any order that Laurus may elect (without being subject to a prepayment penalty referred to in Section 2.3 of the Term Note) and (ii) the remainder of such amounts shall be distributed to the Company. Furthermore, after the Distribution Date, the Company and the applicable Subsidiaries shall instruct the Billing Agencies to deposit 50% of all ISP Accounts Receivable and 100% of all Reserves into the Reserve Restricted Account to be held as security for the Laurus Obligations; provided that the Company and the Amendment Subsidiaries hereby agree that Laurus may withdraw amounts from the Reserve Restricted Account at any time to repay overdue amounts that are owed by the Company or any of its Subsidiaries to Laurus. Furthermore, the Company and the Amendment Subsidiaries hereby agree that, notwithstanding the foregoing, at any time upon the occurrence and during the continuance of an Event of Default, Laurus may withdraw amounts from the Reserve Restricted Account and apply such amounts to repay the Laurus Obligations in accordance with the terms of each of the aforementioned Master Security Agreements. For the purposes of this Amendment, "Operational" shall mean, with respect to any individual work station in a call center of Voxx Corporation and/or any of its Subsidiaries located in the Phillippines, such work station is enabled to receive or make calls consistent with the design and business intent of the call centers, in each case in a manner reasonably satisfactory to Laurus 7. Notwithstanding anything to the contrary contained in the Purchase Agreement, the Term Note or any Related Agreement referred to in the Purchase Agreement, the Company hereby agrees that it shall not, and shall not permit any of its Subsidiaries to, without the consent of Laurus, instruct or agree with any Existing Billing Agency or, following the establishment thereof, any Additional Billing Agency (as defined below), to (i) direct any proceeds of any ISP Accounts Receivable or any Reserve to any location other than to the Escrow Account or (ii) modify the calculation with respect to the amount of any Reserve required to be returned to the Company or such Subsidiary, as the case may be, and placed in the Escrow Account (or, in each case, the procedure therefore). The Company agrees to notify, and cause its Subsidiaries to notify, the Purchaser in the event that any of the Company or any of its Subsidiaries intends to enter into a relationship with a billing agency other than the Existing Billing Agencies (such billing agency, an "Additional Billing Agency" and, together with the Existing Billing Agencies, the "Billing Agencies") to collect ISP Accounts Receivable. In such an event, the Company hereby agrees to, and to cause the applicable Subsidiary to, execute documentation in form and substance satisfactory to Laurus, redirecting ISP Accounts Receivables and Reserves maintained by such an Additional Billing Agency to the Escrow Account (or such other deposit account agreed to by Laurus in writing) and have such documentation acknowledged and agreed to by such Additional Billing Agency. 8. The Company, Voxx and Laurus hereby agree that, simultaneously with the occurrence of an initial public offering of the common stock of Voxx, Laurus shall have the option (but shall not be required) to convert all outstanding Obligations (as defined in the 2004 Master Security Agreement) into the common stock of Voxx at a conversion price equal to 70% of the price of the common stock of Voxx offered in such an initial public offering. 9. The Company hereby agrees that any violation by the Company or any of its Subsidiaries of any agreement made by the Company contained in this Amendment, or any misrepresentation by the Company of any representation or warranty contained in this Amendment shall, in each case, constitute an "Event of Default" under, and as defined in, each of (i) the Term Note, the Purchase Agreement, the Related Agreements referred to in the Purchase Agreement and (ii) the 2005 Term Note, the 2005 Purchase Agreement and any Related Agreement referred to in the 2005 Purchase Agreement. 10. Article IV of the Term Note is hereby amended by deleting Section 4.12 thereof and inserting the following new Section 4.12 in lieu thereof: "4.12 2005 Note, Sands Documents and Related Agreements. An Event of Default, under and as defined in any of (i) that certain Secured Convertible Term Note, dated April __, 2005, issued by EPXR and Voxx Corporation, a Florida corporation, to the Holder (as amended, modified or supplemented from time to time, the "2005 Note"), (ii) the Purchase Agreement referred to in the 2005 Note (as amended, modified or supplemented from time to time, the "2005 Purchase Agreement"), (iii) the Related Agreements referred to in the 2005 Purchase Agreement, (iv) the Sands Securities Purchase Agreement (as defined in the 2005 Purchase Agreement) or (v) the Related Agreements referred to in the Sands Securities Purchase Agreement, shall have occurred and be continuing." 11. This Amendment shall be effective as of the date hereof following the execution and delivery of same by each of the Company, each Subsidiary of the Company set forth below (each, an "Amendment Subsidiary" and, collectively, the "Amendment Subsidiaries") and Laurus. 12. Except as specifically set forth in this Amendment, there are no other amendments to the Term Note, the Purchase Agreement, any Warrant or the Registration Rights Agreement, and all of the other forms, terms and provisions of such documents remain in full force and effect. 13. The Company hereby represents and warrants to Laurus that as of the date hereof, after giving effect to this Amendment, (i) no Event of Default has occurred and is continuing and (ii) all representations, warranties and covenants made by Company and its Subsidiaries in connection with the Term Note, the Purchase Agreement, the Warrants, the Registration Rights Agreement and the Related Agreements referred to in the Purchase Agreement are true, correct and complete and all of Company's and its Subsidiaries' covenant requirements set forth in such documents have been met. 14. This Amendment shall be binding upon the parties hereto and their respective successors and permitted assigns and shall inure to the benefit of and be enforceable by each of the parties hereto and its successors and permitted assigns. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. This Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument. * * * * IN WITNESS WHEREOF, each of the Company, the Amendment Subsidiaries and Laurus has caused this Amendment to be effective and signed in its name effective as of the date set forth above. EPIXTAR CORP. By: /s/ Ilene Kaminsky ------------------ Name: Ilene Kaminsky Title: CEO NOL GROUP, INC. By: /s/ Deborah Gambone ------------------- Name: Deborah Gambone Title: Vice President NATIONAL ONLINE SERVICES, INC. By: /s/ Deborah Gambone ------------------- Name: Deborah Gambone Title: Vice President LIBERTY ONLINE SERVICES, INC. By: /s/ Deborah Gambone ------------------- Name: Deborah Gambone Title: Vice President AMERIPAGES, INC. By: /s/ Deborah Gambone ------------------- Name: Deborah Gambone Title: Vice President B2B ADVANTAGE, INC. By: /s/ Deborah Gambone ------------------- Name: Deborah Gambone Title: Vice President EPIXTAR INTERNATIONAL CONTACT CENTER GROUP, INC. By: /s/ Ilene Kaminsky ------------------ Name: Ilene Kaminsky Title: CEO VOXX CORPORATION By: /s/ Ilene Kaminsky ------------------ Name: Ilene Kaminsky Title: CEO EPIXTAR MARKETING CORP. By: /s/ Ilene Kaminsky ------------------ Name: Ilene Kaminsky Title: CEO LAURUS MASTER FUND, LTD. By: /s/ Authorized Officer ---------------------- Name: Title: EX-4.13.2 3 b406530ex4_13-2.txt EXHIBIT 4.13.2 EXHIBIT 4.13.2 EPIXTAR CORP. VOXX CORPORATION SECURITIES PURCHASE AGREEMENT APRIL 29, 2005 TABLE OF CONTENTS
PAGE 1. Agreement to Sell and Purchase...........................................................................2 2. Fees and Option..............................................................ERROR! BOOKMARK NOT DEFINED. 3. Closing, Delivery and Payment............................................................................3 3.1 Closing.......................................................................................3 3.2 Delivery......................................................................................3 4. Representations and Warranties of the Company............................................................3 4.1 Organization, Good Standing and Qualification.................................................3 4.2 Subsidiaries..................................................................................4 4.3 Capitalization; Voting Rights.................................................................4 4.4 Authorization; Binding Obligations............................................................5 4.5 Liabilities...................................................................................6 4.6 Agreements; Action............................................................................6 4.7 Obligations to Related Parties................................................................6 4.8 Changes.......................................................................................7 4.9 Title to Properties and Assets; Liens, Etc....................................................8 4.10 Intellectual Property.........................................................................9 4.11 Compliance with Other Instruments.............................................................9 4.12 Litigation...................................................................................10 4.13 Tax Returns and Payments.....................................................................10 4.14 Employees....................................................................................10 4.15 Registration Rights and Voting Rights........................................................11 4.16 Compliance with Laws; Permits................................................................11 4.17 Environmental and Safety Laws................................................................11 4.18 Valid Offering...............................................................................12 4.19 Full Disclosure..............................................................................12 4.20 Insurance....................................................................................12 4.21 SEC Reports..................................................................................12 4.22 Listing......................................................................................13 4.23 No Integrated Offering.......................................................................13 4.24 Stop Transfer................................................................................13 4.25 Dilution.....................................................................................13 4.26 Patriot Act..................................................................................12 5. Representations and Warranties of the Purchaser.........................................................14 5.1 No Shorting..................................................................................14 5.2 Requisite Power and Authority................................................................14 5.3 Investment Representations...................................................................14 5.4 Purchaser Bears Economic Risk................................................................15 5.5 Acquisition for Own Account..................................................................15 5.6 Purchaser Can Protect Its Interest...........................................................15 5.7 Accredited Investor..........................................................................15 5.8 Legends......................................................................................15
i 6. Covenants of the Company................................................................................17 6.1 Stop-Orders..................................................................................17 6.2 Listing......................................................................................17 6.3 Market Regulations...........................................................................17 6.4 Reporting Requirements.......................................................................17 6.5 Use of Funds.................................................................................18 6.6 Access to Facilities.........................................................................18 6.7 Taxes........................................................................................18 6.8 Insurance....................................................................................18 6.9 Intellectual Property........................................................................19 6.10 Properties...................................................................................19 6.11 Confidentiality..............................................................................20 6.12 Required Approvals...........................................................................20 6.13 Reissuance of Securities.....................................................................22 6.14 Opinion......................................................................................22 6.15 Margin Stock.................................................................................21 6.16 Foreign Security.............................................................................21 6.17 Right of First Refusal.......................................................................21 6.18 Voxx Common Stock............................................................................21 7. Covenants of the Purchaser..............................................................................24 7.1 Confidentiality..............................................................................24 7.2 Non-Public Information.......................................................................24 7.3 Limitation on Acquisition of Common Stock....................................................23 8. Covenants of the Company and Purchaser Regarding Indemnification........................................24 8.1 Company Indemnification......................................................................24 8.2 Purchaser's Indemnification..................................................................25 9. Conversion of Convertible Note..........................................................................25 9.1 Mechanics of Conversion......................................................................25 10. Registration Rights.....................................................................................26 10.1 Registration Rights Granted..................................................................26 10.2 Offering Restrictions........................................................................26 11. Miscellaneous...........................................................................................27 11.1 Governing Law................................................................................27 11.2 Survival.....................................................................................28 11.3 Successors...................................................................................28 11.4 Entire Agreement.............................................................................28 11.5 Severability.................................................................................28 11.6 Amendment and Waiver.........................................................................28 11.7 Delays or Omissions..........................................................................29 11.8 Notices......................................................................................29 11.9 Attorneys' Fees..............................................................................30 11.10 Titles and Subtitles.........................................................................30 11.11 Facsimile Signatures; Counterparts...........................................................30 11.12 Broker's Fees................................................................................30 11.13 Construction.................................................................................30
ii
LIST OF EXHIBITS - ---------------------------------------------------------------------------------------------------------------------- Form of Convertible Term Note....................................................................... Exhibit A Form of Option...................................................................................... Exhibit B-1 Form of Warrant Exhibit B-2 Form of Opinion..................................................................................... Exhibit C Form of Escrow Agreement............................................................................ Exhibit D
iii SECURITIES PURCHASE AGREEMENT THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is made and entered into as of April 29, 2005 by and among EPIXTAR CORP., a Florida corporation ("EPXR"), VOXX CORPORATION, a Florida corporation ("VOXX") (EPXR and VOXX, collectively, the "Company"), and Laurus Master Fund, Ltd., a Cayman Islands company (the "Purchaser"). RECITALS WHEREAS, the Company has authorized the sale to the Purchaser of a Convertible Term Note in the aggregate principal amount of Five Million Five Hundred Thousand Dollars ($5,500,000) (as amended, modified or supplemented from time to time, the "Note"), which Note is convertible into shares of either EPXR's common stock, $0.001 par value per share ("EPXR Common Stock") or VOXX's common stock, $0.001 par value per share ("VOXX Common Stock" and, together with the EPXR Common Stock, "Common Stock"), at the fixed conversion price set forth in the Note ("Fixed Conversion Price"); WHEREAS, the Company wishes to issue a warrant to the Purchaser to purchase up to 229,187 shares of VOXX's Common Stock (subject to adjustment as set forth therein) in connection with Purchaser's purchase of the Note (as amended, modified or supplemented from time to time, the "Warrant"); WHEREAS, the Company wishes to issue an option to the Purchaser to purchase up to 3,274,094 shares of VOXX's Common Stock (subject to adjustment as set forth therein) in connection with Purchaser's purchase of the Note (as amended, modified or supplemented from time to time, the "Option"); WHEREAS, Purchaser desires to purchase the Note, the Warrant and the Option on the terms and conditions set forth herein; and WHEREAS, the Company desires to issue and sell the Note, the Warrant and Option to Purchaser on the terms and conditions set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises, representations, warranties and covenants hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Agreement to Sell and Purchase. Pursuant to the terms and conditions set forth in this Agreement, on the Closing Date (as defined in Section 3), the Company agrees to sell to the Purchaser, and the Purchaser hereby agrees to purchase from the Company, a Note in the aggregate principal amount of $5,500,000 convertible in accordance with the terms thereof into shares of the Company's Common Stock in accordance with the terms of the Note and this Agreement. The Note purchased on the Closing Date shall be known as the "Offering." A form of the Note is annexed hereto as Exhibit A. The Note will mature on the Maturity Date (as defined in the Note). Collectively, the Note, the Warrant and the Option and Common Stock issuable in payment of the Note, upon conversion of the Note and upon exercise of the Warrant and the Option are referred to as the "Securities." 2. Fees and Option. On the Closing Date: (a) VOXX will issue and deliver to the Purchaser an Option to purchase up to 3,274,094 shares of VOXX Common Stock pursuant to Section 1 hereof. The Option must be delivered on the Closing Date. A form of the Option is annexed hereto as Exhibit B-1. All the representations, covenants, warranties, undertakings, and indemnification, and other rights made or granted to or for the benefit of the Purchaser by the Company are hereby also made and granted in respect of the Option and shares of VOXX Common Stock issuable upon exercise of the Option (the "Option Shares"). (b) The Company will issue and deliver to the Purchaser a Warrant to purchase up to 229,187 shares of VOXX Common Stock pursuant to Section 1 hereof. The Warrant must be delivered on the Closing Date. A form of the Warrant is annexed hereto as Exhibit B-2. All the representations, covenants, warranties, undertakings, and indemnification, and other rights made or granted to or for the benefit of the Purchaser by the Company are hereby also made and granted in respect of the Option and shares of the VOXX's Common Stock issuable upon exercise of the Warrant (the "Warrant Shares"). (c) Subject to the terms of Section 2(d) below, the Company shall pay to Laurus Capital Management, LLC, the manager of the Purchaser, a closing payment in an amount equal to three and one-half percent (3.50%) of the aggregate principal amount of the Note. The foregoing fee is referred to herein as the "Closing Payment." (d) The Company shall reimburse the Purchaser for its reasonable expenses for services rendered to the Purchaser in preparation of this Agreement and the Related Agreements (as hereinafter defined), and expenses incurred in connection with the Purchaser's due diligence review of the Company and all related matters. Amounts required to be paid under this Section 2(d), to the extent not yet paid, shall be paid by the Company on the Closing Date. The total amount to be paid by the Company pursuant to this clause (c) shall be $30,000. (e) The Closing Payment, the expenses referred to in clause (c) of this Section 2 (net of deposits previously paid by the Company) shall be paid at closing out of funds held pursuant to a Funds Escrow Agreement of even date herewith among the Company, Purchaser, and an Escrow Agent (the "Funds Escrow Agreement") and a disbursement letter (the "Disbursement Letter"). 2 3. Closing, Delivery and Payment; Certain Closing Conditions. 3.1 Closing. Subject to the terms and conditions herein, the closing of the transactions contemplated hereby (the "Closing"), shall take place on the date hereof, at such time or place as the Company and Purchaser may mutually agree (such date is hereinafter referred to as the "Closing Date"). 3.2 Delivery. Pursuant to the Funds Escrow Agreement in the form attached hereto as Exhibit C, at the Closing on the Closing Date, the Company will deliver to the Purchaser, among other things, a Note in the form attached as Exhibit A representing the aggregate principal amount of $5,500,000 and Option in the form attached as Exhibit B-1 in the Purchaser's name representing an aggregate amount of 3,274,094 Option Shares and a Warrant in form attached as Exhibit B-2 in the Purchaser's name representing an aggregate amount of 229,187 Warrant Shares and the Purchaser will deliver to the Company, among other things, the amounts set forth in the Disbursement Letter by certified funds or wire transfer. 3.3 Sands Documents. The Purchaser shall be satisfied with the terms and conditions of each Sands Document (as defined in the Intercreditor Agreement (as defined below)) and all agreements related thereto. 4. Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchaser as follows (which representations and warranties are supplemented by the Company's filings under the Securities Exchange Act of 1934 (collectively, the "Exchange Act Filings"), copies of which have been provided to the Purchaser): 4.1 Organization, Good Standing and Qualification. Each of the Company and each of its Subsidiaries is a corporation, partnership or limited liability company, as the case may be, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Each of the Company and each of its Subsidiaries has the corporate power and authority to own and operate its properties and assets, to execute and deliver (i) this Agreement, (ii) the Note, the Warrant and the Option to be issued in connection with this Agreement, (iii) the Master Security Agreement dated as of the date hereof between the Company, certain Subsidiaries of the Company and the Purchaser (as amended, modified or supplemented from time to time, the "Master Security Agreement"), (iv) the EPXR Registration Rights Agreement relating to the Securities dated as of the date hereof between EPXR and the Purchaser, (v) the VOXX Registration Rights Agreement relating to the Securities dated as of the date hereof between VOXX and the Purchaser, (vi) the Guaranty dated as of the date hereof made by the Company and certain Subsidiaries of the Company (as amended, modified or supplemented from time to time, the "Guaranty"), (vii) the Stock Pledge Agreement dated as of the date hereof among the Company, certain Subsidiaries of the Company and the Purchaser (as amended, modified or supplemented from time to time, the "Stock Pledge Agreement"), (viii) the Escrow Agreement dated as of the date hereof among the Company, the Purchaser and the escrow agent referred to therein, (ix) the Intercreditor and Collateral Agency Agreement dated as of the date hereof between the Purchaser and and the Sands Creditors referred to therein, and acknowledged and agreed to by the Company (as amended, modified or supplemented from time to time, the "Intercreditor Agreement"), (x) the Foreign Documentation (as defined below) and (xi) all other agreements related to this Agreement and the Note and referred to herein (the preceding clauses (ii) through (xi), collectively, the "Related Agreements"), to issue and sell the Note and the shares of Common Stock issuable upon conversion of the Note (the "Note Shares"), to issue and sell the Option and the Option Shares, to issue and sell the Warrant and the Warrant Shares, and to carry out the provisions of this Agreement and the Related Agreements and to carry on its business as presently conducted. Each of the Company and each of its Subsidiaries is duly qualified and is authorized to do business and is in good standing as a foreign corporation, partnership or limited liability company, as the case may be, in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so has not, or could not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets, liabilities, condition (financial or otherwise), properties, operations or prospects of the Company and it Subsidiaries, taken individually and as a whole (a "Material Adverse Effect"). 3 4.2 Subsidiaries. Each direct and indirect Subsidiary of the Company, the direct owner of such Subsidiary and its percentage ownership thereof, is set forth on Schedule 4.2. No Immaterial Subsidiary owns any assets (other than immaterial assets) or has any significant operations. For the purpose of this Agreement, (x) a "Subsidiary" of any person or entity means (i) a corporation or other entity whose shares of stock or other ownership interests having ordinary voting power (other than stock or other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation, or other persons or entities performing similar functions for such person or entity, are owned, directly or indirectly, by such person or entity or (ii) a corporation or other entity in which such person or entity owns, directly or indirectly, more than 50% of the equity interests at such time and (y) the "Immaterial Subsidiaries" shall mean, collectively, Epixtar Communications Corp., a Florida corporation, Epixtar Prepaid Communications Corp., a Delaware corporation, Epixtar Solutions Corp., a Delaware corporation, IMS International, Inc., a Phillippines corporation, Epixtar International Contact Centers, Ltd., a Mauritius corporation, Epixtar Information Technology Private, Ltd., a Calcutta corporation, Epixtar International Contact Center Group, Ltd., a Bermuda corporation, and each Subsidiary of the Company that is not a Credit Party and does not own any assets (other than immaterial assets) or have any significant operations. 4.3 Capitalization; Voting Rights. (a) The authorized capital stock of EPXR, as of the date hereof consists of 60,000,000 shares, of which 50,000,000 are shares of EPXR Common Stock, par value $0.001 per share, 12,150,356 shares of which are issued and outstanding, and 10,000,000 are shares of preferred stock, par value $0.001 per share of which 16,500 shares of preferred stock are issued and outstanding. The authorized capital stock of VOXX, as of the date hereof consists of 50,250,000 shares, of which 50,000,000 are shares of VOXX Common Stock, par value $.001 per share, 6,900,000 shares of which are issued and outstanding, and 250,000 are shares of preferred stock, par value $.001 per share of which 0 shares of preferred stock are issued and outstanding. The authorized capital stock of each Subsidiary of EPXR (other than VOXX) is set forth on Schedule 4.3. 4 (b) Except as disclosed on Schedule 4.3, other than: (i) the shares reserved for issuance under the Company's stock option plans; and (ii) shares which may be granted pursuant to this Agreement and the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or arrangements or agreements of any kind for the purchase or acquisition from the Company of any of its securities. Except as disclosed on Schedule 4.3, neither the offer, issuance or sale of any of the Note, the Warrant or the Option, or the issuance of any of the Note Shares, the Warrant Shares or Option Shares, nor the consummation of any transaction contemplated hereby will result in a change in the price or number of any securities of the Company outstanding, under anti-dilution or other similar provisions contained in or affecting any such securities. (c) All issued and outstanding shares of the Company's Common Stock: (i) have been duly authorized and validly issued and are fully paid and nonassessable; and (ii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. (d) The rights, preferences, privileges and restrictions of the shares of the Common Stock are as stated in the Company's Certificate of Incorporation (the "Charter"). The Note Shares, the Warrant Shares and Option Shares have been duly and validly reserved for issuance. When issued in compliance with the provisions of this Agreement and the Company's Charter, the Securities will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances; provided, however, that the Securities may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. 4.4 Authorization; Binding Obligations. All corporate, partnership or limited liability company, as the case may be, action on the part of the Company and each of its Subsidiaries (including the respective officers and directors) necessary for the authorization of this Agreement and the Related Agreements, the performance of all obligations of the Company and its Subsidiaries hereunder and under the other Related Agreements at the Closing and, the authorization, sale, issuance and delivery of the Note, the Warrant and the Option has been taken or will be taken prior to the Closing. This Agreement and the Related Agreements, when executed and delivered and to the extent it is a party thereto, will be valid and binding obligations of each of the Company and each of its Subsidiaries, enforceable against each such entity in accordance with their terms, except: (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors' rights; and (b) general principles of equity that restrict the availability of equitable or legal remedies. 5 The sale of the Note and the subsequent conversion of the Note into Note Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with. Neither the issuance of the Warrant nor the Option nor the subsequent exercise of the Warrant for Warrant Shares nor the subsequent exercise of the Option for Option Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with. 4.5 Liabilities. Neither the Company nor any of its Subsidiaries has any contingent liabilities, except current liabilities incurred in the ordinary course of business and liabilities disclosed in any Exchange Act Filings. 4.6 Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) there are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company or any of its Subsidiaries is a party or by which it is bound which may involve: (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of $50,000 (other than obligations of, or payments to, the Company arising from agreements entered into in the ordinary course of business); or (ii) the transfer or license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company's products or services; or (iv) indemnification by the Company with respect to infringements of proprietary rights. (b) Since December 31, 2004, neither the Company nor any of its Subsidiaries has: (i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any person not in excess, individually or in the aggregate, of $100,000, other than ordinary course advances for travel expenses; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. (c) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. 4.7 Obligations to Related Parties. Except as set forth on Schedule 4.7, there are no obligations of the Company or any of its Subsidiaries to officers, directors, stockholders or employees of the Company or any of its Subsidiaries other than: 6 (a) for payment of salary for services rendered and for bonus payments; (b) reimbursement for reasonable expenses incurred on behalf of the Company and its Subsidiaries; (c) for other standard employee benefits made generally available to all employees (including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company); and (d) obligations listed in the Company's financial statements or disclosed in any of its Exchange Act Filings. Except as described above or set forth on Schedule 4.7, none of the officers, directors or, to the best of the Company's knowledge, key employees or stockholders of the Company or any members of their immediate families, are indebted to the Company, individually or in the aggregate, in excess of $50,000 or have any direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation which competes with the Company, other than passive investments in publicly traded companies (representing less than one percent (1%) of such company) which may compete with the Company. Except as described above, no officer, director or stockholder, or any member of their immediate families, is, directly or indirectly, interested in any material contract with the Company and no agreements, understandings or proposed transactions are contemplated between the Company and any such person. Except as set forth on Schedule 4.7, the Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation. 4.8 Changes. Since December 31, 2004, except as disclosed in any Exchange Act Filing or in any Schedule to this Agreement (including Schedule 4.8) or to any of the Related Agreements, there has not been: (a) any change in the business, assets, liabilities, condition (financial or otherwise), properties, operations or prospects of the Company or any of its Subsidiaries, which individually or in the aggregate has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; (b) any resignation or termination of any officer, key employee or group of employees of the Company or any of its Subsidiaries; (c) any material change, except in the ordinary course of business, in the contingent obligations of the Company or any of its Subsidiaries by way of guaranty, endorsement, indemnity, warranty or otherwise; (d) any damage, destruction or loss, whether or not covered by insurance, has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; (e) any waiver by the Company or any of its Subsidiaries of a valuable right or of a material debt owed to it; 7 (f) any direct or indirect loans made by the Company or any of its Subsidiaries to any stockholder, employee, officer or director of the Company or any of its Subsidiaries, other than advances made in the ordinary course of business; (g) any material change in any compensation arrangement or agreement with any employee, officer, director or stockholder of the Company or any of its Subsidiaries; (h) any declaration or payment of any dividend or other distribution of the assets of the Company or any of its Subsidiaries; (i) any labor organization activity related to the Company or any of its Subsidiaries; (j) any debt, obligation or liability incurred, assumed or guaranteed by the Company or any of its Subsidiaries, except those for immaterial amounts and for current liabilities incurred in the ordinary course of business; (k) any sale, assignment or transfer of any patents, trademarks, copyrights, trade secrets or other intangible assets owned by the Company or any of its Subsidiaries; (l) any change in any material agreement to which the Company or any of its Subsidiaries is a party or by which either the Company or any of its Subsidiaries is bound which either individually or in the aggregate has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; (m) any other event or condition of any character that, either individually or in the aggregate, has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; or (n) any arrangement or commitment by the Company or any of its Subsidiaries to do any of the acts described in subsection (a) through (m) above. 4.9 Title to Properties and Assets; Liens, Etc. Except as set forth on Schedule 4.9, each of the Company and each of its Subsidiaries has good and marketable title to its properties and assets, and good title to its leasehold estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than: (a) those resulting from taxes which have not yet become delinquent; (b) minor liens and encumbrances which do not materially detract from the value of the property subject thereto or materially impair the operations of the Company or any of its Subsidiaries; and (c) those that have otherwise arisen in the ordinary course of business. All facilities, machinery, equipment, fixtures, vehicles and other properties owned, leased or used by the Company and its Subsidiaries are in good operating condition and repair and are reasonably fit and usable for the purposes for which they are being used. Except as set forth on Schedule 4.9, the Company and its Subsidiaries are in compliance with all material terms of each lease to which it is a party or is otherwise bound. 8 4.10 Intellectual Property. (a) Each of the Company and each of its Subsidiaries owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes necessary for its business as now conducted and to the Company's knowledge, as presently proposed to be conducted (the "Intellectual Property"), without any known infringement of the rights of others. There are no outstanding options, licenses or agreements of any kind relating to the foregoing proprietary rights, nor is the Company or any of its Subsidiaries bound by or a party to any options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes of any other person or entity other than such licenses or agreements arising from the purchase of "off the shelf" or standard products. (b) Neither the Company nor any of its Subsidiaries has received any communications alleging that the Company or any of its Subsidiaries has violated any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity, nor is the Company or any of its Subsidiaries aware of any basis therefor. (c) The Company does not believe it is or will be necessary to utilize any inventions, trade secrets or proprietary information of any of its employees made prior to their employment by the Company or any of its Subsidiaries, except for inventions, trade secrets or proprietary information that have been rightfully assigned to the Company or any of its Subsidiaries. 4.11 Compliance with Other Instruments. Neither the Company nor any of its Subsidiaries is in violation or default of (x) any term of its Certificate of Incorporation or Bylaws, (y) any term of the Sands Documents (as defined in the Intercreditor Agreement) or (z) of any provision of any indebtedness, mortgage, indenture, contract, agreement or instrument to which it is party or by which it is bound or of any judgment, decree, order or writ, which violation or default, in the case of this clause (z), has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. The execution, delivery and performance of and compliance with this Agreement and the Related Agreements to which it is a party, and the issuance and sale of the Note by the Company and the other Securities by the Company each pursuant hereto and thereto, will not, with or without the passage of time or giving of notice, result in any such material violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or any of its Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to the Company, its business or operations or any of its assets or properties. 9 4.12 Litigation. Except as set forth on Schedule 4.12 hereto, there is no action, suit, proceeding or investigation pending or, to the Company's knowledge, currently threatened against the Company or any of its Subsidiaries that prevents the Company or any of its Subsidiaries from entering into this Agreement or the other Related Agreements, or from consummating the transactions contemplated hereby or thereby, or which has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect or any change in the current equity ownership of the Company or any of its Subsidiaries, nor is the Company aware that there is any basis to assert any of the foregoing. Neither the Company nor any of its Subsidiaries is a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no action, suit, proceeding or investigation by the Company or any of its Subsidiaries currently pending or which the Company or any of its Subsidiaries intends to initiate. 4.13 Tax Returns and Payments. Each of the Company and each of its Subsidiaries has timely filed all tax returns (federal, state and local) required to be filed by it. All taxes shown to be due and payable on such returns, any assessments imposed, and all other taxes due and payable by the Company or any of its Subsidiaries on or before the Closing, have been paid or will be paid prior to the time they become delinquent. Except as set forth on Schedule 4.13, neither the Company nor any of its Subsidiaries has been advised: (a) that any of its returns, federal, state or other, have been or are being audited as of the date hereof; or (b) of any deficiency in assessment or proposed judgment to its federal, state or other taxes. The Company has no knowledge of any liability of any tax to be imposed upon its properties or assets as of the date of this Agreement that is not adequately provided for. 4.14 Employees. Except as set forth on Schedule 4.14, neither the Company nor any of its Subsidiaries has any collective bargaining agreements with any of its employees. There is no labor union organizing activity pending or, to the Company's knowledge, threatened with respect to the Company or any of its Subsidiaries. Except as disclosed in the Exchange Act Filings or on Schedule 4.14, neither the Company nor any of its Subsidiaries is a party to or bound by any currently effective employment contract, deferred compensation arrangement, bonus plan, incentive plan, profit sharing plan, retirement agreement or other employee compensation plan or agreement. To the Company's knowledge, no employee of the Company or any of its Subsidiaries, nor any consultant with whom the Company or any of its Subsidiaries has contracted, is in violation of any term of any employment contract, proprietary information agreement or any other agreement relating to the right of any such individual to be employed by, or to contract with, the Company or any of its Subsidiaries because of the nature of the business to be conducted by the Company or any of its Subsidiaries; and to the Company's knowledge the continued employment by the Company or any of its Subsidiaries of its present employees, and the performance of the Company's and its Subsidiaries' contracts with its independent contractors, will not result in any such violation. Neither the Company nor any of its Subsidiaries is aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with their duties to the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries has received any notice alleging that any such violation has occurred. Except for employees who have a current effective employment agreement with the Company or any of its Subsidiaries, and the Company's CEO, no employee of the Company or any of its Subsidiaries has been granted the right to continued employment by the Company or any of its Subsidiaries or to any material compensation following termination of employment with the Company or any of its Subsidiaries. Except as set forth on Schedule 4.14, the Company is not aware that any officer, key employee or group of employees intends to terminate his, her or their employment with the Company or any of its Subsidiaries, nor does the Company or any of its Subsidiaries have a present intention to terminate the employment of any officer, key employee or group of employees. 10 4.15 Registration Rights and Voting Rights. Except as set forth on Schedule 4.15 and except as disclosed in Exchange Act Filings, neither the Company nor any of its Subsidiaries is presently under any obligation, and neither the Company nor any of its Subsidiaries has granted any rights, to register any of the Company's or its Subsidiaries' presently outstanding securities or any of its securities that may hereafter be issued. Except as set forth on Schedule 4.15 and except as disclosed in Exchange Act Filings, to the Company's knowledge, no stockholder of the Company or any of its Subsidiaries has entered into any agreement with respect to the voting of equity securities of the Company or any of its Subsidiaries. 4.16 Compliance with Laws; Permits. Neither the Company nor any of its Subsidiaries is in violation of any applicable statute, rule, regulation, order or restriction of any domestic or foreign government or any instrumentality or agency thereof in respect of the conduct of its business or the ownership of its properties which has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. No governmental orders, permissions, consents, approvals or authorizations are required to be obtained and no registrations or declarations are required to be filed in connection with the execution and delivery of this Agreement or any other Related Agreement and the issuance of any of the Securities, except such as has been duly and validly obtained or filed, or with respect to any filings that must be made after the Closing, as will be filed in a timely manner. Each of the Company and its Subsidiaries has all material franchises, permits, licenses and any similar authority necessary for the conduct of its business as now being conducted by it, the lack of which could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 4.17 Environmental and Safety Laws. Neither the Company nor any of its Subsidiaries is in violation of any applicable statute, law or regulation relating to the environment or occupational health and safety, and to its knowledge, no material expenditures are or will be required in order to comply with any such existing statute, law or regulation. Except as set forth on Schedule 4.17, no Hazardous Materials (as defined below) are used or have been used, stored, or disposed of by the Company or any of its Subsidiaries or, to the Company's knowledge, by any other person or entity on any property owned, leased or used by the Company or any of its Subsidiaries. For the purposes of the preceding sentence, "Hazardous Materials" shall mean: 11 (a) materials which are listed or otherwise defined as "hazardous" or "toxic" under any applicable local, state, federal and/or foreign laws and regulations that govern the existence and/or remedy of contamination on property, the protection of the environment from contamination, the control of hazardous wastes, or other activities involving hazardous substances, including building materials; or (b) any petroleum products or nuclear materials. 4.18 Valid Offering. Assuming the accuracy of the representations and warranties of the Purchaser contained in this Agreement, the offer, sale and issuance of the Securities will be exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), and will have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable state securities laws. 4.19 Full Disclosure. Each of the Company and each of its Subsidiaries has provided the Purchaser with all information requested by the Purchaser in connection with its decision to purchase the Note, the Warrant and the Option, including all information the Company and its Subsidiaries believe is reasonably necessary to make such investment decision. Neither this Agreement, the Related Agreements, the exhibits and schedules hereto and thereto nor any other document delivered by the Company or any of its Subsidiaries to Purchaser or its attorneys or agents in connection herewith or therewith or with the transactions contemplated hereby or thereby, contain any untrue statement of a material fact nor omit to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances in which they are made, not misleading. Any financial projections and other estimates provided to the Purchaser by the Company or any of its Subsidiaries were based on the Company's and its Subsidiaries' experience in the industry and on assumptions of fact and opinion as to future events which the Company or any of its Subsidiaries, at the date of the issuance of such projections or estimates, believed to be reasonable. 4.20 Insurance. Each of the Company and each of its Subsidiaries has general commercial, product liability, fire and casualty insurance policies with coverages which the Company believes are customary for companies similarly situated to the Company and its Subsidiaries in the same or similar business. 4.21 SEC Reports. Except as set forth on Schedule 4.21, the Company has filed all proxy statements, reports and other documents required to be filed by it under the Securities Exchange Act 1934, as amended (the "Exchange Act"). The Company has furnished the Purchaser with copies of: (i) its Annual Reports on Form 10-KSB for its fiscal year ended December 31, 2004, (ii) its Quarterly Report on Form 10-QSB for its fiscal quarter ended September 30, 2004 and (iii) the Form 8-K filings which it has made during the fiscal year 2005 to date (collectively, the "SEC Reports"). Except as set forth on Schedule 4.21, each SEC Report was, at the time of its filing, in substantial compliance with the requirements of its respective form and none of the SEC Reports, nor the financial statements (and the notes thereto) included in the SEC Reports, as of their respective filing dates, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 12 4.22 Listing. EPXR's Common Stock is listed for trading on the National Association of Securities Dealers Over the Counter Bulletin Board ("NASD OTCBB") and satisfies all requirements for the continuation of such trading. EPXR has not received any notice that EPXR's Common Stock will not be eligible to be traded on the NASD OTCBB or that EPXR's Common Stock does not meet all requirements for such trading. 4.23 No Integrated Offering. Neither the Company, nor any of its Subsidiaries or 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 this Agreement or any of the Related Agreements to be integrated with prior offerings by the Company (other than in connection with that certain offering made by the Company to the Sands Creditors (as defined in the Intercreditor Agreement) pursuant to that certain Securities Purchase Agreement, dated as of the date hereof (as amended, modified or supplemented from time to time, the "Sands Securities Purchase Agreement") and the Related Agreements referred to in the Sands Securities Purchase Agreement) for purposes of the Securities Act which would prevent the Company from selling the Securities 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. 4.24 Stop Transfer. The Securities are restricted securities as of the date of this Agreement. Neither the Company nor any of its Subsidiaries will issue any stop transfer order or other order impeding the sale and delivery of any of the Securities at such time as the Securities are registered for public sale or an exemption from registration is available, except as required by state and federal securities laws. 4.25 Dilution. The Company specifically acknowledges that its obligation to issue the shares of Common Stock upon conversion of the Note and exercise of the Warrant and the Option 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. 4.26 Patriot Act. The Company certifies that, to the best of Company's knowledge, neither the Company nor any of its Subsidiaries has been designated, and is not owned or controlled, by a "suspected terrorist" as defined in Executive Order 13224. The Company hereby acknowledges that the Purchaser seeks to comply with all applicable laws concerning money laundering and related activities. In furtherance of those efforts, the Company hereby represents, warrants and agrees that: (i) none of the cash or property that the Company or any of its Subsidiaries will pay or will contribute to the Purchaser has been or shall be derived from, or related to, any activity that is deemed criminal under United States law; and (ii) no contribution or payment by the Company or any of its Subsidiaries to the Purchaser, to the extent that they are within the Company's and/or its Subsidiaries' control shall cause the Purchaser to be in violation of the United States Bank Secrecy Act, the United States International Money Laundering Control Act of 1986 or the United States International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001. The Company shall promptly notify the Purchaser if any of these representations ceases to be true and accurate regarding the Company or any of its Subsidiaries. The Company agrees to provide the Purchaser any additional information regarding the Company or any of its Subsidiaries that the Purchaser deems necessary or convenient to ensure compliance with all applicable laws concerning money laundering and similar activities. The Company understands and agrees that if at any time it is discovered that any of the foregoing representations are incorrect, or if otherwise required by applicable law or regulation related to money laundering similar activities, the Purchaser may undertake appropriate actions to ensure compliance with applicable law or regulation, including but not limited to segregation and/or redemption of the Purchaser's investment in the Company. The Company further understands that the Purchaser may release confidential information about the Company and its Subsidiaries and, if applicable, any underlying beneficial owners, to proper authorities if the Purchaser, in its sole discretion, determines that it is in the best interests of the Purchaser in light of relevant rules and regulations under the laws set forth in subsection (ii) above. 13 5. Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company as follows (such representations and warranties do not lessen or obviate the representations and warranties of the Company set forth in this Agreement): 5.1 No Shorting. The Purchaser or any of its affiliates and investment partners has not, will not and will not cause any person or entity, directly or indirectly, to engage in "short sales" of the Company's Common Stock as long as the Note shall be outstanding. 5.2 Requisite Power and Authority. The Purchaser has all necessary power and authority under all applicable provisions of law to execute and deliver this Agreement and the Related Agreements and to carry out their provisions. All corporate action on Purchaser's part required for the lawful execution and delivery of this Agreement and the Related Agreements have been or will be effectively taken prior to the Closing. Upon their execution and delivery, this Agreement and the Related Agreements will be valid and binding obligations of Purchaser, enforceable in accordance with their terms, except: (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors' rights; and (b) as limited by general principles of equity that restrict the availability of equitable and legal remedies. 5.3 Investment Representations. Purchaser understands that the Securities are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Purchaser's representations contained in the Agreement, including, without limitation, that the Purchaser is an "accredited investor" within the meaning of Regulation D under the Securities Act of 1933, as amended (the "Securities Act"). The Purchaser confirms that it has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the Note, the Warrant and the Option to be purchased by it under this Agreement and the Note Shares, the Warrant Shares and the Option Shares acquired by it upon the conversion of the Note and the exercise of the Warrant and the Option, respectively. The Purchaser further confirms that it has had an opportunity to ask questions and receive answers from the Company regarding the Company's and its Subsidiaries' business, management and financial affairs and the terms and conditions of the Offering, the Note, the Option, the Warrant and the Securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to the Purchaser or to which the Purchaser had access. 14 5.4 Purchaser Bears Economic Risk. The Purchaser has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. The Purchaser must bear the economic risk of this investment until the Securities are sold pursuant to: (i) an effective registration statement under the Securities Act; or (ii) an exemption from registration is available with respect to such sale. 5.5 Acquisition for Own Account. The Purchaser is acquiring the Note, the Warrant and the Option and the Note Shares, the Warrant Shares and the Option Shares for the Purchaser's own account for investment only, and not as a nominee or agent and not with a view towards or for resale in connection with their distribution. 5.6 Purchaser Can Protect Its Interest. The Purchaser represents that by reason of its, or of its management's, business and financial experience, the Purchaser has the capacity to evaluate the merits and risks of its investment in the Note, the Option, the Warrant and the Securities and to protect its own interests in connection with the transactions contemplated in this Agreement and the Related Agreements. Further, Purchaser is aware of no publication of any advertisement in connection with the transactions contemplated in the Agreement or the Related Agreements. 5.7 Accredited Investor. Purchaser represents that it is an accredited investor within the meaning of Section 501(a)(3) of Regulation D under the Securities Act. 5.8 Legends. (a) The Note shall bear substantially the following legend: "THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE, STATE SECURITIES LAWS. THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE OR SUCH SHARES UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO EPIXTAR CORP. AND/OR VOXX CORPORATION, AS APPLICABLE, THAT SUCH REGISTRATION IS NOT REQUIRED." 15 (b) The Note Shares, the Warrant Shares and the Option Shares, if not issued by DWAC system (as hereinafter defined), shall bear a legend which shall be in substantially the following form until such shares are covered by an effective registration statement filed with the SEC: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO EPIXTAR CORP. AND/OR VOXX CORPORATION, AS APPLICABLE, THAT SUCH REGISTRATION IS NOT REQUIRED." (c) The Option shall bear substantially the following legend: "THIS OPTION AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THIS OPTION AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS OPTION MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS OPTION OR THE UNDERLYING SHARES OF COMMON STOCK UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO VOXX CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED." (d) The Warrant shall bear substantially the following legend: "THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON SHARES 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 OR THE UNDERLYING SHARES OF COMMON STOCK UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO VOXX CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED." 16 6. Covenants of the Company. The Company covenants and agrees with the Purchaser as follows: 6.1 Stop-Orders. The Company will advise the Purchaser, promptly after it receives notice of issuance by the Securities and Exchange Commission (the "SEC"), any state securities commission or any other regulatory authority of any stop order or of any order preventing or suspending any offering of any securities of the Company, or of the suspension of the qualification of the Common Stock of the Company for offering or sale in any jurisdiction, or the initiation of any proceeding for any such purpose. 6.2 Listing. (a) EPXR shall promptly secure the listing of the shares of EPXR Common Stock issuable upon conversion of the Note on the Principal Market (as defined below) (subject to official notice of issuance) and shall maintain such listing so long as any other shares of EPXR Common Stock shall be so listed. EPXR will maintain the listing of EPXR Common Stock on the Principal Market, and will comply in all material respects with EPXR's reporting, filing and other obligations under the bylaws or rules of the National Association of Securities Dealers ("NASD") and such exchanges, as applicable. (b) Concurrently with the consummation of an initial public offering of the VOXX Common Stock, VOXX shall promptly secure the listing of the shares of VOXX Common Stock issuable upon conversion of the Note and upon the exercise of the Option and the Warrant on the Principal Market (subject to official notice of issuance) and shall maintain such listing so long as any other shares of EPXR Common Stock shall be so listed. EPXR will maintain the listing of EPXR Common Stock on the Principal Market, and will comply in all material respects with EPXR's reporting, filing and other obligations under the bylaws or rules of the National Association of Securities Dealers ("NASD") and such exchanges, as applicable. (c) For purposes hereof, the term "Principal Market" means the NASD Over The Counter Bulletin Board, NASDAQ SmallCap Market, NASDAQ National Markets System, American Stock Exchange or New York Stock Exchange (whichever of the foregoing is at the time the principal trading exchange or market for the respective Common Stock). 6.3 Market Regulations. The Company shall notify the SEC, NASD and applicable state authorities, in accordance with their requirements, of the transactions contemplated by this Agreement, and shall take all other necessary action and proceedings as may be required and permitted by applicable law, rule and regulation, for the legal and valid issuance of the Securities to the Purchaser and promptly provide copies thereof to the Purchaser. 6.4 Reporting Requirements. The Company will timely file with the SEC all reports required to be filed pursuant to the Exchange Act and refrain from terminating its status as an issuer required by the Exchange Act to file reports thereunder even if the Exchange Act or the rules or regulations thereunder would permit such termination. 17 6.5 Use of Funds. The Company agrees that it will use the proceeds of the sale of the Note, the Warrant and the Option (x) for general working capital purposes and (y) for the development and acquisition of certain contact centers in the Phillipines. 6.6 Access to Facilities. Each of the Company and each of its Subsidiaries will permit any representatives designated by the Purchaser (or any successor of the Purchaser), upon reasonable notice and during normal business hours, at such person's expense and accompanied by a representative of the Company, to: (a) visit and inspect any of the properties of the Company or any of its Subsidiaries; (b) examine the corporate and financial records of the Company or any of its Subsidiaries (unless such examination is not permitted by federal, state or local law or by contract) and make copies thereof or extracts therefrom; and (c) discuss the affairs, finances and accounts of the Company or any of its Subsidiaries with the directors, officers and independent accountants of the Company or any of its Subsidiaries. Notwithstanding the foregoing, neither the Company nor any of its Subsidiaries will provide any material, non-public information to the Purchaser unless the Purchaser signs a confidentiality agreement and otherwise complies with Regulation FD, under the federal securities laws. 6.7 Taxes. Each of the Company and each of its Subsidiaries will promptly pay and discharge, or cause to be paid and discharged, when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property or business of the Company and its Subsidiaries; provided, however, that any such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if the Company and/or such Subsidiary shall have set aside on its books adequate reserves with respect thereto, and provided, further, that the Company and its Subsidiaries will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose any lien which may have attached as security therefor. 18 6.8 Insurance. Each of the Company and its Subsidiaries will keep its assets which are of an insurable character insured by financially sound and reputable insurers against loss or damage by fire, explosion and other risks customarily insured against by companies in similar business similarly situated as the Company and its Subsidiaries; and the Company and its Subsidiaries will maintain, with financially sound and reputable insurers, insurance against other hazards and risks and liability to persons and property to the extent and in the manner which the Company reasonably believes is customary for companies in similar business similarly situated as the Company and its Subsidiaries and to the extent available on commercially reasonable terms. The Company, and each of its Subsidiaries will jointly and severally bear the full risk of loss from any loss of any nature whatsoever with respect to the assets pledged to the Purchaser as security for its obligations hereunder and under the Related Agreements. At the Company's and each of its Subsidiaries' joint and several cost and expense in amounts and with carriers reasonably acceptable to Purchaser, the Company and each of its Subsidiaries shall (i) keep all its insurable properties and properties in which it has an interest insured against the hazards of fire, flood, sprinkler leakage, those hazards covered by extended coverage insurance and such other hazards, and for such amounts, as is customary in the case of companies engaged in businesses similar to the Company's or the respective Subsidiary's including business interruption insurance; (ii) maintain a bond in such amounts as is customary in the case of companies engaged in businesses similar to the Company's or the respective Subsidiary's insuring against larceny, embezzlement or other criminal misappropriation of insured's officers and employees who may either singly or jointly with others at any time have access to the assets or funds of the Company or any of its Subsidiaries either directly or through governmental authority to draw upon such funds or to direct generally the disposition of such assets; (iii) maintain public and product liability insurance against claims for personal injury, death or property damage suffered by others; (iv) maintain all such worker's compensation or similar insurance as may be required under the laws of any state or jurisdiction in which the Company or the respective Subsidiary is engaged in business; and (v) furnish Purchaser with (x) copies of all policies and evidence of the maintenance of such policies at least thirty (30) days before any expiration date, (y) excepting the Company's workers' compensation policy, endorsements to such policies naming Purchaser as "co-insured" or "additional insured" and appropriate loss payable endorsements in form and substance satisfactory to Purchaser, naming Purchaser as loss payee, and (z) evidence that as to Purchaser the insurance coverage shall not be impaired or invalidated by any act or neglect of the Company or any Subsidiary and the insurer will provide Purchaser with at least thirty (30) days notice prior to cancellation. The Company and each Subsidiary shall instruct the insurance carriers that in the event of any loss thereunder, the carriers shall make payment for such loss to the Company and/or the Subsidiary and Purchaser jointly. In the event that as of the date of receipt of each loss recovery upon any such insurance, the Purchaser has not declared an event of default with respect to this Agreement or any of the Related Agreements, then the Company and/or such Subsidiary shall be permitted to direct the application of such loss recovery proceeds toward investment in property, plant and equipment that would comprise "Collateral" secured by Purchaser's security interest pursuant to its security agreement, with any surplus funds to be applied toward payment of the obligations of the Company to Purchaser. In the event that Purchaser has properly declared an event of default with respect to this Agreement or any of the Related Agreements, then all loss recoveries received by Purchaser upon any such insurance thereafter may be applied to the obligations of the Company hereunder and under the Related Agreements, in such order as the Purchaser may determine. Any surplus (following satisfaction of all Company obligations to Purchaser) shall be paid by Purchaser to the Company or applied as may be otherwise required by law. Any deficiency thereon shall be paid by the Company or the Subsidiary, as applicable, to Purchaser, on demand. 6.9 Intellectual Property. Each of the Company and each of its Subsidiaries shall maintain in full force and effect its existence, rights and franchises and all licenses and other rights to use Intellectual Property owned or possessed by it and reasonably deemed to be necessary to the conduct of its business. 6.10 Properties. Each of the Company and each of its Subsidiaries will keep its properties in good repair, working order and condition, reasonable wear and tear excepted, and from time to time make all needful and proper repairs, renewals, replacements, additions and improvements thereto; and each of the Company and each of its Subsidiaries will at all times comply with each provision of all leases to which it is a party or under which it occupies property if the breach of such provision could, either individually or in the aggregate, reasonably be expected tohave a Material Adverse Effect. 19 6.11 Confidentiality. The Company agrees that it will not disclose, and will not include in any public announcement, the name of the Purchaser, unless expressly agreed to by the Purchaser or unless and until such disclosure is required by law or applicable regulation, and then only to the extent of such requirement. Notwithstanding the foregoing, the Company may disclose Purchaser's identity and the terms of this Agreement to its current and prospective debt and equity financing sources. 6.12 Required Approvals. For so long as twenty-five percent (25%) of the principal amount of the Note is outstanding, EPXR, without the prior written consent of the Purchaser, shall not, and shall not permit any of its Subsidiaries to: (a) (i) directly or indirectly declare or pay any dividends, other than (w) dividends paid to the Company or to any Credit Party (as defined below), (x) dividends paid by EPXR in an aggregate amount not to exceed $200,000 in any fiscal year of EPXR, and (y) dividends paid to holders of EPXR Common Stock solely to the extent that such dividends are paid in EPXR Common Stock, (ii) issue any preferred stock that is manditorily redeemable prior to the six month anniversary of the Maturity Date (as defined in the Note), (iii) redeem any of its preferred stock or other equity interests, or (iv) issue any equity interests of Voxx (or any securities convertible or exercisable into equity interests of Voxx), or agree to issue any equity interests of Voxx (or any securities convertible or exercisable into equity interests of Voxx) (x) prior to the consummation of, or in connection with, an initial public offering of the Voxx Common Stock (other than (i) issuances to the Laurus Creditors (as defined in the Intercreditor Agreement) that are contemplated by the Laurus Documents (as defined in the Intercreditor Agreement), (ii) issuances to the Sands Creditors (as defined in the Intercreditor Agreement) that are contemplated by the Sands Documents (as defined in the Intercreditor Agreement) or (iii) issuances to the investors in respect of the Bridge Loan Indebtedness (as defined below) in accordance with the terms set forth in Section 6.12(e)(i)(v) below); (b) liquidate, dissolve or effect a material reorganization, other than the liquidation or dissolution of Immaterial Subsidiaries (it being understood that in no event shall (i) EPXR and Voxx merge or (ii) EPXR or Voxx dissolve, liquidate or merge with any other person or entity (unless EPXR or Voxx, as the case may be, is the surviving entity)); (c) become subject to (including, without limitation, by way of amendment to or modification of) any agreement or instrument which by its terms would (under any circumstances) restrict EPXR's or any of its Subsidiaries' right to perform the provisions of this Agreement, any Related Agreement or any of the agreements contemplated hereby or thereby; (d) materially alter or change the scope of the business of EPXR and its Subsidiaries taken as a whole; 20 (e) (i) create, incur, assume or suffer to exist any indebtedness (exclusive of trade debt and debt incurred to finance the purchase of equipment (not in excess of five percent (5%) per annum of the fair market value of EPXR's assets) whether secured or unsecured other than (v) indebtedness consisting of unsecured bridge loans in an aggregate principal amount not to exceed $5,000,000 at any time outstanding ("Bridge Loan Indebtedness"), which bridge loans shall by their terms (I) require either (a) the repayment thereof from the proceeds of an initial public offering of the VOXX Common Stock or (b) the conversion thereof into VOXX Common Stock in connection with (but not prior to the VOXX IPO Date (as defined in the Note)) an initial public offering of the VOXX Common Stock at a conversion price no less than 70% of the price of the VOXX Common Stock in connection with the such initial public offering thereof and (II) may provide for the issuance of warrants to the investors with respect to such Bridge Loan Indebtedness and issuance of warrants to the selling agent with respect to such Bridge Loan Indebtedness, in each case so long as such warrants are not exercisable prior to the VOXX IPO Date (as defined in the Note) and are not exercisable at a price per share of Voxx Common Stock less than or equal to $2.23 (as adjusted proportionately for any stock splits, combinations or similar events), (w) lease obligations (capitalized or otherwise) incurred by the Company or any of its Subsidiaries in the ordinary course of business, (x) the Sands Obligations (as defined in the Intercreditor Agreement) and the Laurus Obligations (as defined in the Intercreditor Agreement), (y) indebtedness set forth on Schedule 6.12(e) attached hereto and made a part hereof and any refinancings or replacements thereof on terms no less favorable to the Purchaser than the indebtedness being refinanced or replaced, and (z) any debt incurred in connection with the purchase of assets in the ordinary course of business, or any refinancings or replacements thereof on terms no less favorable to the Purchaser than the indebtedness being refinanced or replaced; (ii) cancel any debt owing to it in excess of $50,000 in the aggregate during any 12 month period; (iii) assume, guarantee, endorse or otherwise become directly or contingently liable in connection with any obligations of any other Person, except the endorsement of negotiable instruments by EPXR for deposit or collection or similar transactions in the ordinary course of business or guarantees of indebtedness otherwise permitted to be outstanding pursuant to this clause (e); (f) create or acquire any Subsidiary after the date hereof unless (i) such Subsidiary is a wholly-owned Subsidiary of EPXR and (ii) such Subsidiary becomes party to the Master Security Agreement, the Stock Pledge Agreement, the Subsidiary Guaranty (in each case, either by executing a counterpart thereof or an assumption or joinder agreement in respect thereof) and/or, if requested by the Purchaser with respect to entities located outside of the United States, the foreign equivalent of any such agreement or guaranty (it being understood that the terms and conditions of any such foreign equivalent shall be satisfactory to the Purchaser), and, to the extent required by the Purchaser, satisfies each condition of this Agreement and the Related Agreements as if such Subsidiary were a Subsidiary of EPXR on the Closing Date; and (g) (i) make, or permit any of its Subsidiaries which are Credit Parties to make, any investments in, or any loans or advances to, any Subsidiary of EPXR which is not a Credit Party, other than, so long as no Event of Default (as defined in the Note) has occurred and is continuing, immaterial investments, loans and/or advances made in the ordinary course of business or (ii) transfer, or permit any Subsidiary of EPXR which is a Credit Party to transfer, assets to any Subsidiary of EPXR which is not a Credit Party, other than, so long as no Event of Default has occurred and is continuing, immaterial asset transfers made in the ordinary course of business. 21 For the purposes of this Agreement, "Credit Party" shall mean (x) EPXR and each Subsidiary of EPXR organized in the United States of America that is party to the Master Security Agreement, the Stock Pledge Agreement and the Subsidiary Guaranty and (y) Epixtar Phillippines IT-Enabled Services Corporation, a corporation organized under the laws of the Phillippines ("Epixtar Phillippines") and each other wholly-owned Subsidiary of the Company that is organized outside of the United States of America that has executed the Foreign Documentation referred to in Section 6.16 (it being understood and agreed that an Immaterial Subsidiary shall be deemed a Credit Party for purposes of this definition following the execution by such Immaterial Subsidiary of an assumption or joinder agreement with respect to the Master Security Agreement, the Subsidiary Guaranty and the Stock Pledge Agreement). 6.13 Reissuance of Securities. The Company agrees to reissue certificates representing the Securities without the legends set forth in Section 5.7 above at such time as: (a) the holder thereof is permitted to dispose of such Securities pursuant to Rule 144(k) under the Securities Act; or (b) upon resale subject to an effective registration statement after such Securities are registered under the Securities Act. The Company agrees to cooperate with the Purchaser in connection with all resales pursuant to Rule 144(d) and Rule 144(k) and provide legal opinions necessary to allow such resales provided the Company and its counsel receive reasonably requested representations from the selling Purchaser and broker, if any. 6.14 Opinion. On the Closing Date, the Company will deliver to the Purchaser an opinion acceptable to the Purchaser from the Company's external legal counsel. The Company will provide, at the Company's expense, such other legal opinions in the future as are deemed reasonably necessary by the Purchaser (and acceptable to the Purchaser) in connection with the conversion of the Note and exercise of the Option and the Warrant. 6.15 Margin Stock. The Company will not permit any of the proceeds of the Note, the Warrant or the Option to be used directly or indirectly to "purchase" or "carry" "margin stock" or to repay indebtedness incurred to "purchase" or "carry" "margin stock" within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect. 22 6.16 Foreign Security. No later than 20 days following the Closing Date hereunder, the Company shall cause Epixtar Phillippines, each other applicable Subsidiary of the Company and any other third party requested by the Purchaser to enter into such security and guaranty documentation governed by laws of the Phillippines as is requested by the Purchaser, with such documentation to be in form and substance satisfactory to the Purchaser. No later than 60 days following a request by the Purchaser, the Company shall cause each Subsidiary organized in a jurisdiction outside of the United States (collectively, the "Foreign Subsidiaries"), other than an Immaterial Subsidiary, to execute such guaranty and security documentation governed by the jurisdiction of organization of such Subsidiary (the "Foreign Documentation") as the Purchaser deems necessary or desirable. All such Foreign Documentation shall be in form and substance satisfactory to the Purchaser, and the Company agrees to cause the respective Foreign Subsidiary to deliver all such other documentation as is requested by the Purchaser in connection with the execution and delivery of such Foreign Documentation (including, without limitation, an opinion of counsel satisfactory to the Purchaser). Furthermore, it is hereby agreed that the Company shall not permit any equity interests of any Foreign Subsidiary (or any parent thereof) to be transferred to any person or other entity that is not a Credit Party until such time as the Foreign Subsidiaries have become party to the Foreign Documentation required to be entered into pursuant to this Section 6.16. The Company shall reimburse the Purchaser for any and all legal fees and other expenses incurred by the Purchaser in connection with the preparation, execution, negotiation and delivery of the Foreign Documentation. 6.17 Financing Right of First Refusal. (a) The Company hereby grants to the Purchaser a right of first refusal to provide any Bridge Loan Indebtedness to be issued by the Company and/or any of its Subsidiaries, subject to the following terms and conditions. From and after the date hereof, prior to the incurrence of any Bridge Loan Indebtedness, the Company and/or any Subsidiary of the Company, as the case may be, shall notify the Purchaser of its intention to enter into such Bridge Loan Indebtedness. In connection therewith, the Company and/or the applicable Subsidiary thereof shall submit a fully executed term sheet (a "Proposed Term Sheet") to the Purchaser setting forth the terms, conditions and pricing of any such Bridge Loan Indebtedness (such financing to be negotiated on "arm's length" terms and the terms thereof to be negotiated in good faith) proposed to be entered into by the Company and/or such Subsidiary. The Purchaser shall have the right, but not the obligation, to deliver its own proposed term sheet (the "Purchaser Term Sheet") setting forth the terms and conditions upon which the Purchaser would be willing to provide such Bridge Loan Indebtedness to the Company and/or such Subsidiary. The Purchaser Term Sheet shall contain terms no less favorable to the Company and/or such Subsidiary than those outlined in Proposed Term Sheet. The Purchaser shall deliver such Purchaser Term Sheet within five business days of receipt of each such Proposed Term Sheet. If the provisions of the Purchaser Term Sheet are at least as favorable to the Company and/or such Subsidiary, as the case may be, as the provisions of the Proposed Term Sheet, the Company and/or such Subsidiary shall enter into and consummate the Bridge Loan Indebtedness transaction outlined in the Purchaser Term Sheet. (b) The Company will not, and will not permit its Subsidiaries to, agree, directly or indirectly, to any restriction with any person or entity which limits the ability of the Purchaser to consummate a Bridge Loan Indebtedness transaction or any other additional financing with the Company or any of its Subsidiaries. 23 6.18 Issuance of Voxx Common Stock. Notwithstanding anything to the contrary contained in this Agreement, EPXR and Voxx hereby agree that it shall not (or shall not permit, as the case may be) any share of Voxx Common Stock (or any securities convertible or exercisable into shares of Voxx Common Stock) to be issued, or agree to issue any share of Voxx Common Stock (or any securities convertible or exercisable into shares of Voxx Common Stock), in any case, at a price less than or equal to $2.23 per share. 7. Covenants of the Purchaser. The Purchaser covenants and agrees with the Company as follows: 7.1 Confidentiality. The Purchaser agrees that it will not disclose, and will not include in any public announcement, the name of the Company, unless expressly agreed to by the Company or unless and until such disclosure is required by law or applicable regulation, and then only to the extent of such requirement. 7.2 Non-Public Information. The Purchaser agrees not to effect any sales in the shares of the Company's Common Stock while in possession of material, non-public information regarding the Company if such sales would violate applicable securities law. 7.3 Limitation on Acquisition of Common Stock of the Company. Notwithstanding anything to the contrary contained in this Agreement, any Ancillary Agreement or any document, instrument or agreement entered into in connection with any other transactions between the Purchaser and the Company, the Purchaser may not acquire stock in the Company (including, without limitation, pursuant to a contract to purchase, by exercising an option or warrant, by converting any other security or instrument, by acquiring or exercising any other right to acquire, shares of stock or other security convertible into shares of stock in the Company, or otherwise, and such contracts, options, warrants, conversion or other rights shall not be enforceable or exercisable) to the extent such stock acquisition would cause any interest (including any original issue discount) payable by the Company to Laurus not to qualify as "portfolio interest" within the meaning of Section 881(c)(2) of the Code, by reason of Section 881(c)(3) of the Code, taking into account the constructive ownership rules under Section 871(h)(3)(C) of the Code (the "Stock Acquisition Limitation"). The Stock Acquisition Limitation shall automatically become null and void without any notice to the Company upon the earlier to occur of either (a) the Company's delivery to the Purchaser of a Notice of Redemption (as defined in the Note) or (b) the existence of an Event of Default (as defined in the Note) at a time when the average closing price of the Company's common stock as reported by Bloomberg, L.P. on the Principal Market for the immediately preceding five trading days is greater than or equal to 150% of the Fixed Conversion Price (as defined in the Note). 8. Covenants of the Company and Purchaser Regarding Indemnification. 8.1 Company Indemnification. The Company agrees to indemnify, hold harmless, reimburse and defend the Purchaser, each of the Purchaser's officers, directors, agents, affiliates, control persons, and principal shareholders, against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Purchaser which results, arises out of or is based upon: (i) any misrepresentation by the Company or any of its Subsidiaries or breach of any warranty by the Company or any of its Subsidiaries in this Agreement, any Related Agreement or in any exhibits or schedules attached hereto or thereto; or (ii) any breach or default in performance by Company or any of its Subsidiaries of any covenant or undertaking to be performed by Company or any of its Subsidiaries hereunder, under any other Related Agreement or any other agreement entered into by the Company and/or any of its Subsidiaries and Purchaser relating hereto or thereto. 24 8.2 Purchaser's Indemnification. Purchaser agrees to indemnify, hold harmless, reimburse and defend the Company and each of the Company's officers, directors, agents, affiliates, control persons and principal shareholders, at all times against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Company which results, arises out of or is based upon: (i) any misrepresentation by Purchaser or breach of any warranty by Purchaser in this Agreement or in any exhibits or schedules attached hereto or any Related Agreement; or (ii) any breach or default in performance by Purchaser of any covenant or undertaking to be performed by Purchaser hereunder, or any other agreement entered into by the Company and Purchaser relating hereto. 9. Conversion of Convertible Note. 9.1 Mechanics of Conversion. (a) Provided the Purchaser has notified the Company of the Purchaser's intention to sell the Note Shares and the Note Shares are included in an effective registration statement or are otherwise exempt from registration when sold: (i) upon the conversion of the Note or part thereof, the Company shall, at its own cost and expense, take all necessary action (including the issuance of an opinion of counsel reasonably acceptable to the Purchaser following a request by the Purchaser) to assure that the Company's transfer agent shall issue shares of the Company's Common Stock in the name of the Purchaser (or its nominee) or such other persons as designated by the Purchaser in accordance with Section 9.1(b) hereof and in such denominations to be specified representing the number of Note Shares issuable upon such conversion; and (ii) the Company warrants that no instructions other than these instructions have been or will be given to the transfer agent of the Company's Common Stock and that after the Effectiveness Date (as defined in the respective Registration Rights Agreement) the Note Shares issued will be freely transferable subject to the prospectus delivery requirements of the Securities Act and the provisions of this Agreement, and will not contain a legend restricting the resale or transferability of the Note Shares. (b) Purchaser will give notice of its decision to exercise its right to convert the Note or part thereof by telecopying or otherwise delivering an executed and completed notice of the number of shares to be converted to the Company (the "Notice of Conversion"). The Purchaser will not be required to surrender the Note until the Purchaser receives a credit to the account of the Purchaser's prime broker through the DWAC system (as defined below), representing the Note Shares or until the Note has been fully satisfied. Each date on which a Notice of Conversion is telecopied or delivered to the Company in accordance with the provisions hereof shall be deemed a "Conversion Date." Pursuant to the terms of the Notice of Conversion, the Company will issue instructions to the transfer agent accompanied by an opinion of counsel within one (1) business day of the date of the delivery to the Company of the Notice of Conversion and shall cause the transfer agent to transmit the certificates representing the Conversion Shares to the Purchaser by crediting the account of the Purchaser's prime broker with the Depository Trust Company ("DTC") through its Deposit Withdrawal Agent Commission ("DWAC") system within three (3) business days after receipt by the Company of the Notice of Conversion (the "Delivery Date"). 25 (c) The Company understands that a delay in the delivery of the Note Shares in the form required pursuant to Section 9 hereof beyond the Delivery Date could result in economic loss to the Purchaser. In the event that the Company fails to direct its transfer agent to deliver the Note Shares to the Purchaser via the DWAC system within the time frame set forth in Section 9.1(b) above and the Note Shares are not delivered to the Purchaser by the Delivery Date, as compensation to the Purchaser for such loss, the Company agrees to pay late payments to the Purchaser for late issuance of the Note Shares in the form required pursuant to Section 9 hereof upon conversion of the Note in the amount equal to the greater of: (i) $500 per business day after the Delivery Date; or (ii) the Purchaser's actual damages from such delayed delivery. Notwithstanding the foregoing, the Company will not owe the Purchaser any late payments if the delay in the delivery of the Note Shares beyond the Delivery Date is solely out of the control of the Company and the Company is actively trying to cure the cause of the delay. The Company shall pay any payments incurred under this Section in immediately available funds upon demand and, in the case of actual damages, accompanied by reasonable documentation of the amount of such damages. Such documentation shall show the number of shares of Common Stock the Purchaser is forced to purchase (in an open market transaction) which the Purchaser anticipated receiving upon such conversion, and shall be calculated as the amount by which (A) the Purchaser's total purchase price (including customary brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (B) the aggregate principal and/or interest amount of the Note, for which such Conversion Notice was not timely honored. Nothing contained herein or in any document referred to herein or delivered in connection herewith shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest or dividends required to be paid or other charges hereunder exceed the maximum amount permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to a Purchaser and thus refunded to the Company. 10. Registration Rights. 10.1 Registration Rights Granted. The Company hereby grants registration rights to the Purchaser pursuant to a Registration Rights Agreement dated as of even date herewith between the Company and the Purchaser. 26 10.2 Offering Restrictions. Except as previously disclosed in the SEC Reports or in the Exchange Act Filings, or stock or stock options granted to employees or directors of the Company (these exceptions hereinafter referred to as the "Excepted Issuances"), neither the Company nor any of its Subsidiaries will issue any securities with a continuously variable/floating conversion feature which are or could be (by conversion or registration) free-trading securities (i.e. common stock subject to a registration statement) prior to the full repayment or conversion of the Note (together with all accrued and unpaid interest and fees related thereto) (the "Exclusion Period"), provided that a securities with a variable/floating rate conversion feature that is not less than the Fixed Conversion Price (as defined in the Note) shall be permitted. 11. Miscellaneous. 11.1 Governing Law. THIS AGREEMENT AND EACH RELATED AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. EXCEPT AS SET FORTH BELOW IN THIS SECTION 11.1, ANY AND ALL DISPUTES, CONTROVERSIES AND CLAIMS THAT THE COMPANY OR ANY OF ITS SUBSIDIARIES MAY ASSERT AGAINST THE PURCHASER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY RELATED AGREEMENT SHALL BE DETERMINED EXCLUSIVELY BY ARBITRATION (EACH SUCH ARBITRATION, AN "ARBITRATION") IN NEW YORK CITY BEFORE A PANEL OF THREE NEUTRAL ARBITRATORS AGREED TO BY THE PURCHASER AND THE COMPANY (COLLECTIVELY, THE "ARBITRATORS") IN ACCORDANCE WITH AND PURSUANT TO THE THEN EXISTING COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. THE COMPANY (ON ITS BEHALF AND ON BEHALF OF ITS SUBSIDIARIES) HEREBY IRREVOCABLY WAIVES ANY RIGHT TO ASSERT SUCH CLAIMS IN ANY OTHER FORUM. THE ARBITRATORS SHALL HAVE THE POWER IN THEIR DISCRETION TO AWARD SPECIFIC PERFORMANCE OR INJUNCTIVE RELIEF (BUT SHALL NOT HAVE THE POWER TO RENDER ANY INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES) AND REASONABLE ATTORNEYS' FEES AND EXPENSES TO ANY PARTY IN ANY ARBITRATION. THE ARBITRATORS MAY NOT CHANGE, MODIFY OR ALTER ANY EXPRESS CONDITION, TERM OR PROVISION OF THIS AGREEMENT OR OF ANY RELATED AGREEMENT NOR SHALL THEY HAVE THE POWER TO RENDER ANY AWARD AGAINST THE PURCHASER THAT WOULD HAVE SUCH EFFECT. EACH ARBITRATION AWARD SHALL BE FINAL AND BINDING UPON THE PARTIES SUBJECT THERETO AND JUDGMENT MAY BE ENTERED THEREON IN ANY COURT OF COMPETENT JURISDICTION. THE SERVICE OF ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN CONNECTION WITH AN ARBITRATION OR FOR THE ENFORCEMENT OF ANY ARBITRATION AWARD MAY BE MADE IN THE SAME MANNER AS COMMUNICATIONS MAY BE GIVEN UNDER SECTION 11.8 HEREOF. NOTWITHSTANDING THE FOREGOING, THE PROVISIONS OF THIS SECTION 11.1 NOR ANY OTHER PROVISION CONTAINED IN THIS AGREEMENT OR IN ANY RELATED AGREEMENT SHALL LIMIT IN ANY MANNER WHATSOEVER THE PURCHASER'S RIGHT TO COMMENCE AN ACTION AGAINST OR IN CONNECTION WITH THE COMPANY, ANY OF ITS SUBSIDIARIES OR THEIR RESPECTIVE PROPERTIES IN ANY COURT OF COMPETENT JURISDICTION OR OTHERWISE UTILIZE JUDICIAL PROCESS IN CONNECTION WITH OR ARISING OUT OF THE PURCHASER'S RIGHTS AND REMEDIES UNDER THIS AGREEMENT AND/OR ANY RELATED AGREEMENT OR OTHERWISE (ANY SUCH ACTION, A "COURT ACTION"). COURT ACTIONS MAY BE BROUGHT BY THE PURCHASER IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION AND THE COMPANY (ON ITS BEHALF AND ON BEHALF OF ITS SUBSIDIARIES) IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH STATE AND FEDERAL COURTS AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE OF INCONVENIENT FORUM OR LACK OF PERSONAL JURISDICTION IN SUCH FORUM OR RIGHT OF REMOVAL OR RIGHT TO JURY TRIAL UNDER ANY APPLICABLE LAW OR DECISION OR OTHERWISE. SERVICE OF ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN CONNECTION WITH A COURT ACTION MAY BE MADE IN THE SAME MANNER AS COMMUNICATIONS MAY BE GIVEN UNDER SECTION 11.8. IN ADDITION, THE PURCHASER MAY SERVE PROCESS IN ANY OTHER MANNER PERMITTED UNDER APPLICABLE LAW. IN THE EVENT THAT ANY PROVISION OF THIS AGREEMENT OR ANY RELATED AGREEMENT DELIVERED IN CONNECTION HEREWITH 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 AGREEMENT OR ANY RELATED AGREEMENT. 27 11.2 Survival. The representations, warranties, covenants and agreements made herein shall survive any investigation made by the Purchaser and the closing of the transactions contemplated hereby to the extent provided therein. All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in connection with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company hereunder solely as of the date of such certificate or instrument. 11.3 Successors. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, heirs, executors and administrators of the parties hereto and shall inure to the benefit of and be enforceable by each person who shall be a holder of the Securities from time to time, other than the holders of Common Stock which has been sold by the Purchaser pursuant to Rule 144 or an effective registration statement. Purchaser may not assign its rights hereunder to a competitor of the Company. 11.4 Entire Agreement. This Agreement, the Related Agreements, the exhibits and schedules hereto and thereto and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein. 28 11.5 Severability. In case any provision of the Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 11.6 Amendment and Waiver. (a) This Agreement may be amended or modified only upon the written consent of the Company and the Purchaser. (b) The obligations of the Company and the rights of the Purchaser under this Agreement may be waived only with the written consent of the Purchaser. (c) The obligations of the Purchaser and the rights of the Company under this Agreement may be waived only with the written consent of the Company. 11.7 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement or the Related Agreements, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. All remedies, either under this Agreement or the Related Agreements, by law or otherwise afforded to any party, shall be cumulative and not alternative. 11.8 Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified; (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (c) three (3) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent as follows: If to the Company, to: Epixtar Corp. Voxx Corporation 11900 Biscayne Boulevard, Suite 700 Miami, Florida 33181 Attention: Corporate Secretary Facsimile: 305-503-8610 29 with a copy to: Michael DiGiovanna, Esq. 212 Carnegie Center Suite 206 Princeton, New Jersey 08540 Facsimile: 609-452-9473 If to the Purchaser, to: Laurus Master Fund, Ltd. c/o M&C Corporate Services Limited P.O. Box 309 GT Ugland House George Town South Church Street Grand Cayman, Cayman Islands Facsimile: 345-949-8080 with a copy to: John E. Tucker, Esq. 825 Third Avenue 14th Floor New York, NY 10022 Facsimile: 212-541-4434 or at such other address as the Company or the Purchaser may designate by written notice to the other parties hereto given in accordance herewith. 11.9 Attorneys' Fees. In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including, without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals. 11.10 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. 11.11 Facsimile Signatures; Counterparts. This Agreement may be executed by facsimile signatures and in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 11.12 Broker's Fees. Except as set forth on Schedule 11.12 hereof, each party hereto represents and warrants that no agent, broker, investment banker, person or firm acting on behalf of or under the authority of such party hereto is or will be entitled to any broker's or finder's fee or any other commission directly or indirectly in connection with the transactions contemplated herein. Each party hereto further agrees to indemnify each other party for any claims, losses or expenses incurred by such other party as a result of the representation in this Section 11.12 being untrue. 30 11.13 Construction. Each party acknowledges that its legal counsel participated in the preparation of this Agreement and the Related Agreements 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 Agreement to favor any party against the other. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] 31 IN WITNESS WHEREOF, the parties hereto have executed the SECURITIES PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof. COMPANY: PURCHASER: EPIXTAR CORP. LAURUS MASTER FUND, LTD. By: /s/ Ilene Kaminsky By: /s/ Authorized Officer -------------------------- --------------------------- Name: Ilene Kaminsky Name: -------------------------- --------------------------- Title: CEO Title: -------------------------- --------------------------- VOXX CORPORATION By: /s/ Ilene Kaminsky -------------------------- Name: Ilene Kaminsky -------------------------- Title: CEO -------------------------- 32 EXHIBIT A FORM OF CONVERTIBLE NOTE A-1 EXHIBIT B-1 FORM OF OPTION B-1 EXHIBIT B-2 FORM OF WARRANT B-2 EXHIBIT D FORM OF ESCROW AGREEMENT D-1 EX-4.13.3 4 b406530ex4_13-3.txt EXHIBIT 4.13.3 EXHIBIT 4.13.3 THIS NOTE (THE "NOTE") AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO EPIXTAR CORP. AND/OR VOXX CORPORATION, AS APPLICABLE THAT SUCH REGISTRATION IS NOT REQUIRED. SECURED CONVERTIBLE TERM NOTE FOR VALUE RECEIVED, EPIXTAR CORP., a Florida corporation ("EPXR"), and VOXX CORPORATION, a Florida corporation ("VOXX") (EPXR and VOXX, collectively, the "BORROWER"), jointly and severally hereby promise to pay to LAURUS MASTER FUND, LTD., c/o M&C Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080 (the "HOLDER") or its registered assigns or successors in interest the sum of Five Million Five Hundred Thousand Dollars ($5,500,000), together with any accrued and unpaid interest hereon, on April 29, 2008 (the "MATURITY DATE") if not sooner paid. Capitalized terms used herein without definition shall have the meanings ascribed to such terms in that certain Securities Purchase Agreement dated as of the date hereof between the Borrower and the Holder (the "PURCHASE AGREEMENT"). The following terms shall apply to this Note: ARTICLE I INTEREST & AMORTIZATION 1.1 Interest Rate. Subject to Sections 4.11 and 5.6 hereof, interest payable on this shall accrue at a rate per annum (the "Interest Rate") equal to the "prime rate" published in The Wall Street Journal from time to time, plus two percent (2.00%). The prime rate shall be increased or decreased as the case may be for each increase or decrease in the prime rate in an amount equal to such increase or decrease in the prime rate; each change to be effective as of the day of the change in such rate. Interest shall be (i) calculated on the basis of a 360 day year and payable monthly, in arrears, commencing on June 1, 2005 and on the first business day of each consecutive calendar month thereafter until the Maturity Date (and on the Maturity Date), whether by acceleration or otherwise (each, a "REPAYMENT DATE"). 1.2 Minimum Monthly Principal Payments. Amortizing payments of the aggregate principal amount outstanding under this Note at any time (the "PRINCIPAL AMOUNT") shall begin on November 1, 2005 and shall recur on the first business day of each succeeding month thereafter until the Maturity Date (each, an "AMORTIZATION DATE"). Subject to Article 3 below, beginning on the first Amortization Date, the Borrower shall make monthly payments to the Holder on each Repayment Date, each in the amount of $130,952.38 (the "MONTHLY PRINCIPAL AMOUNT"), together with any accrued and unpaid interest to date on such portion of the Principal Amount (as defined below) plus any and all other amounts which are then owing under this Note, the Purchase Agreement or any other Related Agreement but have not been paid (the Monthly Principal Amount, together with such accrued and unpaid interest and such other amounts, collectively, the "MONTHLY AMOUNT"). Any Principal Amount that remains outstanding on the Maturity Date shall be due and payable on the Maturity Date. ARTICLE II CONVERSION REPAYMENT 2.1 Payment of Monthly Amount in Cash or Common Stock. (a) If the Monthly Amount is required to be paid in shares of Common Stock (as defined below) pursuant to Section 2.1(b), each month by the fifth (5th) business day prior to each Amortization Date (the "NOTICE DATE"), the Holder shall, subject to Section 2.2 below and the other provisions of this Note, deliver to Borrower a written notice in the form of Exhibit B attached hereto converting the Monthly Amount payable on the next Amortization Date or Repayment Date, as the case may be, into freely tradable unrestricted shares of common stock of EPXR ("EPXR COMMON STOCK") or, following the satisfaction of each of the conditions set forth in clause (i) of Section 2.2 below, into freely tradable unrestricted shares of common stock of VOXX ("VOXX COMMON STOCK") (EPXR Common Stock and VOXX Common Stock, collectively, the "Common Stock") (each, a "REPAYMENT NOTICE"). If a Repayment Notice is not delivered by the Holder on or before the applicable Notice Date for such Amortization Date (or is not required to be delivered in accordance with Section 2.1(b)), then the Borrower shall pay the Monthly Amount due on such Amortization Date in cash. Any portion of the Monthly Amount paid in cash on a Amortization Date or Repayment Date, as the case may be, shall be paid to the Holder an amount equal to 102% of the principal portion of the Monthly Amount due and owing to Holder on such Amortization Date or Repayment Date. If the Holder converts all or a portion of the Monthly Amount in shares of Common Stock as provided herein, the number of such shares to be issued by the Borrower to the Holder on such Amortization Date or Repayment Date, as the case may be, shall be the number determined by dividing (x) the portion of the Monthly Amount to be paid in shares of Common Stock, by (y) the then applicable Fixed Conversion Price. For purposes hereof, the "FIXED CONVERSION PRICE" shall, subject to further adjustment as provided herein, mean (x) in the case of a conversion into EPXR Common Stock, $1.00 and (y) in the case of a conversion into VOXX Common Stock on or after the date of the consummation of an initial public offering of the VOXX Common Stock (the "VOXX IPO DATE"), a price equal to 85% of the offering price of the VOXX Common Stock on the VOXX IPO Date (after giving effect thereto). (b) Monthly Amount Conversion Guidelines. Subject to Sections 2.1(a), 2.2, and 3.2 hereof, the Holder shall convert all or a portion of the Monthly Amount due on each Repayment Date in shares of Common Stock if the average closing price of the Common Stock as reported by Bloomberg, L.P. on the Principal Market for the five (5) trading days immediately preceding such Repayment Date was greater than or equal to 110% of the Fixed Conversion Price, provided, however, that such conversions shall not exceed twenty five percent (25%) of the aggregate dollar trading volume of the Common Stock for the five (5) day trading period immediately preceding delivery of a Notice of Conversion to the Borrower. Any part of the Monthly Amount due on a Amortization Date or Repayment Date, as the case may be, that the Holder has not converted into shares of Common Stock shall be paid by the Borrower in cash on such Amortization Date or Repayment Date. Any part of the Monthly Amount due on such Amortization Date or Repayment Date which must be paid in cash (as a result of the closing price of the Common Stock on one or more of the five (5) trading days preceding the applicable Amortization Date or Repayment Date being less than 110% of the Fixed Conversion Price) shall be paid in cash at the rate of 102% of the Monthly Amount otherwise due on such Amortization Date or Repayment Date, within three (3) business days of the applicable Amortization Date or Repayment Date. 2.2 No Effective Registration. Notwithstanding anything to the contrary herein, absent the express written consent of the Holder, none of the Borrower's obligations to the Holder may be converted into VOXX Common Stock or EPXR Common Stock unless and until (i) in the case of conversion into VOXX Common Stock, either (I) (a) VOXX shall have consummated an initial public offering, (b)VOXX Common Stock shall be publicly traded on a nationally recognized exchange; and (c) the shares underlying the conversion of this Note into VOXX Common Stock pursuant to the terms hereof shall have been registered on an effective, current Registration Statement (as defined in the Registration Rights Agreement) or (II) an exemption from registration of the Voxx Common Stock (with respect to the resale of such common stock) is available to pursuant to Rule 144 of the Securities Act; (ii) in the case of conversion into EPXR Common Stock, (a) the shares underlying the conversion of this Note into EPXR Common Stock pursuant to the terms hereof shall have been registered on an effective, current Registration Statement; or (b) an exemption from registration of the EPXR Common Stock (with respect to the resale of such common stock) is available to pursuant to Rule 144 of the Securities Act and (iii) in each of the foregoing cases, no Event of Default hereunder or under any Related Agreement exists and is continuing, unless such Event of Default is cured within any applicable cure period or is otherwise waived in writing by the Holder in whole or in part at the Holder's option. 2.3 Optional Redemption in Cash. The Borrower will have the option of prepaying this Note ("OPTIONAL REDEMPTION") by paying to the Holder a sum of money equal to one hundred thirty percent (130%) of the outstanding principal amount of this Note at the time of prepayment, together with accrued but unpaid interest thereon and any and all other sums due, accrued or payable to the Holder arising under this Note, the Purchase Agreement or any Related Agreement (the "REDEMPTION AMOUNT") outstanding on the day written notice of redemption (the "NOTICE OF REDEMPTION") is given to the Holder. The Notice of Redemption shall specify the date for such Optional Redemption (the "REDEMPTION PAYMENT DATE") which date shall be seven (7) business days after the date of the Notice of Redemption (the "REDEMPTION PERIOD"). A Notice of Redemption shall not be effective with respect to any portion of this Note for which the Holder has a pending election to convert pursuant to Section 3.1, or for conversions initiated or made by the Holder pursuant to Section 3.1 during the Redemption Period. The Redemption Amount shall be determined as if such Holder's conversion elections had been completed immediately prior to the date of the Notice of Redemption. On the Redemption Payment Date, the Redemption Amount must be paid in good funds to the Holder. In the event the Borrower fails to pay the Redemption Amount on the Redemption Payment Date as set forth herein, then such Redemption Notice will be null and void. ARTICLE III CONVERSION RIGHTS 3.1. Holder's Conversion Rights. The Holder shall have the right, but not the obligation, to convert all or any portion of the then aggregate outstanding principal amount of this Note, together with interest and fees due hereon, into shares of Common Stock subject to the terms and conditions set forth in this Article III. The Holder may exercise such right by delivery to the Borrower of a written notice of conversion not less than one (1) day prior to the date upon which such conversion shall occur. 22.14 3.2 Conversion Limitation. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of this Note an amount that would be convertible into that number of Conversion Shares which would exceed the difference between the number of shares of Common Stock beneficially owned by such Holder or issuable upon exercise of warrants held by such Holder and 4.99% of the outstanding shares of Common Stock of the Borrower. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The Holder may void the Conversion Share limitation described in this Section 3.2 upon 75 days prior notice to the Borrower or without any notice requirement upon an Event of Default. 22.15 22.16 3.3 Mechanics of Holder's Conversion. (a) In the event that the Holder elects to convert this Note into Common Stock, the Holder shall give notice of such election by delivering an executed and completed notice of conversion ("NOTICE OF CONVERSION") to the Borrower and such Notice of Conversion shall provide a breakdown in reasonable detail of the Principal Amount, accrued interest and fees being converted. On each Conversion Date (as hereinafter defined) and in accordance with its Notice of Conversion, the Holder shall make the appropriate reduction to the Principal Amount, accrued interest and fees as entered in its records and shall provide written notice thereof to the Borrower within two (2) business days after the Conversion Date. Each date on which a Notice of Conversion is delivered or telecopied to the Borrower in accordance with the provisions hereof shall be deemed a Conversion Date (the "CONVERSION DATE"). A form of Notice of Conversion to be employed by the Holder is annexed hereto as Exhibit A. 22.17 (b) Pursuant to the terms of the Notice of Conversion, the Borrower will issue instructions to the transfer agent accompanied by an opinion of counsel within two (2) business day of the date of the delivery to Borrower of the Notice of Conversion and shall cause the transfer agent to transmit the certificates representing the Conversion Shares to the Holder by crediting the account of the Holder's designated broker with the Depository Trust Corporation ("DTC") through its Deposit Withdrawal Agent Commission ("DWAC") system within three (3) business days after receipt by the Borrower of the Notice of Conversion (the "DELIVERY DATE"). In the case of the exercise of the conversion rights set forth herein the conversion privilege shall be deemed to have been exercised and the Conversion Shares issuable upon such conversion shall be deemed to have been issued upon the date of receipt by the Borrower of the Notice of Conversion. The Holder shall be treated for all purposes as the record holder of such Common Stock, unless the Holder provides the Borrower written instructions to the contrary. 3.4 Conversion Mechanics. (a) The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing that portion of the principal and interest and fees to be converted, if any, by the then applicable Fixed Conversion Price. In the event of any conversions of outstanding principal amount under this Note in part pursuant to this Article III, such conversions shall be deemed to constitute conversions of outstanding principal amount applying to Monthly Amounts for the remaining Amortization Dates in chronological order. (b) The Fixed Conversion Price and number and kind of shares or other securities to be issued upon conversion is subject to adjustment from time to time upon the occurrence of certain events, as follows: A. Stock Splits, Combinations and Dividends. If the shares of Common Stock are subdivided or combined into a greater or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock in shares of Common Stock, the Fixed Conversion Price or the Conversion Price, as the case may be, shall be proportionately reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event. B. During the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the full conversion of this Note. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. The Borrower agrees that its issuance of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note. C. Share Issuances. Subject to the provisions of this Section 3.4, if the Borrower shall (x) in the case of EPXR Common Stock, at any time prior to the conversion or repayment in full of the Principal Amount and (y) in the case of VOXX Common Stock at any time after the VOXX IPO Date and prior to the conversion or repayment in full of the Principal Amount, issue any shares of Common Stock or securities convertible into Common Stock to a person other than the Holder (except (i) pursuant to Subsections A or B above; (ii) pursuant to options, warrants, or other obligations to issue shares outstanding on the date hereof as disclosed to Holder in writing; or (iii) pursuant to options that may be issued under any employee incentive stock option and/or any qualified stock option plan adopted by the Borrower) for a consideration per share (the "Offer Price") less than the Fixed Conversion Price in effect at the time of such issuance (any such issuance, an "Offering"), then the Fixed Conversion Price shall be immediately reset to such lower Offer Price at the time of issuance of such securities pursuant to the formula below. For purposes hereof, the issuance of any security of the Borrower convertible into or exercisable or exchangeable for Common Stock shall result in an adjustment to the Fixed Conversion Price at the time of issuance of such securities. If the Borrower issues any additional shares pursuant to Section 3.4 above then, and thereafter successively upon each such issue, the Fixed Conversion Price shall be adjusted by multiplying the then applicable Fixed Conversion Price by the following fraction: ---------------------------------------- A + B ---------------------------------------- (A + B) + [((C - D) x B) / C] ---------------------------------------- A = Total amount of shares convertible pursuant to this Note, the Purchase Agreement and the Related Agreements. B = Actual shares sold in the Offering C = Fixed Conversion Price D = Offering price D. Reclassification, etc. If the Borrower at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes, this Note, as to the unpaid Principal Amount and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change. 3.5 Issuance of New Note. Upon any partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Borrower to the Holder for the principal balance of this Note and interest which shall not have been converted or paid. The Borrower will pay no costs, fees or any other consideration to the Holder for the production and issuance of a new Note. ARTICLE IV EVENTS OF DEFAULT Upon the occurrence and continuance of an Event of Default beyond any applicable grace period, the Holder may make all sums of principal, interest and other fees then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable. In the event of such an acceleration, the amount due and owing to the Holder shall be 110% of the outstanding principal amount of the Note (plus accrued and unpaid interest and fees, if any) (the "DEFAULT PAYMENT"). If, with respect to any Event of Default, the Borrower cures the Event of Default, the Event of Default will be deemed to no longer exist and any rights and remedies of Holder pertaining to such Event of Default will be of no further force or effect. The Default Payment shall be applied first to any fees due and payable to Holder pursuant to this Note, the Purchase Agreement or the other Related Agreements, then to accrued and unpaid interest due on this Note and then to outstanding principal balance of this Note. The occurrence of any of the following events set forth in Sections 4.1 through 4.12, inclusive, is an "EVENT OF DEFAULT": 4.1 Failure to Pay Principal, Interest or other Fees. The Borrower fails to pay when due any installment of principal, interest or other fees hereon in accordance herewith, or the Borrower fails to pay when due any amount due under any other promissory note issued by Borrower, and in any such case, such failure shall continue for a period of five (5) days following the date upon which any such payment was due. 4.2 Breach of Covenant. The Borrower breaches any covenant or any other term or condition of this Note or the Purchase Agreement in any material respect, or the Borrower or any of its Subsidiaries breaches any covenant or any other term or condition of any Related Agreement in any material respect and, any such case, such breach, if subject to cure, continues for a period of thirty (30) days after the occurrence thereof. 4.3 Breach of Representations and Warranties. Any representation or warranty made by the Borrower in this Note or the Purchase Agreement, or by the Borrower or any of its Subsidiaries in any Related Agreement, shall, in any such case, be false or misleading in any material respect on the date that such representation or warranty was made or deemed made. 4.4 Receiver or Trustee. The Borrower or any of its Subsidiaries shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed. 4.5 Judgments. Any money judgment, writ or similar final process shall be entered or filed against the Borrower or any of its Subsidiaries or any of their respective property or other assets for more than $150,000, and shall remain unvacated, unbonded or unstayed for a period of thirty (30) days. 4.6 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any of its Subsidiaries and if commenced against the Borrower or any such Subsidiary shall not be dismissed within forty-five (45) days. 4.7 Stop Trade. An SEC stop trade order or Principal Market trading suspension of the Common Stock shall be in effect for five (5) consecutive days or five (5) days during a period of ten (10) consecutive days, excluding in all cases a suspension of all trading on a Principal Market, provided that the Borrower shall not have been able to cure such trading suspension within thirty (30) days of the notice thereof or list the Common Stock on another Principal Market within sixty (60) days of such notice. The "Principal Market" for the Common Stock shall include the NASD OTC Bulletin Board, NASDAQ SmallCap Market, NASDAQ National Market System, American Stock Exchange, or New York Stock Exchange (whichever of the foregoing is at the time the principal trading exchange or market for the Common Stock, or any securities exchange or other securities market on which the Common Stock is then being listed or traded. 4.8 Failure to Deliver Common Stock or Replacement Note. The Borrower shall fail (i) to timely deliver Common Stock to the Holder pursuant to and in the form required by this Note, and Section 9 of the Purchase Agreement, if such failure to timely deliver Common Stock shall not be cured within two (2) business days or (ii) to deliver a replacement Note to Holder within seven (7) business days following the required date of such issuance pursuant to this Note, the Purchase Agreement or any Related Agreement (to the extent required under such agreements). 4.9 Default Under Related Agreements or Other Agreements. The occurrence and continuance of any Event of Default (as defined in any Related Agreement) or any event of default (or similar term) under any other indebtedness. 4.10 Change in Control. A Change of Control (as defined below) shall occur with respect to the Company, unless Holder shall have expressly consented to such Change of Control in writing. A "Change of Control" shall mean any event or circumstance as a result of which (i) any "Person" or "group" (as such terms are defined in Sections 13(d) and 14(d) of the Exchange Act, as in effect on the date hereof), other than the Holder, is or becomes the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 35% or more on a fully diluted basis of the then outstanding voting equity interest of EPXR, (ii) the Board of Directors of EPXR shall cease to consist of a majority of the Board of Directors of EPXR on the date hereof (or directors appointed by a majority of the Board of Directors of EPXR in effect immediately prior to such appointment), (iii) EPXR sells all or any part of the equity interests of Voxx (or any securities convertible or exercisable into equity interests of Voxx), or agree to issue any equity interests of Voxx (or any securities convertible or exercisable into equity interests of Voxx) or permits the sale of all or substantially all of the assets of Voxx and its Subsidiaries prior to the VOXX IPO Date (other than (i) issuances to the Laurus Creditors (as defined in the Intercreditor Agreement) that are contemplated by the Laurus Documents (as defined in the Intercreditor Agreement), (ii) issuances to the Sands Creditors (as defined in the Intercreditor Agreement) that are contemplated by the Sands Documents (as defined in the Intercreditor Agreement) or (iii) issuances to the creditors in respect of the Bridge Loan Indebtedness in accordance with the terms set forth in Section 6.12(e)(i)(v) of the Purchase Agreement) or (iv) EPXR or any of its Subsidiaries merges or consolidates with, or sells or transfers all or substantially all of its assets to, any other person or entity; provided that (i) any Subsidiary of EPXR (other than Voxx) may merge or consolidate with any other Subsidiary of EPXR (other than Voxx) so long as the surviving entity in any such merger or consolidation is a Subsidiary of EPXR that is party to the Master Security Agreement, the Guaranty and the Stock Pledge Agreement and (ii) any Subsidiary of EPXR (other than Voxx) may sell or transfer all or substantially all of its assets to any person or entity that is party to the Master Security Agreement, the Guaranty and the Stock Pledge Agreement. Notwithstanding the foregoing contained in this Section 4.10, it is contemplated that Voxx and its subsidiaries will consummate an initial public offering of its common stock and it is hereby acknowledged and agreed to by Holder that such an initial public offering will not constitute an Event of Default under this 4.10. 4.11 Federal Trade Commission Action. The Federal Trade Commission or any other governmental agency shall commence any action against the Borrower or any or its Subsidiaries, the effect of any such action, or any judgment, order or settlement resulting therefrom, on the Borrower or any such Subsidiary is to restrain or deprive the Borrower and its Subsidiaries from utilizing any substantial portion of their assets determined on a consolidated basis. 4.12 May 2004 Note, Sands Documents and Related Agreements. An Event of Default, under and as defined in any of (i) that certain Secured Convertible Term Note, dated May 14, 2004, issued by EPXR to the Holder (as amended, modified or supplemented from time to time, the "May 2004 Note"), (ii) the Purchase Agreement referred to in the May 2004 Note (as amended, modified or supplemented from time to time, the "May 2004 Purchase Agreement"), (iii) the Related Agreements referred to in the May 2004 Purchase Agreement, (iv) the Sands Securities Purchase Agreement or (v) the Related Agreements referred to in the Sands Securities Purchase Agreement shall have occurred and be continuing. .. DEFAULT RELATED PROVISIONS 4.12 Payment Grace Period. Following the occurrence and continuance of an Event of Default beyond any applicable cure period hereunder, the Borrower shall pay the Holder a default interest rate of two percent (2%) per month on all amounts due and owing under the Note, which default interest shall be payable upon demand. 4.13 Conversion Privileges. The conversion privileges set forth in Article III shall remain in full force and effect immediately from the date hereof and until this Note is paid in full. 4.14 Cumulative Remedies. The remedies under this Note shall be cumulative. ARTICLE V MISCELLANEOUS 5.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available. 5.2 Notices. Any notice herein required or permitted to be given shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Borrower at the address provided in the Purchase Agreement executed in connection herewith, and to the Holder at the address provided in the Purchase Agreement for such Holder, with a copy to John E. Tucker, Esq., 825 Third Avenue, 14th Floor, New York, New York 10022, facsimile number (212) 541-4434, or at such other address as the Borrower or the Holder may designate by ten days advance written notice to the other parties hereto. A Notice of Conversion shall be deemed given when made to the Borrower pursuant to the Purchase Agreement. 5.3 Amendment Provision. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented, and any successor instrument issued pursuant to Section 3.5 hereof, as it may be amended or supplemented. 5.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns, and may be assigned by the Holder in accordance with the requirements of the Purchase Agreement. This Note shall not be assigned by the Borrower without the consent of the Holder. 5.5 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. Except as set forth below in this Section 5.5, any and all disputes, controversies and claims that the Borrower or any of its Subsidiaries may assert against the Holder arising out of or relating to this Note, the Purchase Agreement or any other Related Agreement shall be determined exclusively by arbitration (each such arbitration, an "Arbitration") in New York City before a panel of three neutral arbitrators agreed to by the Holder and the Borrower (collectively, the "Arbitrators") in accordance with and pursuant to the then existing commercial arbitration rules of the American Arbitration Association. The Borrower (on its behalf and on behalf of its subsidiaries) hereby irrevocably waives any right to assert such claims in any other forum. The Arbitrators shall have the power in their discretion to award specific performance or injunctive relief (but shall not have the power to render any incidental, special or punitive damages) and reasonable attorneys' fees and expenses to any party in any arbitration. The Arbitrators may not change, modify or alter any express condition, term or provision of this Note, the Purchase Agreement or of any other Related Agreement nor shall they have the power to render any award against the Holder that would have such effect. Each Arbitration award shall be final and binding upon the parties subject thereto and judgment may be entered thereon in any court of competent jurisdiction. The service of any notice, process, motion or other document in connection with an Arbitration or for the enforcement of any Arbitration award may be made in the same manner as communications may be given under Section 5.2 hereof. Notwithstanding the foregoing, the provisions of this Section 5.5 nor any other provision contained in this Note, the Purchase Agreement or in any other Related Agreement shall limit in any manner whatsoever the Holder's right to commence an action against or in connection with the Borrower, any of its Subsidiaries or their respective properties in any court of competent jurisdiction or otherwise utilize judicial process in connection with or arising out of the Holder's rights and remedies under this Note, the Purchase Agreement and/or any Related Agreement or otherwise (any such action, a "Court Action"). Court Actions may be brought by the Holder in any state or federal court of competent jurisdiction and the Borrower (on its behalf and on behalf of its Subsidiaries) irrevocably submits to the jurisdiction of such state and federal courts and irrevocably waives any claim or defense of inconvenient forum or lack of personal jurisdiction in such forum or right of removal or right to jury trial under any applicable law or decision or otherwise. Service of any notice, process, motion or other document in connection with a Court Action may be made in the same manner as communications may be given under Section 5.2. In addition, the Holder may serve process in any other manner permitted under applicable law. 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 Note 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 unenforceability of any other provision of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Borrower in any other jurisdiction to collect on the Borrower's obligations to Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court in favor of the Holder. 5.6 Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower. 5.7 Security Interest and Guarantee. The Holder has been granted a security interest (i) in certain assets of EPXR and its Subsidiaries as more fully described in the Master Security Agreement dated as of the date hereof and (ii) pursuant to the Stock Pledge Agreement dated as of the date hereof. The obligations of the Borrower under this Note are guaranteed by EPXR and certain Subsidiaries of EPXR pursuant to the Guaranty dated as of the date hereof. 5.8 Construction. Each party acknowledges that its legal counsel participated in the preparation of this Note 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 Note to favor any party against the other. 5.9 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay to Holder reasonable costs of collection, including reasonable attorney's fees. 5.10 Joint and Several Obligations. All obligations of VOXX and EPXR as co-borrowers under this Note and the Related Agreements (the "Obligations") shall be joint and several obligations, and the Borrower shall make payment upon the maturity of the Obligations by acceleration or otherwise, and such obligation and liability on the part of the Borrower shall in no way be affected by any extensions, renewals and forbearance granted by the Holder to the Borrower, failure of Holder to give either EPXR or VOXX any notice, any failure of Holder to pursue to preserve its rights against either EPXR and/or VOXX, the release by Holder of any collateral now or thereafter acquired from either EPXR, VOXX and/or any other subsidiary of EPXR, and such agreement by each of EPXR and VOXX to pay upon any notice issued pursuant thereto is unconditional and unaffected by prior recourse by Holder to either EPXR, VOXX, or any other subsidiary of EPXR or any collateral for the Obligations or the lack thereof. Each of EPXR and VOXX expressly waives any and all rights of subrogation, reimbursement, indemnity, exoneration, contribution or any other claim which each of EPXR and/or VOXX may now or hereafter have against the other or other person or entity directly or contingently liable for the Obligations, or against or with respect to any other's property (including, without limitation, any property which is collateral for the Obligations), arising from the existence or performance of this Note, the Purchase Agreement or any other Related Agreement, until all Obligations have been indefeasibly paid in full and this Note, the Purchase Agreement and the other Related Agreements have been irrevocably terminated. [Balance of page intentionally left blank; signature page follows.] IN WITNESS WHEREOF, the Borrower has caused this Convertible Term Note to be signed in its name effective as of this 29th day of April, (2005.) EPIXTAR CORP. By: /s/ Ilene Kaminsky -------------------------------- Name: Ilene Kaminsky ------------------------------ Title: CEO ----------------------------- WITNESS: - ------------------------------- VOXX CORPORATION By: /s/ Ilene Kaminsky -------------------------------- Name: Ilene Kaminsky -------------------------------- Title: CEO -------------------------------- WITNESS: - ------------------------------- EXHIBIT A NOTICE OF CONVERSION (To be executed by the Holder in order to convert all or part of the Note into Common Stock) [Name and Address of Holder] The Undersigned hereby converts $_________ of the principal due on [specify applicable Repayment Date] under the Convertible Term Note issued by Epixtar Corp. and Voxx Corporation dated __________ __, 2005 by delivery of Shares of Common Stock of Epixtar Corp. or Voxx Corporation, as applicable, on and subject to the conditions set forth in Article III of such Note. 1. Date of Conversion _______________________ 2. Shares To Be Delivered: _______________________ By Name:__________________________ Title:_________________________ EXHIBIT B CONVERSION NOTICE (To be executed by the Holder in order to convert all or part of a Monthly Amount into Common Stock) [Name and Address of Holder] Holder hereby converts $_________ of the Monthly Amount due on [specify applicable Repayment Date] under the Convertible Term Note issued by Epixtar Corp. and Voxx Corporation dated ____________ __, 2005 by delivery of Shares of Common Stock of Epixtar Corp. or Voxx Corporation, as applicable, on and subject to the conditions set forth in Article III of such Note. 1. Fixed Conversion Price: $_______________________ 2. Amount to be paid: $_______________________ 3. Shares To Be Delivered (2 divided by 1): __________________ 4. Cash payment to be made by Borrower : $_____________________ Date: ____________ LAURUS MASTER FUND, LTD. By: Name:_________________________ Title:________________________ EX-4.13.4 5 b406530ex4_13-4.txt EXHIBIT 4.13.4 EXHIBIT 4.13.4 EPIXTAR CORP. AND CERTAIN OF ITS SUBSIDIARIES MASTER SECURITY AGREEMENT To: Laurus Master Fund, Ltd. c/o M&C Corporate Services Limited P.O. Box 309 GT Ugland House South Church Street George Town Grand Cayman, Cayman Islands Date: April 29, (2005) To Whom It May Concern: 23. To secure the payment of all Obligations (as hereafter defined), Epixtar Corp., a Florida corporation (the "Company"), each of the other undersigned parties (other than Laurus Master Fund, Ltd, "Laurus")) and each other entity that is required to enter into this Master Security Agreement (each an "Assignor" and, collectively, the "Assignors") hereby assigns and grants to Laurus a continuing security interest in all of the following property now owned or at any time hereafter acquired by any Assignor, or in which any Assignor now have or at any time in the future may acquire any right, title or interest (the "Collateral"): all cash, cash equivalents, accounts, deposit accounts (including, without limitation, the Lockbox Deposit Accounts referred to below), inventory, equipment, goods, documents, instruments (including, without limitation, promissory notes), contract rights, general intangibles (including, without limitation, payment intangibles and an absolute right to license on terms no less favorable than those current in effect among our affiliates), chattel paper, supporting obligations, investment property (including, without limitation, all equity interests owned by any Assignor), letter-of-credit rights, trademarks, trademark applications, patents, patent applications, copyrights, copyright applications and tradestyles, in each case, in which any Assignor now have or hereafter may acquire any right, title or interest, all proceeds and products thereof (including, without limitation, proceeds of insurance) and all additions, accessions and substitutions thereto or therefore. In the event any Assignor wishes to finance the acquisition in the ordinary course of business of any hereafter acquired equipment and have obtained a commitment from a financing source to finance such equipment from an unrelated third party, Laurus agrees to release its security interest on such hereafter acquired equipment so financed by such third party financing source. Except as otherwise defined herein, all capitalized terms used herein shall have the meaning provided such terms in the Securities Purchase Agreement referred to below. 24. The term "Obligations" as used herein shall mean and include all debts, liabilities and obligations owing by each Assignor to Laurus arising under, out of, or in connection with: (i) that certain Securities Purchase Agreement dated as of the date hereof by and among the Company, Voxx Corporation, a Florida corporation ("Voxx") and Laurus (the "Securities Purchase Agreement") and (ii) the Related Agreements referred to in the Securities Purchase Agreement (the Securities Purchase Agreement and each Related Agreement, as each may be amended, modified, restated or supplemented from time to time, are collectively referred to herein as the "Documents"), and in connection with any documents, instruments or agreements relating to or executed in connection with the Documents or any documents, instruments or agreements referred to therein or otherwise, and in connection with any other indebtedness, obligations or liabilities of any Assignor and/or any other subsidiary of the Company to Laurus, whether now existing or hereafter arising, direct or indirect, liquidated or unliquidated, absolute or contingent, due or not due and whether under, pursuant to or evidenced by a note, agreement, guaranty, instrument or otherwise, in each case, irrespective of the genuineness, validity, regularity or enforceability of such Obligations, or of any instrument evidencing any of the Obligations or of any collateral therefor or of the existence or extent of such collateral, and irrespective of the allowability, allowance or disallowance of any or all of the Obligations in any case commenced by or against any Assignor and/or any other subsidiary of the Company under Title 11, United States Code, including, without limitation, obligations or indebtedness of each Assignor and/or any other subsidiary of the Company for post-petition interest, fees, costs and charges that would have accrued or been added to the Obligations but for the commencement of such case, irrespective of the allowability, allowance or disallowance of such post-petition interest, fees, costs and charges. 25. Each Assignor hereby jointly and severally represents, warrants and covenants to Laurus that: 25.1 it is a corporation, partnership or limited liability company, as the case may be, validly existing, in good standing and organized under the respective laws of its jurisdiction of organization set forth on Schedule A, and each Assignor will provide Laurus thirty (30) days' prior written notice of any change in any of its respective jurisdiction of organization; 25.2 its legal name is as set forth in its respective Certificate of Incorporation or other organizational document (as applicable) as amended through the date hereof and as set forth on Schedule A, and it will provide Laurus thirty (30) days' prior written notice of any change in its legal name; 25.3 its organizational identification number (if applicable) is as set forth on Schedule A hereto, and it will provide Laurus thirty (30) days' prior written notice of any change in any of its organizational identification number; 25.4 it is the lawful owner of the respective Collateral and it has the sole right to grant a security interest therein and will defend the Collateral against all claims and demands of all persons and entities; 25.5 it will keep its respective Collateral free and clear of all attachments, levies, taxes, liens, security interests and encumbrances of every kind and nature ("Encumbrances"), except (i) Encumbrances securing the Obligations and Sands Obligations (as defined in the Intercreditor Agreement), (ii) to the extent said Encumbrance does not secure indebtedness in excess of $100,000 and such Encumbrance is removed or otherwise released within thirty (30) days of the creation thereof, (iii) liens of warehousemen, mechanics, materialmen, workers, repairmen, common carriers, or landlords, liens for taxes, assessments or other governmental charges, and other similar liens arising by operation of law, in each case arising in the ordinary course of business and for amounts that are not yet due and payable or which are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and for which an adequate reserve or other appropriate provision shall have been made to the extent required by generally accepted accounting principals, (iv) pledges or deposits in connection with workers' compensation, unemployment insurance and other social security legislation and (v) the Encumbrances set forth on Schedule B hereto (the preceding clauses (i) through (iv), collectively, the "Permitted Encumbrances"); 25.6 it will, at its and the other Assignors joint and several cost and expense keep the Collateral in good state of repair (ordinary wear and tear excepted) and will not waste or destroy the same or any part thereof other than ordinary course discarding of items no longer used or useful in its or such other Assignors' business; 25.7 it will not without Laurus' prior written consent, sell, exchange, lease or otherwise dispose of the Collateral, whether by sale, lease or otherwise, except (I) as set forth in the accounts receivable factoring documents described on Schedule B hereto (as such documents are in effect on the date hereof) and (II) for the sale of inventory in the ordinary course of business and for the disposition or transfer in the ordinary course of business during any fiscal year of obsolete and worn-out equipment or equipment no longer necessary for its ongoing needs, having an aggregate fair market value of not more than $75,000 and only to the extent that: (a) the proceeds of any such disposition are used to acquire replacement Collateral which is subject to Laurus' first priority perfected security interest, or are used to repay Obligations or to pay general corporate expenses; and (b) following the occurrence of an Event of Default which continues to exist the proceeds of which are remitted to Laurus to be held as cash collateral for the Obligations; 25.8 it will insure or cause the Collateral to be insured in Laurus' name against loss or damage by fire, theft, burglary, pilferage, loss in transit and such other hazards as Laurus shall specify in amounts and under policies by insurers acceptable to Laurus and all premiums thereon shall be paid by such Assignor and the policies delivered to Laurus. If any such Assignor fails to do so, Laurus may procure such insurance and the cost thereof shall be promptly reimbursed by the Assignors, jointly and severally, and shall constitute Obligations; 25.9 it will at all reasonable times, upon reasonable notice and in a reasonable manner, allow Laurus or Laurus' representatives free access to and the right of inspection of the Collateral; 25.10 such Assignor (jointly and severally with each other Assignor) hereby indemnifies and saves Laurus harmless from all loss, costs, damage, liability and/or expense, including reasonable attorneys' fees, that Laurus may sustain or incur to enforce payment, performance or fulfillment of any of the Obligations and/or in the enforcement of this Master Security Agreement or in the prosecution or defense of any action or proceeding either against Laurus or any Assignor concerning any matter growing out of or in connection with this Master Security Agreement, and/or any of the Obligations and/or any of the Collateral except to the extent caused by Laurus' own gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and nonappealable decision); 25.11 Subject to Section 3(l) below, on or prior to the (30)th day following the Closing Date, each of Voxx and each Subsidiary of Voxx that is an Assignor (collectively, the "Voxx Assignors" and each, a "Voxx Assignor") will (x) irrevocably direct all of its present and future Voxx Account Debtors (as defined below) and other persons obligated to make payments constituting Collateral owned by any Voxx Assignor to make such payments directly to the lockboxes maintained by Voxx (the "Lockboxes") with Gibraltar Bank, N.A. or such other financial institution accepted by Laurus in writing as may be selected by such Voxx Assignor (the "Lockbox Bank") (each such direction pursuant to this clause (x), a "Direction Notice") and (y) provide Laurus with copies of each Direction Notice, each of which shall be agreed to and acknowledged by the respective Voxx Account Debtor. Upon receipt of such payments, the Lockbox Bank has agreed to deposit the proceeds of such payments in a deposit account maintained at the Lockbox Bank and accepted by Laurus in writing (collectively, the "Lockbox Deposit Accounts"). On or prior to the Closing Date, each Voxx Assignor shall and shall cause the Lockbox Bank to enter into all such documentation acceptable to Laurus pursuant to which, among other things, the Lockbox Bank agrees to, following notification by Laurus (which notification Laurus shall only give following the occurrence and during the continuance of an Event of Default), comply only with the instructions or other directions of Laurus concerning the Lockboxes and the Lockbox Deposit Account. All of each Voxx Assignor's invoices, account statements and other written or oral communications directing, instructing, demanding or requesting payment of any Voxx Account (as defined below) of any Voxx Assignor or any other amount constituting Collateral of any Voxx Assignor shall conspicuously direct that all payments be made to the Lockbox or such other address as Laurus may direct in writing. If, notwithstanding the instructions to Voxx Account Debtors, any Assignor or any other subsidiary of the Company receives any payments referred to in this Section 3(k), such Assignor or such other subsidiary of the Company shall immediately remit such payments to the Lockbox Deposit Account in their original form with all necessary endorsements. Until so remitted, such Assignor or such other subsidiary of the Company shall hold all such payments in trust for and as the property of Laurus and shall not commingle such payments with any of its other funds or property. For the purpose of this Master Security Agreement, (x) "Voxx Accounts" shall mean all "accounts", as such term is defined in the Uniform Commercial Code as in effect in the State of New York on the date hereof, now owned or hereafter acquired by any Voxx Assignor (or any other Assignor for the benefit of any Voxx Assignor) and (y) "Voxx Account Debtor" shall mean any person or entity who is or may be obligated with respect to, or on account of, a Voxx Account. Laurus and each Assignor agree that so long as no Event of Default has occurred and is continuing, only the Voxx Assignors shall be permitted to access and utilize the cash in the Lockboxes for its corporate purposes as directed by the Voxx Assignors; 25.12 Notwithstanding anything contained herein to the contrary, each Voxx Assignor is permitted to continue factoring its account receivables owed by Discover Financial Services, Inc. and CompuCredit Corporation to such Voxx Assignor both in the Philippines and in the United States. (the "Permitted Factoring Arrangements"). Each Voxx Assignor explicitly agrees (i) not to factor any accounts receivable owed to it other than those accounts receivable owed by Discover Financial Services, Inc. and CompuCredit Corporation and (ii) in respect of all receipts and other amounts owed any Voxx Assignor by any factoring company (each, a "Factor") conducting the Permitted Factoring Arrangements, (x) a Factor shall be deemed a Voxx Account Debtor and (y) all receipts and other amounts payable by a Factor to any Voxx Assignor shall be deposited and handled in accordance with the provisions of Section 3(k) hereof; 25.13 For so long as their shall be any Obligations due and owing to Laurus in respect of this Master Security Agreement and/or any Document, all business of the type and nature currently conducted by the Company and its subsidiaries (the "Voxx Business") shall continue to be conducted by the Company and its subsidiaries (either now existing or hereon after formed as a wholly-owned subsidiary) (the "Business Entities") hereon in and after; and (n) From and after the date hereof, the Company and Voxx Corporation will, as soon as practicable, use their collective best efforts to cause all assets, accounts, obligations, functions and other elements associated with the Voxx Business which are not, as of the date hereof, conducted or owned by Voxx Corporation or any of its Subsidiaries, to be consolidated within the Voxx Business Entities for the purpose of centralizing the Voxx Business within the Voxx Business Entities and thereby establishing the Voxx Business as a free-standing, independent operating enterprise capable of consummating an initial public offering with minimal operational and financial reliance upon the Company and its Subsidiaries that do not consist of the Voxx Business Entities 26. The occurrence of any of the following events or conditions shall constitute an "Event of Default" under this Master Security Agreement: 26.1 breach of any covenant, warranty, representation or statement made or furnished to Laurus by any Assignor or on any Assignor's benefit was false or misleading in any material respect when made or furnished, and if subject to cure, shall not be cured for a period of thirty (30) days; (b) the loss, theft, substantial damage, destruction, sale or encumbrance to or of any of the Collateral or the making of any levy, seizure or attachment thereof or thereon except to the extent: (a) such loss is covered by insurance proceeds which are used to replace the item or repay Laurus; or (b) said levy, seizure or attachment does not secure indebtedness in excess of $100,000 and such levy, seizure or attachment has not been removed or otherwise released within thirty (30) days of the creation or the assertion thereof; 26.2 any Assignor shall become insolvent, cease operations, dissolve, terminate our business existence, make an assignment for the benefit of creditors, suffer the appointment of a receiver, trustee, liquidator or custodian of all or any part of Assignors' property; 26.3 any proceedings under any bankruptcy or insolvency law shall be commenced by or against any Assignor and if commenced against any Assignor shall not be dismissed within forty-five (45) days; 26.4 the Company shall repudiate, purport to revoke or fail to perform any or all of its obligations under the Note (after passage of applicable cure period, if any); or 26.5 an Event of Default shall have occurred under and as defined in any Document. 27. Upon the occurrence of any Event of Default and at any time thereafter, Laurus may declare all Obligations immediately due and payable and Laurus shall have the remedies of a secured party provided in the Uniform Commercial Code as in effect in the State of New York, this Agreement and other applicable law. Upon the occurrence of any Event of Default and at any time thereafter, Laurus will have the right to take possession of the Collateral and to maintain such possession on our premises or to remove the Collateral or any part thereof to such other premises as Laurus may desire. Upon Laurus' request, each of the Assignors shall assemble or cause the Collateral to be assembled and make it available to Laurus at a place designated by Laurus. If any notification of intended disposition of any Collateral is required by law, such notification, if mailed, shall be deemed properly and reasonably given if mailed at least ten (10) days before such disposition, postage prepaid, addressed to any Assignor either at such Assignor's address shown herein or at any address appearing on Laurus' records for such Assignor. Any proceeds of any disposition of any of the Collateral shall be applied by Laurus to the payment of all expenses in connection with the sale of the Collateral, including reasonable attorneys' fees and other legal expenses and disbursements and the reasonable expense of retaking, holding, preparing for sale, selling, and the like, and any balance of such proceeds may be applied by Laurus toward the payment of the Obligations in such order of application as Laurus may elect, and each Assignor shall be liable for any deficiency. For the avoidance of doubt, following the occurrence and during the continuance of an Event of Default, Laurus shall have the immediate right to withdraw any and all monies contained in the Lockbox Deposit Accounts and any other deposit accounts under the control of Laurus and apply same to the repayment of the Obligations in accordance with the terms of the Intercreditor Agreement. Notwithstanding anything to the contrary contained in this Master Security Agreement, the Purchase Agreement or any Related Agreement, in the event that Laurus exercises the remedies provided for in this Section 5, Laurus agrees to apply the amounts (if any) set forth in the Lockbox Deposit Accounts prior to exercising its other remedies provided for in this Section 5. 28. If any Assignor defaults in the performance or fulfillment of any of the terms, conditions, promises, covenants, provisions or warranties on such Assignor's part to be performed or fulfilled under or pursuant to this Master Security Agreement (following any applicable grace period), Laurus may, at its option without waiving its right to enforce this Master Security Agreement according to its terms, immediately or at any time thereafter and without notice to any Assignor, perform or fulfill the same or cause the performance or fulfillment of the same for each Assignor's joint and several account and at each Assignor's joint and several cost and expense, and the cost and expense thereof (including reasonable attorneys' fees) shall be added to the Obligations and shall be payable on demand with interest thereon at the highest rate permitted by law. 29. Each Assignor appoints Laurus, any of Laurus' officers, employees or any other person or entity whom Laurus may designate as our attorney, with power to execute such documents in each of our behalf and to supply any omitted information and correct patent errors in any documents executed by any Assignor or on any Assignor's behalf; to file financing statements against us covering the Collateral (and, in connection with the filing of any such financing statements, describe the Collateral as "all assets and all personal property, whether now owned and/or hereafter acquired" (or any substantially similar variation thereof)); following any Event of Default and any applicable period of grace, to sign our name on public records; and to do all other things Laurus deem necessary to carry out this Master Security Agreement. Each Assignor hereby ratifies and approves all acts of the attorney and neither Laurus nor the attorney will be liable for any acts of commission or omission, nor for any error of judgment or mistake of fact or law other than gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). This power being coupled with an interest, is irrevocable so long as any Obligations remains unpaid. 30. No delay or failure on Laurus' part in exercising any right, privilege or option hereunder shall operate as a waiver of such or of any other right, privilege, remedy or option, and no waiver whatever shall be valid unless in writing, signed by Laurus and then only to the extent therein set forth, and no waiver by Laurus of any default shall operate as a waiver of any other default or of the same default on a future occasion. Laurus' books and records containing entries with respect to the Obligations shall be admissible in evidence in any action or proceeding, shall be binding upon each Assignor for the purpose of establishing the items therein set forth and shall constitute prima facie proof thereof (in the absence of manifest error or fraud). Laurus shall have the right to enforce any one or more of the remedies available to Laurus, successively, alternately or concurrently. Each Assignor agrees to join with Laurus in executing financing statements or other instruments to the extent required by the Uniform Commercial Code in form satisfactory to Laurus and in executing such other documents or instruments as may be required or deemed necessary by Laurus for purposes of affecting or continuing Laurus' security interest in the Collateral. 31. This Master Security Agreement shall be governed by and construed in accordance with the laws of the State of New York and cannot be terminated orally. All of the rights, remedies, options, privileges and elections given to Laurus hereunder shall inure to the benefit of Laurus' successors and assigns. The term "Laurus" as herein used shall include Laurus, individually and in its capacity as collateral agent pursuant to the Intercreditor Agreement, any parent of Laurus', any of Laurus' subsidiaries and any co-subsidiaries of Laurus' parent, whether now existing or hereafter created or acquired, and all of the terms, conditions, promises, covenants, provisions and warranties of this Agreement shall inure to the benefit of each of the foregoing, and shall bind the representatives, successors and assigns of each Assignor. Except as set forth below in this Section 9, any and all disputes, controversies and claims that any Assignor may assert against Laurus arising out of or relating to this Master Security Agreement or any other Document shall be determined exclusively by arbitration (each such arbitration, an "Arbitration") in New York City before a panel of three neutral arbitrators agreed to by Laurus and the Company (collectively, the "Arbitrators") in accordance with and pursuant to the then existing commercial arbitration rules of the American Arbitration Association. Each Assignor hereby irrevocably waives any right to assert such claims in any other forum. The Arbitrators shall have the power in their discretion to award specific performance or injunctive relief (but shall not have the power to render any incidental, special or punitive damages) and reasonable attorneys' fees and expenses to any party in any arbitration. The Arbitrators may not change, modify or alter any express condition, term or provision of this Master Security Agreement or of any other Document nor shall they have the power to render any award against Laurus that would have such effect. Each Arbitration award shall be final and binding upon the parties subject thereto and judgment may be entered thereon in any court of competent jurisdiction. The service of any notice, process, motion or other document in connection with an Arbitration or for the enforcement of any Arbitration award may be made in the same manner as communications may be given under Section 10 hereof. Notwithstanding the foregoing, the provisions of this Section 9 nor any other provision contained in this Master Security Agreement or in any other Document shall limit in any manner whatsoever the Laurus' right to commence an action against or in connection with any Assignor or their respective properties in any court of competent jurisdiction or otherwise utilize judicial process in connection with or arising out of Laurus' rights and remedies under this Master Security Agreement and/or any other Document or otherwise (any such action, a "Court Action"). Court Actions may be brought by Laurus in any state or federal court of competent jurisdiction and each Assignor irrevocably submits to the jurisdiction of such state and federal courts and irrevocably waives any claim or defense of inconvenient forum or lack of personal jurisdiction in such forum or right of removal or right to jury trial under any applicable law or decision or otherwise. Service of any notice, process, motion or other document in connection with a Court Action may be made in the same manner as communications may be given under Section 10. In addition, Laurus may serve process in any other manner permitted under applicable law. 32. All notices from Laurus to any Assignor shall be sufficiently given if mailed or delivered to such Assignor's address set forth below. 11. It is understood and agreed that any person or entity that desires to become an Assignor hereunder, or is required to execute a counterpart of this Master Security Agreement after the date hereof pursuant to the requirements of any Document, shall become an Assignor hereunder by (x) executing a Joinder Agreement in form and substance satisfactory to Laurus, (y) delivering supplements to such exhibits and annexes to such Documents as Laurus shall reasonably request and (z) taking all actions as specified in this Master Security Agreement as would have been taken by such Assignor had it been an original party to this Master Security Agreement, in each case with all documents required above to be delivered to Laurus and with all documents and actions required above to be taken to the reasonable satisfaction of Laurus. 12. Notwithstanding anything to the contrary contained in this Master Security Agreement, the terms and conditions of this Master Security Agreement shall be subject in all respects to the terms and conditions of the Intercreditor Agreement. In the event that the terms and conditions of this Master Security Agreement are in contravention of the terms and conditions of the Intercreditor Agreement, the terms and conditions of the Intercreditor Agreement shall prevail. No provision of this Master Security Agreement shall be amended, modified, supplemented, restated, terminated or waived in any respect except by a writing duly executed by each Assignor and Laurus. Very truly yours, EPIXTAR CORP. By: /s/ Ilene Kaminsky -------------------------------- Name: Ilene Kaminsky Title: CEO Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 NOL GROUP, INC. By: /s/ Deborah Gambone -------------------------------- Name: Deborah Gambone Title: Vice President Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 NATIONAL ONLINE SERVICES, INC. By: /s/ Deborah Gambone -------------------------------- Name: Deborah Gambone Title: Vice President Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 LIBERTY ONLINE SERVICES, INC. By: /s/ Deborah Gambone -------------------------------- Name: Deborah Gambone Title: Vice President Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 AMERIPAGES, INC. By: /s/ Deborah Gambone -------------------------------- Name: Deborah Gambone Title: Vice President Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 B2B ADVANTAGE, INC. By: /s/ Deborah Gambone -------------------------------- Name: Deborah Gambone Title: Vice President Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 EPIXTAR INTERNATIONAL CONTACT CENTER GROUP, INC. By: /s/ Ilene Kaminsky -------------------------------- Name: Ilene Kaminsky Title: CEO Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 VOXX CORPORATION By: /s/ Ilene Kaminsky -------------------------------- Name: Ilene Kaminsky Title: CEO Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 EPIXTAR MARKETING CORP. By: /s/ Ilene Kaminsky_ -------------------------------- Name: Ilene Kaminskyk Title: CEO Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 ACKNOWLEDGED: LAURUS MASTER FUND, LTD. By: /s/ Authorized Officer -------------------------------- Name: Title SCHEDULE B Permitted Liens EX-4.13.5 6 b406530ex4_13-5.txt EXHIBIT 4.13.5 EXHIBIT 4.13.5 EPXR REGISTRATION RIGHTS AGREEMENT This EPXR Registration Rights Agreement (this "Agreement") is made and entered into as of April 29, 2005, by and between Epixtar Corp., 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, Voxx Corporation, a Florida corporation, and the Company (as amended, modified or supplemented from time to time, the "Securities Purchase Agreement"), and pursuant to the Note referred to therein. The Company and the Purchaser hereby agree as follows: 1.33. Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Securities Purchase Agreement shall have the meanings given such terms in the Securities Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: "Commission" means the Securities and Exchange Commission. "Common Stock" means shares of the Company's common stock, par value $0.001 per share. "Effectiveness Date" means (i) with respect to the initial Registration Statement required to be filed hereunder, 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 Registration Statement required to be filed hereunder in respect of the shares of Common Stock issuable upon conversion of the Note, a date no later than thirty (30) days following the date hereof, and (ii) the 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 Note or otherwise, thirty (30) days after the occurrence such event or the date of the adjustment of the Fixed Conversion Price or Exercise Price, as the case may be. "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 arbitration, 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. "Registration Statement" means each registration statement required to be filed hereunder, including the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. "Rule 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 415" means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 424" means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Securities Act" means the Securities Act of 1933, as amended, and any successor statute. "Securities Purchase Agreement" has the meaning given to such term in the Preamble hereto. "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. 2.34. Registration. (a)34.1 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 S-1 or SB-2 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-1 or 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)34.2 If: (i) the Registration Statement is not filed on or prior to the Filing Date; (ii) the Registration Statement is not declared effective by the Commission by the Effectiveness Date; (iii) after the Registration Statement is filed with and declared effective by the Commission, the Registration Statement ceases to be effective (by suspension or otherwise) as to all Registrable Securities to which it is required to relate at any time prior to the expiration of the Effectiveness Period (without being succeeded immediately by an additional registration statement filed and declared effective) for a period of time which shall exceed 30 days in the aggregate per year or more than 20 consecutive calendar days (defined as a period of 365 days commencing on the date the Registration Statement is declared effective); or (iv) the Common Stock is not listed or quoted, or is suspended from trading on any Trading Market for a period of three (3) consecutive Trading Days (provided the Company shall not have been able to cure such trading suspension within 30 days of the notice thereof or list the Common Stock on another Trading Market); (any such failure or breach being referred to as an "Event," and for purposes of clause (i) or (ii) the date on which such Event occurs, or for purposes of clause (iii) the date which such 30 day or 20 consecutive day period (as the case may be) is exceeded, or for purposes of clause (iv) the date on which such three (3) Trading Day period is exceeded, being referred to as "Event Date"), then until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as liquidated damages and not as a penalty, equal to 2.0% for each thirty (30) day period (prorated for partial periods) on a daily basis of the original principal amount of the Note. While such Event continues, such liquidated damages shall be paid not less often than each thirty (30) days. Any unpaid liquidated damages as of the date when an Event has been cured by the Company shall be paid within three (3) days following the date on which such Event has been cured by the Company. (c) Within three business days of the Effectiveness Date, the Company shall cause its counsel to issue a blanket opinion in the form attached hereto as Exhibit A, to the transfer agent stating that the shares are subject to an effective registration statement and can be reissued free of restrictive legend upon notice of a sale by 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. 3.35. 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)35.1 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)35.2 prepare and file with the Commission such amendments and supplements to the Registration Statement and the Prospectus used in connection therewith as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by the Registration Statement and to keep such Registration Statement effective until the expiration of the Effectiveness Period; (c)35.3 furnish to the Purchaser such number of copies of the Registration Statement and the Prospectus included therein (including each preliminary Prospectus) as the Purchaser reasonably may request to facilitate the public sale or disposition of the Registrable Securities covered by the Registration Statement; (d)35.4 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)35.5 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)35.6 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)35.7 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. 4.36. 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. 5.37. Indemnification. (a)37.1 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)37.2 In the event of a registration of the Registrable Securities under the Securities Act pursuant to this Agreement, the Purchaser will indemnify and hold harmless the Company, and its officers, directors and each other person, if any, who controls the Company within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact which was furnished in writing by the Purchaser to the Company expressly for use in (and such information is contained in) the Registration Statement under which such Registrable Securities were registered under the Securities Act pursuant to this Agreement, any preliminary Prospectus or final Prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such person for any reasonable legal or other expenses incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, provided, however, that the Purchaser will be liable in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished in writing to the Company by or on behalf of the Purchaser specifically for use in any such document. Notwithstanding the provisions of this paragraph, the Purchaser shall not be required to indemnify any person or entity in excess of the amount of the aggregate net proceeds received by the Purchaser in respect of Registrable Securities in connection with any such registration under the Securities Act. (c)37.3 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)37.4 In order to provide for just and equitable contribution in the event of joint liability under the Securities Act in any case in which either (i) the Purchaser, or any officer, director or controlling person of the Purchaser, makes a claim for indemnification pursuant to this Section 5 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 5 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of the Purchaser or such officer, director or controlling person of the Purchaser in circumstances for which indemnification is provided under this Section 5; then, and in each such case, the Company and the Purchaser will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that the Purchaser is responsible only for the portion represented by the percentage that the public offering price of its securities offered by the Registration Statement bears to the public offering price of all securities offered by such Registration Statement, provided, however, that, in any such case, (A) the Purchaser will not be required to contribute any amount in excess of the public offering price of all such securities offered by it pursuant to such Registration Statement; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation. 6.38. Representations, Warranties and Covenants. (a)38.1 The Common Stock of the Company is registered pursuant to Section 12(b) or 12(g) of the Exchange Act and, except with respect to certain matters which the Company has disclosed to the Purchaser on Schedule 4.21 to the Securities Purchase Agreement, the Company has timely filed all proxy statements, reports, schedules, forms, statements and other documents required to be filed by it under the Exchange Act. The Company has filed (i) its Annual Report on Form 10-K for its fiscal year ended December 31, 2004 and (ii) its Quarterly Report on Form 10-Q for its fiscal quarter ended September 30, 2004, and (iii) the Form 8-K filings which it has made during the fiscal year 2005 to date (collectively, the "SEC Reports"). Each SEC Report was, at the time of its filing, in substantial compliance with the requirements of its respective form and none of the SEC Reports, nor the financial statements (and the notes thereto) included in the SEC Reports, as of their respective filing dates, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed) and fairly present in all material respects the financial condition, the results of operations and the cash flows of the Company and its subsidiaries, on a consolidated basis, as of, and for, the periods presented in each such SEC Report. (b)38.2 The Common Stock is traded on the NASD OTCBB and satisfies all requirements for the continuation of such trading. The Company has not received any notice that its Common Stock will not be eligible to be traded on the NASD OTCBB (except for prior notices which have been fully remedied) or that the Common Stock does not meet all requirements for the continuation of such trading. (c)38.3 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)38.4 The Note and the shares of Common Stock which the Purchaser may acquire pursuant to 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 or as otherwise permitted by this Agreement, the Purchase Agreement or any Related Agreement. (e)38.5 The Company understands the nature of the Registrable Securities issuable upon the conversion of the Note and recognizes that the issuance of such Registrable Securities may have a potential dilutive effect. The Company specifically acknowledges that its obligation to issue the Registrable Securities is binding upon the Company and enforceable regardless of the dilution such issuance may have on the ownership interests of other shareholders of the Company. (f)38.6 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)38.7 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. 7.39. Miscellaneous. (a)39.1 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)39.2 No Piggyback on Registrations. Except as and to the extent specified in Schedule 7(b) hereto, neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statement other than the Registrable Securities, and the Company shall not after the date hereof enter into any agreement providing any such right for inclusion of shares in the Registration Statement to any of its security holders. Except as and to the extent specified in Schedule 7(b) hereto, the Company has not previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been fully satisfied. (c)39.3 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)39.4 Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of a Discontinuation Event (as defined below), such Holder will forthwith discontinue disposition of such Registrable Securities under the applicable Registration Statement until such Holder's receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph. For purposes of this Section 7(d), a "Discontinuation Event" shall mean (i) when the Commission notifies the Company whether there will be a "review" of such Registration Statement and whenever the Commission comments in writing on such Registration Statement (the Company shall provide true and complete copies thereof and all written responses thereto to each of the Holders); (ii) any request by the Commission or any other Federal or state governmental authority for amendments or supplements to such Registration Statement or Prospectus or for additional information; (iii) the issuance by the Commission of any stop order suspending the effectiveness of such Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and/or (v) the occurrence of any event or passage of time that makes the financial statements included in such Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (e)39.5 Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to each Holder written notice of such determination and, if within fifteen days after receipt of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such holder requests to be registered to the extent the Company may do so without violating registration rights of others which exist as of the date of this Agreement, subject to customary underwriter cutbacks applicable to all holders of registration rights and subject to obtaining any required the consent of any selling stockholder(s) to such inclusion under such registration statement. (f)39.6 Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of the then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of certain Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. (g)39.7 Notices. Any notice or request hereunder may be given to the Company or the Purchaser at the respective addresses set forth below or as may hereafter be specified in a notice designated as a change of address under this Section 7(g). Any notice or request hereunder shall be given by registered or certified mail, return receipt requested, hand delivery, overnight mail, Federal Express or other national overnight next day carrier (collectively, "Courier") or telecopy (confirmed by mail). Notices and requests shall be, in the case of those by hand delivery, deemed to have been given when delivered to any party to whom it is addressed, in the case of those by mail or overnight mail, deemed to have been given three (3) business days after the date when deposited in the mail or with the overnight mail carrier, in the case of a Courier, the next business day following timely delivery of the package with the Courier, and, in the case of a telecopy, when confirmed. The address for such notices and communications shall be as follows: If to the Company: Epixtar Corp. 11900 Biscayne Boulevard, Suite 700 Miami, Florida 33181 Attention: Corporate Secretary Facsimile: 305-503-8610 with a copy to: Michael DiGiovanna, Esq. 212 Carnegie Center Suite 206 Princeton, New Jersey 08540 Facsimile: 609-452-9473 If to a Purchaser: To the address set forth under such Purchaser name on the signature pages hereto. If to any other Person who is then the registered Holder: To the address of such Holder as it appears in the stock transfer books of the Company. or such other address as may be designated in writing hereafter in accordance with this Section 7(g) by such Person. (h)39.8 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written consent of each Holder. Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under the Notes and the Security Agreement with the prior written consent of the Company, which consent shall not be unreasonably withheld. (i)39.9 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)39.10 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. Except as set forth below in this Section 7(j), any and all disputes, controversies and claims that the Company or any of its Subsidiaries may assert against the Purchaser arising out of or relating to this Agreement, the Securities Purchase Agreement or any other Related Agreement shall be determined exclusively by arbitration (each such arbitration, an "Arbitration") in New York City before a panel of three neutral arbitrators agreed to by the Purchaser and the Company (collectively, the "Arbitrators") in accordance with and pursuant to the then existing commercial arbitration rules of the American Arbitration Association. The Company (on its behalf and on behalf of its Subsidiaries) hereby irrevocably waives any right to assert such claims in any other forum. The Arbitrators shall have the power in their discretion to award specific performance or injunctive relief (but shall not have the power to render any incidental, special or punitive damages) and reasonable attorneys' fees and expenses to any party in any arbitration. The Arbitrators may not change, modify or alter any express condition, term or provision of this Agreement, the Securities Purchase Agreement or of any other Related Agreement nor shall they have the power to render any award against the Purchaser that would have such effect. Each Arbitration award shall be final and binding upon the parties subject thereto and judgment may be entered thereon in any court of competent jurisdiction. The service of any notice, process, motion or other document in connection with an Arbitration or for the enforcement of any Arbitration award may be made in the same manner as communications may be given under Section 7(g) hereof. Notwithstanding the foregoing, the provisions of this Section 7(j) nor any other provision contained in this Agreement, the Securities Purchase Agreement or in any Related Agreement shall limit in any manner whatsoever the Purchaser's right to commence an action against or in connection with the Company, any of its Subsidiaries or their respective properties in any court of competent jurisdiction or otherwise utilize judicial process in connection with or arising out of the Purchaser's rights and remedies under this Agreement, the Securities Purchase Agreement and/or any Related Agreement or otherwise (any such action, a "Court Action"). Court Actions may be brought by the Purchaser in any state or federal court of competent jurisdiction and the Company (on its behalf and on behalf of its Subsidiaries) irrevocably submits to the jurisdiction of such state and federal courts and irrevocably waives any claim or defense of inconvenient forum or lack of personal jurisdiction in such forum or right of removal or right to jury trial under any applicable law or decision or otherwise. Service of any notice, process, motion or other document in connection with a Court Action may be made in the same manner as communications may be given under Section 7(g). In addition, the Purchaser may serve process in any other manner permitted under applicable law. If either party shall commence a Proceeding to enforce any provisions of this Agreement, the Securities Purchase Agreement or any other Related Agreement, then the prevailing party in such Proceeding shall be reimbursed by the other party for its reasonable attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding. (k)39.11 Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. (l)39.12 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)39.13 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above. EPIXTAR CORP. LAURUS MASTER FUND, LTD. By: /s/ Ilene Kaminsky By: /s/ Authorized Officer ---------------------- ----------------------------- Name: Ilene Kaminsky Name: ---------------------- ----------------------------- Title: CEO Title: ---------------------- ----------------------------- Address for Notices: 825 Third Avenue -- 14th Floor New York, NY 10022 Attention: Eugene Grin Facsimile: 212-541-4434 EXHIBIT A [Month __, 2004] [Continental Stock Transfer & Trust Company Two Broadway New York, NY 10004 Attn: William Seegraber] Re: Epixtar Corp. Registration Statement on Form [S-1][SB-2] Ladies and Gentlemen: As counsel to Epixtar Corp., 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] SCHEDULE A Shares Selling Stockholder Being Offered - ------------------- ------------- EX-4.13.6 7 b406530ex4_13-6.txt EXHIBIT 4.13.6 EXHIBIT 4.13.6 VOXX REGISTRATION RIGHTS AGREEMENT This VOXX Registration Rights Agreement (this "Agreement") is made and entered into as of April 29, 2005, by and between Voxx Corporation, 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, Epixtar Corp., a Florida corporation, and the Company (as amended, modified or supplemented from time to time, the "Securities Purchase Agreement"), and pursuant to the Note. The Company and the Purchaser hereby agree as follows: 40. Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Securities Purchase Agreement shall have the meanings given such terms in the Securities Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: "Commission" means the Securities and Exchange Commission. "Common Stock" means shares of the Company's common stock, par value $0.001 per share. "Effectiveness Date" means (i) with respect to the initial Registration Statement required to be filed hereunder, a date no later than ninety (90) days following the Filing Date of the initial Registration Statement required to be filed hereunder 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 in respect of the shares of Common Stock issuable upon conversion of the Note and the exercise of the Warrants and the Option, a date no later than (x) in the event that the Company consummates an initial public offering of its Common Stock (an "IPO") on or prior to the one (1) year anniversary of the date hereof, (I) the sixth month anniversary of the consummation of the IPO; provided that in the event that the underwriter representing the Company in connection with such IPO requires the Common Stock to be subject to lock-up requirements for a period of time, the Filing Date shall be extended until the earlier of (A) the termination of such "lock-up" requirements and (B) the one year anniversary of the consummation of the IPO and (y) in the event that the Company does not consummate an IPO on or prior to the one (1) year anniversary of the date hereof, upon the demand of the Purchaser; and (ii) the shares of Common Stock issuable to the Holder as a result of adjustments to the Fixed Conversion Price or Exercise Price made pursuant to the Note, the Warrant, the Option or otherwise to the extent occurring after filing of the initial Registration Statement, thirty (30) days after the occurrence of such event or the date of the adjustment of the Fixed Conversion Price or Exercise Price, as the case may be. "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. "Option" shall have the meaning set forth in the Securities Purchase Agreement. "Proceeding" means an arbitration, action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. "Prospectus" means the prospectus included in the Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. "Registrable Securities" means the shares of Common Stock issued upon the conversion of the Note and issuable upon exercise of the Warrants and the Option. "Registration Statement" means each registration statement required to be filed hereunder, including the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. "Rule 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 415" means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 424" means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Securities Act" means the Securities Act of 1933, as amended, and any successor statute. "Securities Purchase Agreement" has the meaning given to such term in the Preamble hereto. "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. "Trading Market Date" means the date that the Common Stock is listed or quoted, as the case may be, on a Trading Market. "Warrants" shall have the meaning set forth in the Securities Purchase Agreement and shall also include any other warrant issued after the date hereof in connection with the Securities Purchase Agreement, the Related Agreements and any amendment or modification thereto. 2.41. Registration. (a)41.1 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 S-1 or SB-2 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-1 or 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)41.2 If: (i) the Registration Statement is not filed on or prior to the Filing Date; (ii) the Registration Statement is not declared effective by the Commission by the Effectiveness Date; (iii) after the Registration Statement is filed with and declared effective by the Commission, the Registration Statement ceases to be effective (by suspension or otherwise) as to all Registrable Securities to which it is required to relate at any time prior to the expiration of the Effectiveness Period (without being succeeded immediately by an additional registration statement filed and declared effective) for a period of time which shall exceed 30 days in the aggregate per year or more than 20 consecutive calendar days (defined as a period of 365 days commencing on the date the Registration Statement is declared effective); or (iv) at any time after the Trading Market Date, 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 2.0% for each thirty (30) day period (prorated for partial periods) on a daily basis of the original principal amount of the Note. While such Event continues, such liquidated damages shall be paid not less often than each thirty (30) days. Any unpaid liquidated damages as of the date when an Event has been cured by the Company shall be paid within three (3) days following the date on which such Event has been cured by the Company. (c) Within three business days of the Effectiveness Date, the Company shall cause its counsel to issue a blanket opinion in the form attached hereto as Exhibit A, to the transfer agent stating that the shares are subject to an effective registration statement and can be reissued free of restrictive legend upon notice of a sale by 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. 3.42. 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)42.1 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)42.2 prepare and file with the Commission such amendments and supplements to the Registration Statement and the Prospectus used in connection therewith as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by the Registration Statement and to keep such Registration Statement effective until the expiration of the Effectiveness Period; (c)42.3 furnish to the Purchaser such number of copies of the Registration Statement and the Prospectus included therein (including each preliminary Prospectus) as the Purchaser reasonably may request to facilitate the public sale or disposition of the Registrable Securities covered by the Registration Statement; (d)42.4 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)42.5 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)42.6 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)42.7 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. 4.43. 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. 5.44. Indemnification. (a)44.1 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)44.2 In the event of a registration of the Registrable Securities under the Securities Act pursuant to this Agreement, the Purchaser will indemnify and hold harmless the Company, and its officers, directors and each other person, if any, who controls the Company within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact which was furnished in writing by the Purchaser to the Company expressly for use in (and such information is contained in) the Registration Statement under which such Registrable Securities were registered under the Securities Act pursuant to this Agreement, any preliminary Prospectus or final Prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such person for any reasonable legal or other expenses incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, provided, however, that the Purchaser will be liable in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished in writing to the Company by or on behalf of the Purchaser specifically for use in any such document. Notwithstanding the provisions of this paragraph, the Purchaser shall not be required to indemnify any person or entity in excess of the amount of the aggregate net proceeds received by the Purchaser in respect of Registrable Securities in connection with any such registration under the Securities Act. (c)44.3 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)44.4 In order to provide for just and equitable contribution in the event of joint liability under the Securities Act in any case in which either (i) the Purchaser, or any officer, director or controlling person of the Purchaser, makes a claim for indemnification pursuant to this Section 5 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 5 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of the Purchaser or such officer, director or controlling person of the Purchaser in circumstances for which indemnification is provided under this Section 5; then, and in each such case, the Company and the Purchaser will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that the Purchaser is responsible only for the portion represented by the percentage that the public offering price of its securities offered by the Registration Statement bears to the public offering price of all securities offered by such Registration Statement, provided, however, that, in any such case, (A) the Purchaser will not be required to contribute any amount in excess of the public offering price of all such securities offered by it pursuant to such Registration Statement; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation. 6.45. Representations, Warranties and Covenants. (a)45.1 On and after the Trading Market Date, the Common Stock of the Company shall be registered pursuant to Section 12(b) or 12(g) of the Exchange Act (b)45.2 On and after the Trading Market Date, the Common Stock shall be traded on a Trading Marketand the Common Stock shall satisfy all requirements for the continuation of such trading. (c)45.3 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 (other than the concurrent offering made pursuant to the Sands Securities Purchase Agreement and the Related Agreements referred to therein) 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)45.4 The Option, the Warrant, the Note and the shares of Common Stock which the Purchaser may acquire pursuant to the Option, 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 or as otherwise permitted by this Agreement, the Purchase Agreement or any Related Agreement. (e)45.5 The Company understands the nature of the Registrable Securities issuable upon the conversion of the Note and the exercise of the Warrant and the Option and recognizes that the issuance of such Registrable Securities may have a potential dilutive effect. The Company specifically acknowledges that its obligation to issue the Registrable Securities is binding upon the Company and enforceable regardless of the dilution such issuance may have on the ownership interests of other shareholders of the Company. (f)45.6 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)45.7 On and after the Trading Market Date, 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 and the Option. 7.46. Miscellaneous. (a)46.1 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)46.2 No Piggyback on Registrations. Except as and to the extent specified in Schedule 7(b) hereto or with respect to any shares issued to any underwriter, 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)46.3 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)46.4 Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of a Discontinuation Event (as defined below), such Holder will forthwith discontinue disposition of such Registrable Securities under the applicable Registration Statement until such Holder's receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph. For purposes of this Section 7(d), a "Discontinuation Event" shall mean (i) when the Commission notifies the Company whether there will be a "review" of such Registration Statement and whenever the Commission comments in writing on such Registration Statement (the Company shall provide true and complete copies thereof and all written responses thereto to each of the Holders); (ii) any request by the Commission or any other Federal or state governmental authority for amendments or supplements to such Registration Statement or Prospectus or for additional information; (iii) the issuance by the Commission of any stop order suspending the effectiveness of such Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and/or (v) the occurrence of any event or passage of time that makes the financial statements included in such Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (e)46.5 Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to each Holder written notice of such determination and, if within fifteen days after receipt of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such holder requests to be registered to the extent the Company may do so without violating registration rights of others which exist as of the date of this Agreement, subject to customary underwriter cutbacks applicable to all holders of registration rights and subject to obtaining any required the consent of any selling stockholder(s) to such inclusion under such registration statement. (f)46.6 Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of the then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of certain Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. (g)46.7 Notices. Any notice or request hereunder may be given to the Company or the Purchaser at the respective addresses set forth below or as may hereafter be specified in a notice designated as a change of address under this Section 7(g). Any notice or request hereunder shall be given by registered or certified mail, return receipt requested, hand delivery, overnight mail, Federal Express or other national overnight next day carrier (collectively, "Courier") or telecopy (confirmed by mail). Notices and requests shall be, in the case of those by hand delivery, deemed to have been given when delivered to any party to whom it is addressed, in the case of those by mail or overnight mail, deemed to have been given three (3) business days after the date when deposited in the mail or with the overnight mail carrier, in the case of a Courier, the next business day following timely delivery of the package with the Courier, and, in the case of a telecopy, when confirmed. The address for such notices and communications shall be as follows: If to the Company: Voxx Corporation 11900 Biscayne Boulevard, Suite 700 Miami, Florida 33181 Attention: Corporate Secretary Facsimile: 305-503-8610 with a copy to: Michael DiGiovanna, Esq. 212 Carnegie Center Suite 206 Princeton, New Jersey 08540 Facsimile: 609-452-9473 If to a Purchaser: To the address set forth under such Purchaser name on the signature pages hereto. If to any other Person who is then the registered Holder: To the address of such Holder as it appears in the stock transfer books of the Company. or such other address as may be designated in writing hereafter in accordance with this Section 7(g) by such Person. (h)46.8 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written consent of each Holder. Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under the Notes and the Security Agreement with the prior written consent of the Company, which consent shall not be unreasonably withheld. (i)46.9 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)46.10 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. Except as set forth below in this Section 7(j), any and all disputes, controversies and claims that the Company or any of its Subsidiaries may assert against the Purchaser arising out of or relating to this Agreement, the Securities Purchase Agreement or any other Related Agreement shall be determined exclusively by arbitration (each such arbitration, an "Arbitration") in New York City before a panel of three neutral arbitrators agreed to by the Purchaser and the Company (collectively, the "Arbitrators") in accordance with and pursuant to the then existing commercial arbitration rules of the American Arbitration Association. The Company (on its behalf and on behalf of its Subsidiaries) hereby irrevocably waives any right to assert such claims in any other forum. The Arbitrators shall have the power in their discretion to award specific performance or injunctive relief (but shall not have the power to render any incidental, special or punitive damages) and reasonable attorneys' fees and expenses to any party in any arbitration. The Arbitrators may not change, modify or alter any express condition, term or provision of this Agreement, the Securities Purchase Agreement or of any other Related Agreement nor shall they have the power to render any award against the Purchaser that would have such effect. Each Arbitration award shall be final and binding upon the parties subject thereto and judgment may be entered thereon in any court of competent jurisdiction. The service of any notice, process, motion or other document in connection with an Arbitration or for the enforcement of any Arbitration award may be made in the same manner as communications may be given under Section 7(g) hereof. Notwithstanding the foregoing, the provisions of this Section 7(j) nor any other provision contained in this Agreement, the Securities Purchase Agreement or in any Related Agreement shall limit in any manner whatsoever the Purchaser's right to commence an action against or in connection with the Company, any of its Subsidiaries or their respective properties in any court of competent jurisdiction or otherwise utilize judicial process in connection with or arising out of the Purchaser's rights and remedies under this Agreement, the Securities Purchase Agreement and/or any Related Agreement or otherwise (any such action, a "Court Action"). Court Actions may be brought by the Purchaser in any state or federal court of competent jurisdiction and the Company (on its behalf and on behalf of its Subsidiaries) irrevocably submits to the jurisdiction of such state and federal courts and irrevocably waives any claim or defense of inconvenient forum or lack of personal jurisdiction in such forum or right of removal or right to jury trial under any applicable law or decision or otherwise. Service of any notice, process, motion or other document in connection with a Court Action may be made in the same manner as communications may be given under Section 7(g). In addition, the Purchaser may serve process in any other manner permitted under applicable law. If either party shall commence a Proceeding to enforce any provisions of this Agreement, the Securities Purchase Agreement or any other Related Agreement, then the prevailing party in such Proceeding shall be reimbursed by the other party for its reasonable attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding. (k)46.11 Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. (l)46.12 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)46.13 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above. VOXX CORPORATION LAURUS MASTER FUND, LTD. By: /s/ Ilene Kaminsky By: /s/ Authorized Officer ------------------------- -------------------------- Name: Ilene Kaminsky Name: ------------------------- -------------------------- Title: CEO Title: ------------------------- -------------------------- Address for Notices: 825 Third Avenue 14th Floor New York, NY 10022 Attention: Eugene Grin Facsimile: 212-541-4434 EXHIBIT A [Month __, 2005] [Continental Stock Transfer & Trust Company Two Broadway New York, NY 10004 Attn: William Seegraber] Re: Voxx Corporation Registration Statement on Form [S-1][SB-2] Ladies and Gentlemen: As counsel to Voxx Corporation, 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] SCHEDULE A Shares Selling Stockholder Being Offered - ------------------- ------------- EX-4.13.7 8 b406530ex4_13-7.txt EXHIBIT 4.13.7 EXHIBIT 4.13.7 STOCK PLEDGE AGREEMENT This Stock Pledge Agreement (this "Agreement"), dated as of April 29, 2005, among Laurus Master Fund, Ltd., (the "Pledgee"), Epixtar Corp., a Florida corporation (the "Company"), and each of the other undersigned pledgors (the Company and each such other undersigned pledgor, a "Pledgor" and collectively, the "Pledgors"). BACKGROUND Each of the Company, Voxx Corporation, a Florida corporation, and the Pledgee has entered into a Securities Purchase Agreement, dated as of the date hereof (as amended, modified, restated or supplemented from time to time, the "Securities Purchase Agreement"), pursuant to which the Pledgee provides or will provide certain financial accommodations to the Company. In order to induce the Pledgee to provide or continue to provide the financial accommodations described in the Securities Purchase Agreement, each Pledgor has agreed to pledge and grant a security interest in the collateral described herein to the Pledgee on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt of which is hereby acknowledged, the parties hereto agree as follows: 1. Defined Terms. All capitalized terms used herein which are not defined shall have the meanings given to them in the Securities Purchase Agreement. 2. Pledge and Grant of Security Interest. To secure the full and punctual payment and performance of (the following clauses (a) and (b), collectively, the "Indebtedness") (a) the obligations under the Securities Purchase Agreement and the Related Agreements referred to in the Securities Purchase Agreement (the Securities Purchase Agreement and the Related Agreements, as each may be amended, restated, modified and/or supplemented from time to time, collectively, the "Documents") and (b) all other indebtedness, obligations and liabilities of each Pledgor and/or any other subsidiary of the Company to the Pledgee whether now existing or hereafter arising, direct or indirect, liquidated or unliquidated, absolute or contingent, due or not due and whether under, pursuant to or evidenced by a note, agreement, guaranty, instrument or otherwise (in each case, irrespective of the genuineness, validity, regularity or enforceability of such Indebtedness, or of any instrument evidencing any of the Indebtedness or of any collateral therefor or of the existence or extent of such collateral, and irrespective of the allowability, allowance or disallowance of any or all of such in any case commenced by or against any Pledgor under Title 11, United States Code, including, without limitation, obligations or indebtedness of each Pledgor and/or any other subsidiary of the Company for post-petition interest, fees, costs and charges that would have accrued or been added to the Indebtedness but for the commencement of such case, and irrespective of the allowability, allowance or disallowance of such post-petition interest, fees, costs and charges), each Pledgor hereby pledges, assigns, hypothecates, transfers and grants a security interest to Pledgee in all of the following (the "Collateral"): (a) the shares of stock set forth on Schedule A annexed hereto (which shall explicitely exclude the shares of Epixtar Marketing Corp., a Florida corporation, until such time as such shares are released from the escrow arrangement by and between the Company and the previous owners thereof) and expressly made a part hereof (together with any additional shares of stock or other equity interests acquired by any Pledgor after the date hereof, the "Pledged Stock"), the certificates representing the Pledged Stock and all dividends, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Stock; (b) all additional shares of stock of any issuer (each, an "Issuer") of the Pledged Stock from time to time acquired by any Pledgor in any manner, including, without limitation, stock dividends or a distribution in connection with any increase or reduction of capital, reclassification, merger, consolidation, sale of assets, combination of shares, stock split, spin-off or split-off (which shares shall be deemed to be part of the Collateral), and the certificates representing such additional shares, and all dividends, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares; and (c) all options and rights, whether as an addition to, in substitution of or in exchange for any shares of any Pledged Stock and all dividends, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all such options and rights. 3. Delivery of Collateral. All certificates representing or evidencing the Pledged Stock shall be delivered to and held by or on behalf of Pledgee pursuant hereto and shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to Pledgee. Each Pledgor hereby authorizes the Issuer upon demand by the Pledgee to deliver any certificates, instruments or other distributions issued in connection with the Collateral directly to the Pledgee, in each case to be held by the Pledgee, subject to the terms hereof. Upon an Event of Default (as defined below) under the Note that has occurred and is continuing beyond any applicable grace period, the Pledgee shall have the right, during such time in its discretion and without notice to the Pledgor, to transfer to or to register in the name of the Pledgee or any of its nominees any or all of the Pledged Stock. In addition, the Pledgee shall have the right at such time to exchange certificates or instruments representing or evidencing Pledged Stock for certificates or instruments of smaller or larger denominations. 4. Representations and Warranties of each Pledgor. Each Pledgor jointly and severally represents and warrants to the Pledgee (which representations and warranties shall be deemed to continue to be made until all of the Indebtedness has been paid in full and each Document and each agreement and instrument entered into in connection therewith has been irrevocably terminated) that: (a) the execution, delivery and performance by each Pledgor of this Agreement and the pledge of the Collateral hereunder do not and will not result in any violation of any agreement, indenture, instrument, license, judgment, decree, order, law, statute, ordinance or other governmental rule or regulation applicable to any Pledgor; (b) this Agreement constitutes the legal, valid, and binding obligation of each Pledgor enforceable against each Pledgor in accordance with its terms; (c) (i) all Pledged Stock owned by each Pledgor is set forth on Schedule A hereto and (ii) each Pledgor is the direct and beneficial owner of each share of the Pledged Stock; (d) all of the shares of the Pledged Stock have been duly authorized, validly issued and are fully paid and nonassessable; (e) no consent or approval of any person, corporation, governmental body, regulatory authority or other entity, is or will be necessary for (i) the execution, delivery and performance of this Agreement, (ii) the exercise by the Pledgee of any rights with respect to the Collateral or (iii) the pledge and assignment of, and the grant of a security interest in, the Collateral hereunder; (f) there are no pending or, to the best of Pledgor's knowledge, threatened actions or proceedings before any court, judicial body, administrative agency or arbitrator which may materially adversely affect the Collateral; (g) each Pledgor has the requisite power and authority to enter into this Agreement and to pledge and assign the Collateral to the Pledgee in accordance with the terms of this Agreement. (h) each Pledgor owns each item of the Collateral and, except for encumbrances securing (x) the Indebtedness and (ii) the Laurus Obligations (as defined in the Intercreditor Agreement), the Collateral shall be, immediately following the closing of the transactions contemplated by the Documents, free and clear of any other security interest, pledge, claim, lien, charge, hypothecation, assignment, offset or encumbrance whatsoever (collectively, "Liens"). (i) there are no restrictions on transfer of the Pledged Stock contained in the certificate of incorporation or by-laws (or equivalent organizational documents) of the Issuer or otherwise which have not otherwise been enforceably and legally waived by the necessary parties. (j) none of the Pledged Stock has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject. (k) the pledge and assignment of the Collateral and the grant of a security interest under this Agreement vest in the Pledgee all rights of each Pledgor in the Collateral as contemplated by this Agreement. (l) the Pledged Stock constitutes one hundred percent (100%) of the issued and outstanding shares of capital stock of each Issuer, other than Voxx Corporation, of which Epixtar Corp. owns the outstanding shares set forth on Schedule A hereto. 5. Covenants. Each Pledgor jointly and severally covenants that, until the Indebtedness shall be satisfied in full and each Document and each agreement and instrument entered into in connection therewith is irrevocably terminated: (a) Other than the issuances to the Laurus Creditors (as defined in the Intercreditor Agreement) that are contemplated by the Laurus Documents (as defined in the Intercreditor Agreement) and/or issuances to the Sands Creditors (as defined in the Intercreditor Agreement) that are contemplated by the Sands Documents (as defined in the Intercreditor Agreement), no Pledgor will sell, assign, transfer, convey, or otherwise dispose of its rights in or to the Collateral or any interest therein; nor will any Pledgor create, incur or permit to exist any Lien whatsoever with respect to any of the Collateral or the proceeds thereof other than that created hereby. (b) Each Pledgor will, at its expense, defend Pledgee's right, title and security interest in and to the Collateral against the claims of any other party. (c) Each Pledgor shall at any time, and from time to time, upon the written request of Pledgee, execute and deliver such further documents and do such further acts and things as Pledgee may reasonably request in order to effect the purposes of this Agreement including, but without limitation, delivering to Pledgee upon the occurrence of an Event of Default irrevocable proxies in respect of the Collateral in form satisfactory to Pledgee. Until receipt thereof, upon an Event of Default that has occurred and is continuing beyond any applicable grace period, this Agreement shall constitute Pledgor's proxy to Pledgee or its nominee to vote all shares of Collateral then registered in each Pledgor's name. (d) Other than (i) issuances to the Laurus Creditors (as defined in the Intercreditor Agreement) that are contemplated by the Laurus Documents (as defined in the Intercreditor Agreement) , (ii) issuances to the Sands Creditors (as defined in the Intercreditor Agreement) that are contemplated by the Sands Documents (as defined in the Intercreditor Agreement) or (iii) issuances to the creditors in respect of the Bridge Loan Indebtedness in accordance with the terms set forth in Section 6.12(e)(i)(v) of the Securities Purchase Agreement, no Pledgor will consent to or approve the issuance of (i) any additional shares of any class of capital stock or other equity interests of the Issuer; or (ii) any securities convertible either voluntarily by the holder thereof or automatically upon the occurrence or nonoccurrence of any event or condition into, or any securities exchangeable for, any such shares, unless, in either case, such shares are pledged as Collateral pursuant to this Agreement. 6. Voting Rights and Dividends. In addition to the Pledgee's rights and remedies set forth in Section 8 hereof, in case an Event of Default shall have occurred and be continuing, beyond any applicable cure period, the Pledgee shall (i) be entitled to vote the Collateral, (ii) be entitled to give consents, waivers and ratifications in respect of the Collateral (each Pledgor hereby irrevocably constituting and appointing the Pledgee, with full power of substitution, the proxy and attorney-in-fact of each Pledgor for such purposes) and (iii) be entitled to collect and receive for its own use cash dividends paid on the Collateral. No Pledgor shall be permitted to exercise or refrain from exercising any voting rights or other powers if, in the reasonable judgment of the Pledgee, such action would have a material adverse effect on the value of the Collateral or any part thereof; and, provided, further, that following the occurrence and during the continuance of any Event of Default beyond any applicable grace period, each Pledgor shall give at least five (5) days' written notice of the manner in which such Pledgor intends to exercise, or the reasons for refraining from exercising, any voting rights or other powers other than with respect to any election of directors and voting with respect to any incidental matters. Following the occurrence and during the continuance of an Event of Default beyond any applicable grace period, all dividends and all other distributions in respect of any of the Collateral, shall be delivered to the Pledgee to hold as Collateral and shall, if received by any Pledgor, be received in trust for the benefit of the Pledgee, be segregated from the other property or funds of any other Pledgor, and be forthwith delivered to the Pledgee as Collateral in the same form as so received (with any necessary endorsement). 7. Event of Default. An Event of Default shall be deemed to have occurred and may be declared by the Pledgee upon the happening of any of the following events: (a) An "Event of Default" under any Document or any agreement or note related to any Document shall have occurred and be continuing beyond any applicable cure period; (b) Any Pledgor shall default in the performance of any of its obligations under any agreement between any Pledgor and Pledgee, including, without limitation, this Agreement, and such default shall not be cured for a period of thirty (30) days after the occurrence thereof; (c) Any representation or warranty of any Pledgor made herein, in any Document or in any agreement, statement or certificate given in writing pursuant hereto or thereto or in connection herewith or therewith shall be false or misleading in any material respect and shall not be cured for a period of thirty (30) days after the occurrence thereof; (d) Any portion of the Collateral is subjected to levy of execution, attachment, distraint or other judicial process; or any portion of the Collateral is the subject of a claim (other than by the Pledgee) of a Lien or other right or interest in or to the Collateral and such levy or claim shall not be cured, disputed or stayed within a period of thirty (30) business days after the occurrence thereof; or (e) Any Pledgor shall (i) apply for, consent to, or suffer to exist the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or other fiduciary of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of creditors, (iii) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vi) acquiesce to, or fail to have dismissed, within forty-five (45) days, any petition filed against it in any involuntary case under such bankruptcy laws, or (vii) take any action for the purpose of effecting any of the foregoing. 8. Remedies. In case an Event of Default shall have occurred and be declared by the Pledgee, the Pledgee may: (a) Transfer any or all of the Collateral into its name, or into the name of its nominee or nominees; (b) Exercise all corporate rights with respect to the Collateral including, without limitation, all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to any shares of the Collateral as if it were the absolute owner thereof, including, but without limitation, the right to exchange, at its discretion, any or all of the Collateral upon the merger, consolidation, reorganization, recapitalization or other readjustment of the Issuer thereof, or upon the exercise by the Issuer of any right, privilege or option pertaining to any of the Collateral, and, in connection therewith, to deposit and deliver any and all of the Collateral with any committee, depository, transfer agent, registrar or other designated agent upon such terms and conditions as it may determine, all without liability except to account for property actually received by it; and (c) Subject to any requirement of applicable law, sell, assign and deliver the whole or, from time to time, any part of the Collateral at the time held by the Pledgee, at any private sale or at public auction, with or without demand, advertisement or notice of the time or place of sale or adjournment thereof or otherwise (all of which are hereby waived, except such notice as is required by applicable law and cannot be waived), for cash or credit or for other property for immediate or future delivery, and for such price or prices and on such terms as the Pledgee in its sole discretion may determine, or as may be required by applicable law. Each Pledgor hereby waives and releases any and all right or equity of redemption, whether before or after sale hereunder. At any such sale, unless prohibited by applicable law, the Pledgee may bid for and purchase the whole or any part of the Collateral so sold free from any such right or equity of redemption. All moneys received by the Pledgee hereunder whether upon sale of the Collateral or any part thereof or otherwise shall be held by the Pledgee and applied by it as provided in Section 10 hereof. No failure or delay on the part of the Pledgee in exercising any rights hereunder shall operate as a waiver of any such rights nor shall any single or partial exercise of any such rights preclude any other or future exercise thereof or the exercise of any other rights hereunder. The Pledgee shall have no duty as to the collection or protection of the Collateral or any income thereon nor any duty as to preservation of any rights pertaining thereto, except to apply the funds in accordance with the requirements of Section 10 hereof. The Pledgee may exercise its rights with respect to property held hereunder without resort to other security for or sources of reimbursement for the Indebtedness. In addition to the foregoing, Pledgee shall have all of the rights, remedies and privileges of a secured party under the Uniform Commercial Code of New York regardless of the jurisdiction in which enforcement hereof is sought. 9. Private Sale. Each Pledgor recognizes that the Pledgee may be unable to effect (or to do so only after delay which would adversely affect the value that might be realized from the Collateral) a public sale of all or part of the Collateral by reason of certain prohibitions contained in the Securities Act, and may be compelled to resort to one or more private sales to a restricted group of purchasers who will be obliged to agree, among other things, to acquire such Collateral for their own account, for investment and not with a view to the distribution or resale thereof. Each Pledgor agrees that any such private sale may be at prices and on terms less favorable to the seller than if sold at public sales and that such private sales shall be deemed to have been made in a commercially reasonable manner. Each Pledgor agrees that the Pledgee has no obligation to delay sale of any Collateral for the period of time necessary to permit the Issuer to register the Collateral for public sale under the Securities Act. Any sale made pursuant to this Section 9 shall be in accordance with federal and state securities laws. 10. Proceeds of Sale. The proceeds of any collection, recovery, receipt, appropriation, realization or sale of the Collateral shall be applied by the Pledgee as follows: (a) First, to the payment of all costs, reasonable expenses and charges of the Pledgee and to the reimbursement of the Pledgee for the prior payment of such costs, reasonable expenses and charges incurred in connection with the care and safekeeping of the Collateral (including, without limitation, the reasonable expenses of any sale or any other disposition of any of the Collateral), the expenses of any taking, attorneys' fees and reasonable expenses, court costs, any other fees or expenses incurred or expenditures or advances made by Pledgee in the protection, enforcement or exercise of its rights, powers or remedies hereunder; (b) Second, to the payment of the Indebtedness, in whole or in part, in such order as the Pledgee may elect, whether or not such Indebtedness is then due; (c) Third, to such persons, firms, corporations or other entities as required by applicable law including, without limitation, Section 9-504(1)(c) of the UCC; and (d) Fourth, to the extent of any surplus to the Pledgors or as a court of competent jurisdiction may direct. In the event that the proceeds of any collection, recovery, receipt, appropriation, realization or sale are insufficient to satisfy the Indebtedness, each Pledgor shall be jointly and severally liable for the deficiency plus the costs and fees of any attorneys employed by Pledgee to collect such deficiency. 11. Waiver of Marshaling. Each Pledgor hereby waives any right to compel any marshaling of any of the Collateral. 12. No Waiver. Any and all of the Pledgee's rights with respect to the Liens granted under this Agreement shall continue unimpaired, and Pledgor shall be and remain obligated in accordance with the terms hereof, notwithstanding (a) the bankruptcy, insolvency or reorganization of any Pledgor, (b) the release or substitution of any item of the Collateral at any time, or of any rights or interests therein, or (c) any delay, extension of time, renewal, compromise or other indulgence granted by the Pledgee in reference to any of the Indebtedness. Each Pledgor hereby waives all notice of any such delay, extension, release, substitution, renewal, compromise or other indulgence, and hereby consents to be bound hereby as fully and effectively as if such Pledgor had expressly agreed thereto in advance. No delay or extension of time by the Pledgee in exercising any power of sale, option or other right or remedy hereunder, and no failure by the Pledgee to give notice or make demand, shall constitute a waiver thereof, or limit, impair or prejudice the Pledgee's right to take any action against any Pledgor or to exercise any other power of sale, option or any other right or remedy. 13. Expenses. The Collateral shall secure, and each Pledgor shall pay to Pledgee on demand, from time to time, all reasonable costs and expenses, (including but not limited to, reasonable attorneys' fees and costs, taxes, and all transfer, recording, filing and other charges) of, or incidental to, the custody, care, transfer, administration of the Collateral or any other collateral, or in any way relating to the enforcement, protection or preservation of the rights or remedies of the Pledgee under this Agreement or with respect to any of the Indebtedness. 14. The Pledgee Appointed Attorney-In-Fact and Performance by the Pledgee. Upon the occurrence of an Event of Default, each Pledgor hereby irrevocably constitutes and appoints the Pledgee as such Pledgor's true and lawful attorney-in-fact, with full power of substitution, to execute, acknowledge and deliver any instruments and to do in such Pledgor's name, place and stead, all such acts, things and deeds for and on behalf of and in the name of such Pledgor, which such Pledgor could or might do or which the Pledgee may deem necessary, desirable or convenient to accomplish the purposes of this Agreement, including, without limitation, to execute such instruments of assignment or transfer or orders and to register, convey or otherwise transfer title to the Collateral into the Pledgee's name. Each Pledgor hereby ratifies and confirms all that said attorney-in-fact may so do and hereby declares this power of attorney to be coupled with an interest and irrevocable. If any Pledgor fails to perform any agreement herein contained, the Pledgee may itself perform or cause performance thereof, and any costs and expenses of the Pledgee incurred in connection therewith shall be paid by the Pledgors as provided in Section 10 hereof. 15. Waivers. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OTHER AGREEMENT EXECUTED OR DELIVERED BY THEM IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. 16. Recapture. Notwithstanding anything to the contrary in this Agreement, if the Pledgee receives any payment or payments on account of the Indebtedness, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver, or any other party under the United States Bankruptcy Code, as amended, or any other federal or state bankruptcy, reorganization, moratorium or insolvency law relating to or affecting the enforcement of creditors' rights generally, common law or equitable doctrine, then to the extent of any sum not finally retained by the Pledgee, each Pledgor's obligations to the Pledgee shall be reinstated and this Agreement shall remain in full force and effect (or be reinstated) until payment shall have been made to Pledgee, which payment shall be due on demand. 17. Captions. All captions in this Agreement are included herein for convenience of reference only and shall not constitute part of this Agreement for any other purpose. 18. Miscellaneous. (a) Notwithstanding anything to the contrary contained in this Agreement, the terms and conditions of this Agreement shall be subject in all respects to the terms and conditions of the Intercreditor Agreement. In the event that the terms and conditions of this Agreement are in contravention of the terms and conditions of the Intercreditor Agreement, the terms and conditions of the Intercreditor Agreement shall prevail. This Agreement constitutes the entire and final agreement among the parties with respect to the subject matter hereof and may not be amended, modified, supplemented, restated, terminated or waived except by a writing duly executed by the Pledgee and each Pledgor. (b) No waiver of any term or condition of this Agreement, whether by delay, omission or otherwise, shall be effective unless in writing and signed by the party sought to be charged, and then such waiver shall be effective only in the specific instance and for the purpose for which given. (c) In the event that any provision of this Agreement or the application thereof to any Pledgor or any circumstance in any jurisdiction governing this Agreement shall, to any extent, be invalid or unenforceable under any applicable statute, regulation, or rule of law, such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute, regulation or rule of law, and the remainder of this Agreement and the application of any such invalid or unenforceable provision to parties, jurisdictions, or circumstances other than to whom or to which it is held invalid or unenforceable shall not be affected thereby, nor shall same affect the validity or enforceability of any other provision of this Agreement. (d) This Agreement shall be binding upon each Pledgor, and each Pledgor's successors and assigns, and shall inure to the benefit of the Pledgee and its successors and assigns. (e) Any notice or other communication required or permitted pursuant to this Agreement shall be given in accordance with the Securities Purchase Agreement. (f) This Agreement shall be governed by and construed and enforced in all respects in accordance with the laws of the State of New York applied to contracts to be performed wholly within the State of New York. (g) EXCEPT AS SET FORTH BELOW IN THIS SECTION 18(g), ANY AND ALL DISPUTES, CONTROVERSIES AND CLAIMS THAT ANY PLEDGOR MAY ASSERT AGAINST THE PLEDGEE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER DOCUMENT SHALL BE DETERMINED EXCLUSIVELY BY ARBITRATION (EACH SUCH ARBITRATION, AN "ARBITRATION") IN NEW YORK CITY BEFORE A PANEL OF THREE NEUTRAL ARBITRATORS AGREED TO BY THE PELDGEE AND THE COMPANY (COLLECTIVELY, THE "ARBITRATORS") IN ACCORDANCE WITH AND PURSUANT TO THE THEN EXISTING COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. EACH PLEDGEE HEREBY IRREVOCABLY WAIVES ANY RIGHT TO ASSERT SUCH CLAIMS IN ANY OTHER FORUM. THE ARBITRATORS SHALL HAVE THE POWER IN THEIR DISCRETION TO AWARD SPECIFIC PERFORMANCE OR INJUNCTIVE RELIEF (BUT SHALL NOT HAVE THE POWER TO RENDER ANY INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES) AND REASONABLE ATTORNEYS' FEES AND EXPENSES TO ANY PARTY IN ANY ARBITRATION. THE ARBITRATORS MAY NOT CHANGE, MODIFY OR ALTER ANY EXPRESS CONDITION, TERM OR PROVISION OF THIS AGREEMENT OR OF ANY RELATED AGREEMENT NOR SHALL THEY HAVE THE POWER TO RENDER ANY AWARD AGAINST THE PLEDGEE THAT WOULD HAVE SUCH EFFECT. EACH ARBITRATION AWARD SHALL BE FINAL AND BINDING UPON THE PARTIES SUBJECT THERETO AND JUDGMENT MAY BE ENTERED THEREON IN ANY COURT OF COMPETENT JURISDICTION. THE SERVICE OF ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN CONNECTION WITH AN ARBITRATION OR FOR THE ENFORCEMENT OF ANY ARBITRATION AWARD MAY BE MADE IN THE SAME MANNER AS COMMUNICATIONS MAY BE GIVEN UNDER SECTION 18(e) HEREOF. NOTWITHSTANDING THE FOREGOING, THE PROVISIONS OF THIS SECTION 18(g) NOR ANY OTHER PROVISION CONTAINED IN THIS AGREEMENT OR IN ANY OTHER DOCUMENT SHALL LIMIT IN ANY MANNER WHATSOEVER THE PLEDGEE'S RIGHT TO COMMENCE AN ACTION AGAINST OR IN CONNECTION WITH ANY PLEDGOR OR ANY OF THEIR RESPECTIVE PROPERTIES IN ANY COURT OF COMPETENT JURISDICTION OR OTHERWISE UTILIZE JUDICIAL PROCESS IN CONNECTION WITH OR ARISING OUT OF THE PLEDGEE'S RIGHTS AND REMEDIES UNDER THIS AGREEMENT AND/OR ANY OTHER DOCUMENT OR OTHERWISE (ANY SUCH ACTION, A "COURT ACTION"). COURT ACTIONS MAY BE BROUGHT BY THE PLEDGEE IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION AND EACH PLEDGOR IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH STATE AND FEDERAL COURTS AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE OF INCONVENIENT FORUM OR LACK OF PERSONAL JURISDICTION IN SUCH FORUM OR RIGHT OF REMOVAL OR RIGHT TO JURY TRIAL UNDER ANY APPLICABLE LAW OR DECISION OR OTHERWISE. SERVICE OF ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN CONNECTION WITH A COURT ACTION MAY BE MADE IN THE SAME MANNER AS COMMUNICATIONS MAY BE GIVEN UNDER SECTION 18(e). IN ADDITION, THE PLEDGEE MAY SERVE PROCESS IN ANY OTHER MANNER PERMITTED UNDER APPLICABLE LAW. (h) It is understood and agreed that any person or entity that desires to become a Pledgor hereunder, or is required to execute a counterpart of this Agreement after the date hereof pursuant to the requirements of any Document, shall become a Pledgor hereunder by (x) executing a Joinder Agreement in form and substance satisfactory to the Pledgee, (y) delivering supplements to such exhibits and annexes to such Documents as the Pledgee shall reasonably request and/or set forth in such joinder agreement and (z) taking all actions as specified in this Agreement as would have been taken by such Pledgor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Pledgee and with all documents and actions required above to be taken to the reasonable satisfaction of the Pledgee. (i) This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same agreement. Any signature delivered by a party by facsimile transmission shall be deemed an original signature hereto. [Remainder of Page Intentionally Left Blank] IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first written above. EPIXTAR CORP. By: /s/ Ilene Kaminsky ------------------------------- Name: Ilene Kaminsky Title: CEO NOL GROUP, INC. By: /s/ Deborah Gambone ------------------------------- Name: Deborah Gambone Title: Vice President NATIONAL ONLINE SERVICES, INC. By: /s/ Deborah Gambone ------------------------------- Name: Deborah Gambone Title: Vice President LIBERTY ONLINE SERVICES, INC. By: /s/ Deborah Gambone ------------------------------- Name: Deborah Gambone Title: Vice President AMERIPAGES, INC. By: /s/ Deborah Gambone ------------------------------- Name: Deborah Gambone Title: Vice President B2B ADVANTAGE, INC. By: /s/ Deborah Gambone ------------------------------- Name: Deborah Gambone Title: Vice President EPIXTAR INTERNATIONAL CONTACT CENTER GROUP, INC. By: /s/ Deborah Gambone ------------------------------- Name: Deborah Gambone Title: Vice President VOXX CORPORATION By: /s/ Ilene Kaminsky ------------------------------- Name: Ilene Kaminsky Title: CEO EPIXTAR MARKETING CORP. By: /s/ Ilene Kaminsky ------------------------------- Name: Ilene Kaminsky Title: CEO LAURUS MASTER FUND, LTD. By: /s/ Authorized Officer ------------------------------- Name: Title: SCHEDULE A to the Stock Pledge Agreement Pledged Stock
- -------------------------- ----------------------- -------------------- --------------------- --------------- ------------------ Pledgor Issuer Class of Stock Stock Certificate Par Value Number of Shares Number - -------------------------- ----------------------- -------------------- --------------------- --------------- ------------------ [Insert Pledgors and Pledged Stock] - -------------------------- ----------------------- -------------------- --------------------- --------------- ------------------ - -------------------------- ----------------------- -------------------- --------------------- --------------- ------------------ - -------------------------- ----------------------- -------------------- --------------------- --------------- ------------------
EX-4.13.8 9 b406530ex4_13-8.txt EXHIBIT 4.13.8 EXHIBIT 4.13.8 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 VOXX CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. Right to Purchase up to 229,187 Shares of Common Stock of Voxx Corporation (subject to adjustment as provided herein) COMMON STOCK PURCHASE WARRANT No. _________________ Issue Date: April 29, 2005 VOXX CORPORATION, a corporation organized under the laws of the State of Florida ("VOXX"), 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 close of business April 29, 2010 (the "Expiration Date"), up to 229,187 fully paid and nonassessable shares of Common Stock (as hereinafter defined), $0.001 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 VOXX and any corporation which shall succeed, or assume the obligations of, VOXX hereunder. (b) The term "Common Stock" includes (i) the Company's Common Stock, par value $0.001 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 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: (i) on and after the date of the consummation of an initial public offering of the Common Stock (the "VOXX IPO Date"), a price per share equal to the initial public offering price of the Common Stock and (ii) prior to the VOXX IPO Date, a price per share equal to the remainder of (x) $50,000,000 divided by (y) the aggregate number of shares of Common Stock issued and outstanding on the date of such exercise (calculated on a fully diluted basis and, in any event, assuming the full conversion or exercise, as the case may be, of all securities issued by the Company which are convertible or exercisable into Common Stock). . 1.47. Exercise of Warrant. 1.47.1 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"), shares of Common Stock of the Company, subject to adjustment pursuant to Section 4. 1.47.2 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 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. 1.347.3 Company Acknowledgment. The Company will, at the time of the exercise of the Warrant, upon the request of the holder hereof acknowledge in writing its continuing obligation to afford to such holder any rights to which such holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant. If the holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such holder any such rights. 1.447.4 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. 2.48. Procedure for Exercise. 2.148.1 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. 2.148.2 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) by delivery of the Warrant, or shares of Common Stock and/or Common Stock receivable upon exercise of the Warrant in accordance with Section (b) 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 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) 3.49. Effect of Reorganization, Etc.; Adjustment of Exercise Price. 3.149.1 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. 3.249.2 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"). 3.349.3 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 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. 4.50. 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. 5.51. 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, 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). 6.52. 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. 7.53. 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. 8.54. 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. 9.55. 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 Purchaser dated as of even date of this Warrant. 10.56. 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. 11.57. 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 issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 12.58. 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. 13.59. 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. 14.60. 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. Except as set forth below in this Section 15, any and all disputes, controversies and claims that the Company may assert against the any Holder arising out of or relating to this Warrant shall be determined exclusively by arbitration (each such arbitration, an "Arbitration") in New York City before a panel of three neutral arbitrators agreed to by the Purchaser and the Company (collectively, the "Arbitrators") in accordance with and pursuant to the then existing commercial arbitration rules of the American Arbitration Association. The Company hereby irrevocably waives any right to assert such claims in any other forum. The Arbitrators shall have the power in their discretion to award specific performance or injunctive relief (but shall not have the power to render any incidental, special or punitive damages) and reasonable attorneys' fees and expenses to any party in any arbitration. The Arbitrators may not change, modify or alter any express condition, term or provision of this Warrant nor shall they have the power to render any award against any Holder that would have such effect. Each Arbitration award shall be final and binding upon the parties subject thereto and judgment may be entered thereon in any court of competent jurisdiction. The service of any notice, process, motion or other document in connection with an Arbitration or for the enforcement of any Arbitration award may be made in the same manner as communications may be given under Section 13 hereof. Notwithstanding the foregoing, the provisions of this Section 15 nor any other provision contained in this Warrant shall limit in any manner whatsoever any Holder's right to commence an action against or in connection with the Company or its properties in any court of competent jurisdiction or otherwise utilize judicial process in connection with or arising out of any Holder's rights and remedies under this Warrant or otherwise (any such action, a "Court Action"). Court Actions may be brought by any Holder in any state or federal court of competent jurisdiction and the Company irrevocably submits to the jurisdiction of such state and federal courts and irrevocably waives any claim or defense of inconvenient forum or lack of personal jurisdiction in such forum or right of removal or right to jury trial under any applicable law or decision or otherwise. Service of any notice, process, motion or other document in connection with a Court Action may be made in the same manner as communications may be given under Section 13. In addition, any Holder may serve process in any other manner permitted under applicable law. The individuals executing this Warrant on behalf of the Company agree to 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 acknowledges that 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.] IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above. VOXX CORPORATION By: /s/ Ilene Kaminsky ---------------------------- Name: Ilene Kaminsky ---------------------------- Title: CEO - --------------------------------- ---------------------------- EXHIBIT A FORM OF SUBSCRIPTION (To Be Signed Only On Exercise Of Warrant) TO: VOXX CORPORATION 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: --------------------------- --------------------------- 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 Voxx Corporation 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 Voxx Corporation with full power of substitution in the premises.
Percentage Number Transferees Address Transferred 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)
EX-4.13.9 10 b406530ex4_13-9.txt EXHIBIT 4.13.9 EXHIBIT 4.13.9 INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT (this "Agreement"), dated as of April 29, 2005, among the investors listed on Schedule A hereto, and acknowledged and agreed to by Epixtar Corp., a Florida corporation ("EPXR") and Voxx Corporation, a Florida corporation ("Voxx"). PRELIMINARY STATEMENTS WHEREAS, Laurus Master Fund, Ltd. ("Laurus") has invested amounts in EPXR and Voxx (EPXR and Voxx, collectively, the "Issuer"), pursuant to the terms of (x) the documents, instruments and agreements set forth on Schedule B-1 hereto (as amended, restated, modified and/or supplemented from time to time, the "2004 Laurus Documents") and (y) the documents, instruments and agreements set forth on Schedule B-2 hereto (as amended, restated, modified and/or supplemented from time to time, the "2005 Laurus Documents" and, together with the 2004 Laurus Documents, the "Laurus Documents" and each, a "Laurus Document") ; WHEREAS, Sands Brothers Venture Capital LLC, Sands Brothers Venture Capital II LLC, Sands Brothers Venture Capital III LLC and Sands Brothers Venture Capital IV LLC (collectively, the "Sands Creditors") have invested amounts in EPXR and Voxx pursuant to the terms of the documents, instruments and agreements set forth on Schedule C hereto (as amended, restated, modified and/or supplemented from time to time, the "Sands Documents"); WHEREAS, to secure the complete and prompt payment of all Obligations to the Laurus Creditors and the Sands Creditors (each Laurus Creditor and each Sands Creditor, collectively, the "Secured Parties"), Issuer has executed the agreements set forth on Schedule D hereto (as amended, restated, modified and/or supplemented from time to time, the "2005 Security Documents") in favor of Laurus, individually and/or as Collateral Agent (as defined below) for the benefit of the Secured Parties granting to each Secured Party, a security interest in the Shared Collateral (as defined below); and WHEREAS, the Secured Parties desire to appoint Laurus to act as agent for the Secured Parties with respect to the control, maintenance, preservation and enforcement of the Shared Collateral (Laurus in such capacity, the "Collateral Agent") and Laurus desires to accept such appointment, subject to the terms and conditions set forth herein; NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Collateral Agent and the Secured Parties agree as follows: SECTION 1.61. Definitions. Unless otherwise defined in this Section 1 or elsewhere in this Agreement, capitalized terms used herein shall have the meaning assigned such terms as set forth in the 2005 Laurus Securities Purchase Agreement. "Collateral" shall mean, collectively, the Shared Collateral and the Laurus Collateral. "Defined Obligations" means, collectively, the Sands Obligations and the Laurus Defined Obligations. "Investor Documents" means, collectively, this Agreement, the Laurus Documents, the Sands Documents and all other documents, agreements and instruments from time to time executed by Issuer, any Subsidiary of the respective Issuer or any other Person, and delivered to the Collateral Agent or the Secured Parties in connection with the transactions contemplated by this Agreement, the Laurus Documents and the and the Sands Documents. "Laurus Collateral" shall mean, collectively, all collateral granted to any Laurus Creditor as security for the Laurus Obligations (including, without limitation, pursuant to any Laurus Document). "Laurus Collateral Preference Amount" means that amount, if any, which is equal at the time of any distribution or amount resulting from proceeds derived from the Shared Collateral which shall be equal to the lesser of (i) the then outstanding amount of the Laurus Preference Obligations and (ii) $5,000,000. "Laurus Creditor" shall mean Laurus and any and all Persons which hold any indebtedness, liability or obligation under the Laurus Documents or any other document, agreement or instrument related thereto, including, without limitation, any successors and/or assigns of Laurus. "Laurus Defined Obligations" means all indebtedness and other obligations incurred by the Issuer or any Subsidiary of the Issuer and owed to Laurus in connection with the issuance of the 2005 Laurus Note and the execution of the other 2005 Laurus Documents. "Laurus Documents" shall have the meaning set forth in the recitals hereto. "Laurus Obligations" include all debts, liabilities and obligations owing by any Loan Party to any Laurus Creditor arising under, out of, or in connection with any Laurus Document, and in connection with any documents, instruments or agreements relating to or executed in connection with the Laurus Documents or any documents, instruments or agreements referred to therein or otherwise, and in connection with any other indebtedness, obligations or liabilities of any Loan Party to any Laurus Creditor, whether now existing or hereafter arising, direct or indirect, liquidated or unliquidated, absolute or contingent, due or not due and whether under, pursuant to or evidenced by a note, agreement, guaranty, instrument or otherwise, in each case, irrespective of the genuineness, validity, regularity or enforceability of the Laurus Obligations, or of any instrument evidencing any of the Laurus Obligations or any Laurus Collateral or of the existence or extent of such Laurus Collateral, and irrespective of the allowability, allowance or disallowance of any or all of the Laurus Obligations in any case commenced by or against any Loan Party under Title 11, United States Code, including, without limitation, obligations or indebtedness of any Loan Party for post-petition interest, fees, costs and charges that would have accrued or been added to the Laurus Obligations but for the commencement of such case, irrespective of the allowability, allowance or disallowance of such post-petition interest, fees, costs and charges. "Laurus Preference Obligation" means all indebtedness and other obligations incurred by EPXR and/or any Subsidiary of EPXR and owed to Laurus in connection with issuance of the 2004 Laurus Note and the execution of the other 2004 Laurus Documents. "Loan Party" shall have the meaning ascribed thereto in Section 3 of this Agreement. "Obligations" means, collectively, the Laurus Obligations and the Sands Obligations. "Person" means an individual, partnership, corporation (including a business trust), joint stock company, trust, unincorporated association, joint venture, limited liability company or other entity, or a government or any political subdivision or agency thereof. "Pro Rata Share" means, when calculating a Secured Party's portion of any distribution or amount resulting from proceeds derived from the Shared Collateral in respect of any Defined Obligations at any time after satisfaction of the Laurus Collateral Preference Amount, an amount equal to a fraction, the numerator of which is the then unpaid amount of such Defined Obligations owing to or held by such Secured Party and the denominator of which is the aggregate amount of all Defined Obligations owing by Issuer or any of its Subsidiaries to all the Secured Parties entitled to receive that particular distribution and amount in accordance with Section 8 at such time. "Required Sands Creditors" shall have the meaning assigned such term in Section 9. "Required Laurus Creditors" shall have the meaning assigned such term in Section 9. "Required Secured Parties" shall have the meaning assigned such term in Section 2(d). "Sands Creditors" means, collectively, any and all Persons which hold any indebtedness, liability or obligation under the Sands Documents or any other document, agreement or instrument related thereto, including, without limitation, any successors and/or assigns of any of the Sands Creditors. "Sands Documents" shall have the meaning set forth in the recitals hereto. "Sands Master Security Agreement" shall have the meaning assigned such term in Schedule C. "Sands Obligations" include all debts, liabilities and obligations owing by any Loan Party to any Sands Creditor arising under, out of, or in connection with any Sands Document, and in connection with any documents, instruments or agreements relating to or executed in connection with the Sands Documents or any documents, instruments or agreements referred to therein or otherwise, whether now existing or hereafter arising, direct or indirect, liquidated or unliquidated, absolute or contingent, due or not due, in each case, irrespective of the genuineness, validity, regularity or enforceability of the Sands Obligations, or of any instrument evidencing any of the Sands Obligations or any Shared Collateral or of the existence or extent of such Shared Collateral, and irrespective of the allowability, allowance or disallowance of any or all of the Sands Obligations in any case commenced by or against the Issuer or any of their respective Subsidiaries under Title 11, United States Code, including, without limitation, obligations or indebtedness of any Loan Party for post-petition interest, fees, costs and charges that would have accrued or been added to the Sands Obligations but for the commencement of such case, irrespective of the allowability, allowance or disallowance of such post-petition interest, fees, costs and charges; provided that, notwithstanding the foregoing, the Sands Obligations shall not include any principal amount of indebtedness in excess of an aggregate amount of $1,500,000 and the rate of interest and fees related to the Sands Obligations shall not exceed the rate of interest and fees provided for in the Sands Documents (as in effect on the date hereof). "Shared Collateral" shall mean the "Collateral" under and as defined in each of (i) the Sands Master Security Agreement, (ii) the Sands Stock Pledge Agreement and (iii) the Sands Foreign Documentation, in each case without giving effect to any amendments, modifications or supplementations thereto unless any such amendment, modification or supplementation is agreed to in writing by Laurus; provided that, notwithstanding anything to the contrary contained in this definition, "Shared Collateral" shall explicitly exclude any and all amounts held (or required pursuant to the 2004 Laurus Documents to be held or deposited in) the Reserve Restricted Account (as defined in the 2004 Laurus Reserve Restricted Account Agreement referred to on Schedule B-1 hereto). "2004 Laurus Documents" shall have the meaning set forth in the recitals hereto. "2005 Laurus Documents" shall have the meaning set forth in the recitals hereto. "2005 Laurus Securities Purchase Agreement" shall have the meaning assigned such term in Schedule B-2. "UCC" means the Uniform Commercial Code as in effect from time to time. SECTION 2.62. Authorization and Action. (a) The Secured Parties hereby (i) appoint Laurus as the Collateral Agent for purposes of holding, maintaining and enforcing any Shared Collateral (including, without limitation (1) the naming of the Collateral Agent, as agent for Secured Parties, as secured party in all UCC financing statements filed or to be filed against Issuer and/or any Subsidiary ("Financing Statements") and (2) the execution of any and all Financing Statements by the Collateral Agent on behalf and for the benefit of the Secured Parties) from time to time granted by Issuer and/or any Subsidiary to secure the Obligations and (ii) authorize the Collateral Agent to take such action as agent on their behalf and to exercise such powers and discretion under this Agreement and the other Investor Documents as are delegated to Collateral Agent and/or any Secured Party by the terms hereof and thereof, together with such other powers and discretion as are incidental thereto, including, without limitation, acquiring, holding, and enforcing any and all security interests and liens on the Shared Collateral granted by the Issuer, any Subsidiary or any other Person to secure any Obligations. To secure the payment and performance of the Obligations, Issuer, Subsidiaries and Secured Parties hereby acknowledge, confirm and agree that Collateral Agent has and shall continue to have for the benefit of the Secured Parties a continuing security interest in all Shared Collateral heretofore granted to the Collateral Agent, for the benefit of the Secured Parties pursuant to the Security Documents and, to the extent not otherwise granted to Collateral Agent, Issuer and Subsidiaries hereby assign, pledge and grant to Collateral Agent, for the benefit of Secured Parties, a continuing security interest in and to the Shared Collateral. (b) The Collateral Agent may from time to time and at its sole discretion appoint any other Person to act as the Collateral Agent's sub-agent for purposes of holding any lien or security interest granted under the Security Documents or exercising rights and remedies thereunder at the direction of the Collateral Agent, subject to the terms of this Agreement. In this connection, such sub-agents shall be entitled to the benefits of provisions of this Agreement as though such sub-agents were the "Collateral Agent" under this Agreement. (c)62.1 Notwithstanding any provision to the contrary in the Investor Documents, the Collateral Agent shall have, with respect to the Issuer and the Subsidiaries, the duties and responsibilities expressly set forth in this Agreement and the other Investor Documents, and no others, and the Collateral Agent shall not by reason of this Agreement or any other Investor Document be a trustee for, or have any fiduciary obligations to, the Issuer or any Subsidiary, and no implied covenant, functions or responsibilities shall be read into this Agreement or the other Investor Documents or otherwise exist against the Collateral Agent. (d)62.2 Collateral Agent shall not be required to exercise any discretion or take any action under any Investor Document. Following the occurrence and during the continuance of an Event of Default under and as defined in any applicable Investor Document, the Collateral Agent shall have the exclusive right to declare an Event of Default under and as defined in the applicable Investor Document following receipt by Collateral Agent from any Secured Party of a Notice of Default (as hereinafter defined) and may (or shall within thirty (30) days (or such shorter period as is acceptable to the Collateral Agent), following receipt of written notice from a Secured Party directing Collateral Agent to exercise commercially reasonable remedies under the applicable Investor Documents and applicable law, commence exercising its right and remedies under the applicable Investor Documents or otherwise authorize the requesting Secured Party to take such action on behalf of Collateral Agent. Notwithstanding anything contained herein to the contrary, (x) Collateral Agent shall not be required to take any action which exposes it to personal liability or that is contrary to any Investor Document or applicable law and (y) Collateral Agent shall not take any action following receipt of a Notice of Default unless the Collateral Agent has received the approval of the Secured Parties holding at least 50.1% of the Obligations (such Secured Parties, the "Required Secured Parties") with respect to any such action. For purposes hereof, the term "Notice of Default" means a notice delivered by a Secured Party to Collateral Agent stating that an Event of Default under and as defined in any Investor Document has occurred and is continuing beyond any applicable cure or grace period. Notwithstanding the provisions of this Section 2 (d) and anything else to the contrary in the Investor Documents (but subject to the immediately following proviso), in the event that prior to the March 31, 2006, there shall occur and be continuing an Event of Default pursuant to any Laurus Preference Obligation or any 2004 Laurus Document which shall, as a result thereof, result in an Event of Default under, and as defined in, the Laurus Defined Obligations or the 2005 Laurus Documents (a "Cross Default") and Laurus shall deliver a Notice of Default in respect of the Laurus Defined Obligations as a result of a Cross Default (a "Cross Default Notice of Default"), the Collateral Agent shall not have any right, power or authority, without first being in receipt of the approval of each of the Required Sands Creditors and the Required Laurus Creditors, to accelerate, liquidate, sell or otherwise act in respect of the Shared Collateral (each, a "Remedial Action") for the purpose of obtaining the payment of the Laurus Obligations (it being understood that nothing contained in this sentence shall affect in any respect any right of Collateral Agent to take any Remedial Action following the provision of a Notice of Default by Laurus as a result of the occurrence of any Event of Default (other than a Cross Default) under, or in respect of, any 2005 Laurus Document); provided that, notwithstanding anything to the contrary contained in this sentence, (I) in the event that a Cross Default Notice of Default is delivered on or after September 30, 2005 and prior to December 31, 2005, Laurus may take Remedial Actions to collect up to 15% of any amounts received for the benefit of the Collateral Agent on or after September 30, 2005 and prior to December 31, 2005 by the Lockbox Bank (as defined in the 2005 Laurus Master Security Agreement) in any Lockbox (as defined in the 2005 Laurus Master Security Agreement) and (II) in the event that a Cross Default Notice of Default is delivered on or after December 31, 2005 and prior to March 31, 2006, Laurus may take Remedial Actions to collect up to 30% of any amounts received for the benefit of the Collateral Agent on or after December 31, 2005 and prior to March 31, 2006 by the Lockbox Bank in any Lockbox (as defined in the 2005 Laurus Master Security Agreement). Any such collections pursuant to the immediately preceding proviso shall be solely applied by the Collateral Agent to the reduction of the Laurus Preference Obligations and shall not, cumulatively, exceed an amount equal to the Laurus Collateral Preference Amount. (e)62.3 In performing its functions and duties under this Agreement and the other Investor Documents, Collateral Agent shall act solely as an agent of the Secured Parties and does not assume and shall not be deemed to have assumed any obligation toward or relationship of agency or trust with or for Issuer, any Subsidiary or any other Person. Collateral Agent shall have no duties or responsibilities except for those expressly set forth in this Agreement. The duties of Collateral Agent shall be mechanical and administrative in nature and Collateral Agent shall not have, nor be deemed to have, by reason of this Agreement, any other Investor Document or otherwise, a fiduciary relationship in respect of any Secured Party. Except as expressly set forth in this Agreement, Collateral Agent shall not have any duty to disclose, and shall not be liable for failure to disclose, any information relating to Issuer or any Subsidiary that is communicated to or obtained by Collateral Agent or any of its affiliates in any capacity. (f)62.4 If Collateral Agent shall request instructions from any Secured Party with respect to any act or action (including failure to act) in connection with this Agreement or any other Investor Document, Collateral Agent shall be entitled to refrain from such act or taking such action unless and until Collateral Agent shall have received instructions from such Secured Party and Collateral Agent shall not incur liability to any Person by reason of so refraining. Collateral Agent shall be fully justified in failing or refusing to take any action hereunder or under any other Investor Document (i) if such action would, in the opinion of Collateral Agent, be contrary to law or the terms of this Agreement or any other Investor Document or (ii) if Collateral Agent shall not first be indemnified to its satisfaction against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Without limiting the foregoing, no Secured Party shall have any right of action whatsoever against Collateral Agent as a result of Collateral Agent's acting or refraining from acting hereunder or under any other Investor Document in accordance with the instructions of the Secured Parties. (g)62.5 Anything in this Agreement or any other Investor Document to the contrary notwithstanding, each Secured Party hereby agrees with each other Secured Party that no Secured Party shall take any action to protect or enforce its rights arising out of the Investor Documents (including exercising any rights of setoff) without first obtaining the prior written consent of Collateral Agent and the Required Secured Parties, it being the intent of the Secured Parties that any such action to protect or enforce rights under the Investor Documents shall be taken in concert and at the direction or with the consent of Collateral Agent or Required Secured Parties, as applicable. (h)62.6 The powers conferred on the Collateral Agent hereunder are solely to protect the interest of the Secured Parties (including, without limitation, the Collateral Agent in its individual Secured Party capacity) in the Shared Collateral and, except as expressly set forth in the preceding clause (d), shall not impose any duty upon the Collateral Agent to exercise any such powers. Except for the safe custody of any Shared Collateral in its possession and the accounting for moneys actually received by it hereunder, the Collateral Agent shall have no duty as to any Shared Collateral, whether or not the Collateral Agent or any Secured Party has or is deemed to have knowledge of such matters, or as to the taking of any necessary steps to preserve the rights against any parties or any other rights pertaining to any Shared Collateral. (i)62.7 The Issuer and each Subsidiary hereby consent and agree, upon request by the Collateral Agent, to execute and deliver such agreements, instruments and documents as the Collateral Agent may deem desirable to create, preserve and/or release the liens and security interests in the Shared Collateral, including any release in connection with any sale, transfer or other disposition of the Shared Collateral or any part thereof in accordance with any Investor Document), or for application thereof pursuant to the terms of the Investor Documents. SECTION 3.63. Collateral Agent's Reliance. Etc. Neither the Collateral Agent nor any of its directors, officers, partners, managers, members, agents or employees shall be liable for any action taken or omitted to be taken by it or them under or in connection with this Agreement or any other Investor Document, except for its or their own gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). Without limiting the generality of the foregoing, the Collateral Agent: (a) may consult with its counsel, independent public accountants and other experts selected by it and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts; (b) makes no warranty or representation to any Secured Party, the Issuer or any of its Subsidiaries (hereinafter, the "Loan Party") and shall not be responsible to any Loan Party for any statements, warranties or representations made in, or in connection with, this Agreement; (c) shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of any Investor Document, including, the Financing Statements, on the part of any Loan Party or to inspect the property (including the books and records) of any Loan Party; (d) shall not be responsible to any Loan Party for the due execution, legality, validity, enforceability, genuineness, sufficiency or value of any Investor Document, any of the Shared Collateral or any other instrument or document furnished pursuant hereto or thereto or the perfection or collectibility of any Shared Collateral; and (e) shall incur no liability under or in respect of any Investor Document by acting upon any notice, consent, certificate or other instrument or writing (which may be by electronic mail, telecopy, or otherwise) believed by the Collateral Agent to be genuine and signed or sent by the proper party or parties. SECTION 4.64. The Collateral Agent in Its Individual Capacity. With respect to the Obligations owing to it under the Investor Documents, the Collateral Agent in its individual capacity as a Secured Party shall have the same rights and powers, and have the same obligations, under the Investor Documents as any other Secured Party and may exercise the same as though it were not the Collateral Agent; and the term Secured Party shall, unless otherwise expressly indicated, include Laurus or such other Person, or any other Person serving as the Collateral Agent in its individual capacity. Laurus, or any other Person serving as the Collateral Agent, and its affiliates may accept deposits from, lend money to, act as trustee under indentures of, accept other business engagements from and generally engage in any kind of business with any Loan Party, any of its subsidiaries and any Person who may do business with or own securities of any Loan Party, or any such subsidiary, all as if Laurus or such other Person were not the Collateral Agent and without any duty to account to any Loan Party. SECTION 5.65. Resignation of the Collateral Agent. The Collateral Agent may resign at any time as Collateral Agent under this Agreement by giving written notice thereof to the Secured Parties. Following any such resignation, the Collateral Agent shall give notice thereof to the Issuer; provided, that the failure to give such notice shall not affect the validity or effectiveness of such resignation. Upon any such resignation under this Agreement, the Secured Parties shall have the right to appoint a successor Collateral Agent under this Agreement. If no successor Collateral Agent shall have been so appointed by the Secured Parties, and shall have accepted such appointment, within 30 days after the retiring Collateral Agent's giving of notice of resignation, then the retiring Collateral Agent may, on behalf of the Secured Parties, appoint a successor Collateral Agent. Upon the acceptance of any appointment as Collateral Agent hereunder by a successor Collateral Agent and upon the execution and filing or recording of such financing statements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as the Secured Parties may request, in order to continue the perfection of the liens granted by the Security Documents in accordance with the terms thereof, such successor Collateral Agent shall succeed to and become vested with, all the rights, powers, discretion, privileges and duties of the retiring Collateral Agent and the retiring Collateral Agent shall be discharged from its duties and obligations under this Agreement without any other or further act or deed on the part of such former Collateral Agent. After any retiring Collateral Agent's resignation hereunder as Collateral Agent, the provisions of this Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Collateral Agent under this Agreement. SECTION 6.66. Sharing of Security Interests. Any and all security interests, liens, rights and interests of the Secured Parties, whether now or hereafter arising or existing, in or on any or all of the Shared Collateral shall be subject to the priority set forth in Section 8, notwithstanding: (a) the time, order, manner or method of creation, attachment or perfection of the respective security interests and/or liens granted to the Collateral Agent or a Secured Party in or on any or all of the property or assets of the Issuer or any Subsidiary in connection with the transactions contemplated by the Investor Documents, (b) the time or manner of the filing of their respective financing statements, (c) whether the Collateral Agent, a Secured Party or any bailee or agent thereof holds possession of any or all of the property or assets of the Issuer, (d) the dating, execution or delivery of any agreement, document or instrument granting the Secured Parties or the Collateral Agent security interests and/or liens in or on any or all of the property or assets of the Issuer or any Subsidiary or (e) any provision of the UCC or any other applicable law. For purposes of the foregoing, any claim of a right of set-off shall be treated in all respects as a security interest and no claimed right of set-off shall be asserted to defeat or diminish the rights or priorities provided for herein. SECTION 7.67. Sharing of Payments. In the event any moneys are collected by the Collateral Agent upon any collection, sale or other disposition of any Shared Collateral, the Secured Party receiving such payment shall receive and hold the same in trust, as trustee, for the benefit of the Secured Parties and shall forthwith deliver the same to the Collateral Agent. Distribution of such moneys referred to in the immediately preceding sentence, shall be applied by the Collateral Agent in accordance with Section 8. Notwithstanding anything contained in this Agreement or any other Investor Document to the contrary, (i) no Sands Creditor shall be entitled to or have any interest or claim whatsoever in (x) the Closing Payment (as defined in the 2005 Laurus Securities Purchase Agreement identified as an Investor Document on Schedule B-2 hereto) paid by Issuer to Laurus Capital Management, LLC in connection with the transactions contemplated by the Laurus Documents or (y) any Collateral other than the Shared Collateral and (ii) no Laurus Creditor shall be entitled to or have any interest or claim whatsoever in the $400,000 payment to be made at closing by the Issuer to Laidlaw & Company (UK) Ltd. (as such payment is identified in the 2005 Sands Securities Purchase Agreement identified as an Investor Document on Schedule C hereto) in connection with the transactions contemplated by the Sands Documents. SECTION 8.68. Application of Proceeds. (a) All moneys collected by the Collateral Agent upon any collection, sale or other disposition of any Shared Collateral shall be applied as follows: (i) (a) first, to the payment of (x) any and all sums advanced by the Collateral Agent in order to preserve or protect the Shared Collateral or preserve or protect its security interest in the Collateral, (y) the reasonable fees and expenses of the Collateral Agent of foreclosing, re-taking, holding, preparing for sale or lease, selling or otherwise disposing or realizing on the Shared Collateral, or of any exercise by the Collateral Agent of its rights or remedies hereunder or under the other Investor Documents, together with reasonable attorneys' fees and expenses and court costs, incurred by Collateral Agent or any Secured Party in connection therewith; 3 second, to the extent moneys remain after the application pursuant to the preceding clauses (i), to the payment of the Laurus Preference Obligations in an amount equal to the Laurus Collateral Preference Amount at such time; 4 third, to the extent moneys remain after the application pursuant to the preceding clauses (i) and (ii), to the payment of any and all outstanding Defined Obligations owing to each Secured Party in accordance with such Secured Party's Pro Rata Share; and 5 fourth, after satisfaction and payment in full of all Defined Obligations resulting from payments made pursuant to the preceding clause (iii), to the extent moneys remain after the application pursuant to the preceding clauses (i) through (iii), inclusive, any surplus then remaining shall be applied by the Collateral Agent to then remaining outstanding Laurus Obligations until all outstanding obligations have been repaid in full, after which any remainder shall be paid to the Issuer or as otherwise required by law or as a court of competent jurisdiction shall direct. (b)68.2 For purposes of determining the amount payable to each Secured Party, the Collateral Agent shall be entitled to request each Secured Party to furnish it with a written certification of the amount of Obligations then owed to it and shall be entitled to rely upon the amounts stated therein in making such distribution. (c)68.3 For purposes of applying payments received in accordance with this Section 8, the Collateral Agent shall be entitled to rely upon the Secured Parties for a determination (which the Secured Parties by their acceptance of the benefits of this Agreement shall be obligated to provide upon request of the Collateral Agent) of the outstanding Obligations owed to each Secured Party. Unless it has actual knowledge to the contrary, the Collateral Agent, in acting hereunder, shall be entitled to assume that no obligations other than principal and interest are owing to any Secured Party. 6 Notwithstanding anything to the contrary contained in this Section 8, elsewhere in this Agreement or in any other Investor Document, all Laurus Collateral (other than the Shared Collateral) assigned to Laurus or any other Laurus Creditor to secure the Laurus Obligations and/or any other obligation owed by an Loan Party to Laurus shall be solely for the benefit of the Laurus Creditors, and not any Sands Creditor. SECTION 9.69. Waivers and Modifications of Documents. The terms and conditions of this Agreement shall not be amended, modified or waived in any respect without the prior written consent of each of (x) the Laurus Creditors holding at least 50.1% of the Laurus Obligations (the "Required Laurus Creditors") and (y) the Sands Creditors holding at least 50.1% of the Bridge Loan Obligations (the "Required Sands Creditors"). Furthermore, (i) no term or condition of any Sands Document shall be amended, modified or waived in any respect without the prior written consent of the Required Laurus Creditors and (ii) no term or condition of any 2005 Laurus Document shall be amended in any respect which would be materially adverse to the value of the Shared Collateral without the prior written consent of the Required Sands Creditors. Without the prior written consent of the Required Secured Creditors, no Secured Party shall provide any additional indebtedness to, or extend any other credit to, the Issuer or any of its Subsidiaries in excess of the amount extended pursuant to the Investor Documents (as such Investor Documents are in effect on the date hereof). SECTION 10.70. Indemnity and Expense. (a) The Secured Parties hereby indemnify the Collateral Agent ratably (in accordance with their respective Pro Rata Share) from and against any and all claims, losses and liabilities growing out of or resulting from this Agreement and the other Investor Documents, including, without limitation, enforcement of this Agreement and the other Investor Documents, except claims, losses or liabilities resulting from the Collateral Agent's gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction. The Issuer and its Subsidiaries hereby acknowledge that all such claims, losses and liabilities shall constitute Obligations secured by the Shared Collateral. (b) To the extent such amounts are not paid by the Issuer or any of its Subsidiaries in accordance with their obligations under the respective Investor Documents, the Secured Parties will upon demand pay (in accordance with their respective Pro Rata Share) to the Collateral Agent the amount of any and all unreimbursed expenses, including the fees and expenses of its counsel and of any experts and agents, which the Collateral Agent may incur in connection with (i) the administration of this Agreement, (ii) the custody, maintenance, preservation, use or operation of, or the sale of, collection from, or other realization upon, any of the Shared Collateral, (iii) the exercise or enforcement of any of the rights of the Collateral Agent or any Secured Party hereunder or under any other Investor Document, or (iv) the failure by the Issuer or any of its Subsidiaries to perform or observe any of the provisions hereof. The Issuer and its Subsidiaries hereby acknowledge that all such expenses paid by the Secured Parties shall constitute Obligations secured by the Shared Collateral. SECTION 11.71. Notices. Whenever it is provided herein or in the other Investor Documents that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any of the parties by any other parties, or whenever any of the parties desires to give or serve upon any other parties any communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be deemed to have been validly served, given or delivered: (a) upon the earlier of actual receipt and three (3) business days after deposit in the United States Mail, registered or certified mail, return receipt requested, with proper postage prepaid; (b) upon transmission, when sent by telecopy or other similar facsimile transmission (with such telecopy or facsimile promptly confirmed by delivery of a copy by personal delivery or United States Mail as otherwise provided in this Section 11); (c) one (1) business day after deposit with a reputable overnight courier with all charges prepaid or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address or facsimile number indicated in Schedule E or to such other address (or facsimile number) as may be substituted by notice given as herein provided. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. SECTION 12.72. Continuing Agreement; Assignments. This Agreement is a continuing agreement and shall (a) remain in full force and effect until the indefeasible payment in full of the Obligations and irrevocable termination of the Investor Documents and (b) be binding upon the Secured Parties, Issuer and Subsidiaries, their successors and assigns, and (c) inure, together with the rights and remedies of the Collateral Agent hereunder, to the benefit of the Collateral Agent and its respective successors, transferees and assigns. SECTION 13.73. Governing Law; Counterparts. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, MAY BE EXECUTED IN SEVERAL COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED TO BE AN ORIGINAL, AND SHALL INURE TO THE BENEFIT OF AND BE BINDING UPON THEIR RESPECTIVE SUCCESSORS AND ASSIGNS. EXCEPT AS SET FORTH BELOW IN THIS SECTION 11.1, ANY AND ALL DISPUTES, CONTROVERSIES AND CLAIMS THAT THE ISSUER OR ANY OF ITS SUBSIDIARIES MAY ASSERT AGAINST ANY SECURED PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER INVESTOR DOCUMENT SHALL BE DETERMINED EXCLUSIVELY BY ARBITRATION (EACH SUCH ARBITRATION, AN "ARBITRATION") IN NEW YORK CITY BEFORE A PANEL OF THREE NEUTRAL ARBITRATORS AGREED TO BY THE REQUIRED SECURED PARTIES AND THE ISSUER (COLLECTIVELY, THE "ARBITRATORS") IN ACCORDANCE WITH AND PURSUANT TO THE THEN EXISTING COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. THE ISSUER (ON ITS BEHALF AND ON BEHALF OF ITS SUBSIDIARIES) HEREBY IRREVOCABLY WAIVES ANY RIGHT TO ASSERT SUCH CLAIMS IN ANY OTHER FORUM. THE ARBITRATORS SHALL HAVE THE POWER IN THEIR DISCRETION TO AWARD SPECIFIC PERFORMANCE OR INJUNCTIVE RELIEF (BUT SHALL NOT HAVE THE POWER TO RENDER ANY INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES) AND REASONABLE ATTORNEYS' FEES AND EXPENSES TO ANY PARTY IN ANY ARBITRATION. THE ARBITRATORS MAY NOT CHANGE, MODIFY OR ALTER ANY EXPRESS CONDITION, TERM OR PROVISION OF THIS AGREEMENT OR OF ANY OTHER INVESTOR DOCUMENT NOR SHALL THEY HAVE THE POWER TO RENDER ANY AWARD AGAINST ANY SECURED PARTY THAT WOULD HAVE SUCH EFFECT. EACH ARBITRATION AWARD SHALL BE FINAL AND BINDING UPON THE PARTIES SUBJECT THERETO AND JUDGMENT MAY BE ENTERED THEREON IN ANY COURT OF COMPETENT JURISDICTION. THE SERVICE OF ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN CONNECTION WITH AN ARBITRATION OR FOR THE ENFORCEMENT OF ANY ARBITRATION AWARD MAY BE MADE IN THE SAME MANNER AS COMMUNICATIONS MAY BE GIVEN UNDER SECTION 11 HEREOF. NOTWITHSTANDING THE FOREGOING, THE PROVISIONS OF THIS SECTION 13 NOR ANY OTHER PROVISION CONTAINED IN THIS AGREEMENT OR IN ANY OTHER INVESTOR DOCUMENT SHALL LIMIT IN ANY MANNER WHATSOEVER ANY SECURED PARTY'S RIGHT TO COMMENCE AN ACTION AGAINST OR IN CONNECTION WITH THE ISSUER, ANY OF ITS SUBSIDIARIES OR THEIR RESPECTIVE PROPERTIES IN ANY COURT OF COMPETENT JURISDICTION OR OTHERWISE UTILIZE JUDICIAL PROCESS IN CONNECTION WITH OR ARISING OUT OF SUCH SECURED PARTY'S RIGHTS AND REMEDIES UNDER THIS AGREEMENT AND/OR ANY OTHER INVESTOR DOCUMENT OR OTHERWISE (ANY SUCH ACTION, A "COURT ACTION"). COURT ACTIONS MAY BE BROUGHT BY THE SECURED PARTIES IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION AND THE ISSUER (ON ITS BEHALF AND ON BEHALF OF ITS SUBSIDIARIES) IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH STATE AND FEDERAL COURTS AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE OF INCONVENIENT FORUM OR LACK OF PERSONAL JURISDICTION IN SUCH FORUM OR RIGHT OF REMOVAL OR RIGHT TO JURY TRIAL UNDER ANY APPLICABLE LAW OR DECISION OR OTHERWISE. SERVICE OF ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN CONNECTION WITH A COURT ACTION MAY BE MADE IN THE SAME MANNER AS COMMUNICATIONS MAY BE GIVEN UNDER SECTION 11. IN ADDITION, ANY SECURED PARTY MAY SERVE PROCESS IN ANY OTHER MANNER PERMITTED UNDER APPLICABLE LAW. [SIGNATURE LINES ON FOLLOWING PAGE] IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first above written. LAURUS MASTER FUND, LTD., as a Secured Party and Collateral Agent By: /s/ --------------------------------------- Authorized Officer Name: Title: Sands Brothers Venture Capital LLC Sands Brothers Venture Capital II, LLC Sands Brothers Venture Capital III, LLC Sands Brothers Venture Capital IV, LLC By: /s/ --------------------------------------- Authorized Officer Name: Title: ACKNOWLEDGED AND AGREED TO: By: /s/ Ilene Kaminsky ----------------------------------- Name: Ilene Kaminsky Title: CEO VOXX CORPORATION By: /s/ Ilene Kaminsky ----------------------------------- Name: Ilene Kaminsky Title: CEO XXXXXXXXXXXXXXXXX SCHEDULE A SECURED PARTIES 7 Laurus Creditors Laurus Master Fund, Ltd., a Cayman Islands corporation. II. Sands Creditors - ------------------------------------------------------- SANDS BROTHERS VENTURE CAPITAL LLC 90 Park Avenue New York, NY 10016 $100,000 Fax: 212 697 8035 Tax Id: 13 4102660 - ------------------------------------------------------- SANDS BROTHERS VENTURE CAPITAL II LLC 90 Park Avenue New York, NY 10016 $50,000 Fax: 212 697 8035 Tax Id: 13 4110488 - ------------------------------------------------------- SANDS BROTHERS VENTURE CAPITAL III LLC 90 Park Avenue New York, NY 10016 $1,200,000 Fax: 212 697 8035 Tax Id: 13 4137586 - ------------------------------------------------------- SANDS BROTHERS VENTURE CAPITAL IV LLC 90 Park Avenue New York, NY 10016 $150,000 Fax: 212 697 8035 Tax Id: 13 4157861 - ------------------------------------------------------- SCHEDULE B-1 2004 LAURUS DOCUMENTS All of the following documents, instruments and agreements, as amended, modified, supplemented and/or restated from time to time: (i) this Agreement; (ii) the Securities Purchase Agreement, dated as of May 14, 2004, by and between EPXR and Laurus (the "2004 Laurus Securities Purchase Agreement"); (iii) the Secured Convertible Term Note dated May 14, 2004 made by the EPXR in favor of Laurus (the "2004 Laurus Note"); (iv) Warrant I and Warrant II, each dated May 14, 2004, and each other warrant dated after May 14, 2004, in each case issued by EPXR to Laurus in connection with the 2004 Laurus Securities Purchase Agreement (collectively, the "2004 Warrants"); (v) the Master Security Agreement dated as of May 14, 2004 by and among the Company, certain Subsidiaries of the Company and Laurus (the "2004 Laurus Master Security Agreement"); (vi) the Registration Rights Agreement relating to the 2004 Laurus Securities Purchase Agreement dated as of May 14, 2004 between EPXR and Laurus (the "2004 Laurus Registration Rights Agreement); (vii) the Subsidiary Guaranty dated as of May 14, 2004 made by certain Subsidiaries of EPXR (the "2004 Laurus Subsidiary Guaranty"); (viii) the Stock Pledge Agreement dated as of May 14, 2004 among EPXR, certain Subsidiaries of EPXR and Laurus (the "2004 Laurus Stock Pledge Agreement"); (ix) the Escrow Agreement dated as of May 14, 2004 among EPXR, Laurus and the escrow agent referred to therein; (x) the Laurus Restricted Account Agreement dated as of May 14, 2004 among EPXR, the Purchaser and North Fork Bank (including the side letter dated as of the date hereof and related thereto, the "2004 Laurus Restricted Account Agreement"); (xi) the Reserve Restricted Account Agreement dated as of May 14, 2004 among EPXR, Laurus and North Fork Bank (the "2004 Laurus Reserve Restricted Account Agreement"); (xii) (x) security agreements executed by Foreign Subsidiaries of EPXR in favor of Laurus granting Laurus a security interest in all of such Foreign Subsidiaries assets and (y) guaranties made by the Foreign Subsidiaries of EPXR guaranteeing the obligations of EPXR set forth in the 2004 Laurus Securities Purchase Agreement, the 2004 Note and the other Related Agreements referred to in the 2004 Laurus Securities Purchase Agreement (which agreements and guaranties, in each case, shall be governed by the jurisdiction of organization of each such Foreign Subsidiary (the preceding clauses (x) and (y), collectively, the "2004 Laurus Foreign Documentation"); and (xiii) all other agreements related to the 2004 Laurus Securities Purchase Agreement and the 2004 Laurus Note. SCHEDULE B-2 2005 LAURUS DOCUMENTS (i) this Agreement; (ii) the Securities Purchase Agreement, dated as of the date hereof, by and between the Issuer and Laurus (the "2005 Laurus Securities Purchase Agreement"); (iii) the Secured Convertible Term Note dated as of the date hereof, made by the Issuer in favor of Laurus (the "2005 Laurus Note"); (iv) that certain Common Stock Purchase Warrant dated the date hereof issued by Voxx to Laurus in connection with the 2005 Securities Purchase Agreement (collectively, the "2005 Laurus Warrant"); 8 the Master Security Agreement dated as of the date hereof by and among EPXR, certain Subsidiaries of EPXR and Laurus (the "2005 Laurus Master Security Agreement"); (vi) (x) the EPXR Registration Rights Agreement relating to the 2005 Securities Purchase Agreement dated as of the date hereof between EPXR and Laurus (the "2005 Laurus EPXR Registration Rights Agreement) and (y) the VOXX Registration Rights Agreement relating to the 2005 Securities Purchase Agreement dated as of the date hereof between Voxx and Laurus (the "2005 Laurus VOXX Registration Rights Agreement) 9 the Guaranty dated as of the date hereof made by EPXR and certain Subsidiaries of EPXR (the "2005 Laurus Guaranty"); (viii) the Stock Pledge Agreement dated as of the date hereof among the EPXR, certain Subsidiaries of EPXR and Laurus (the "2005 Laurus Stock Pledge Agreement"); (ix) the Escrow Agreement dated as of the date hereof among EPXR, Laurus and the escrow agent referred to therein; 10 that certain Option dated the date hereof issued by Voxx to Laurus (the "2005 Laurus Option") (xi) (x) security agreements executed by Foreign Subsidiaries of the Issuer in favor of Laurus granting Laurus a security interest in all of such Foreign Subsidiaries assets and (y) guaranties made by the Foreign Subsidiaries of the Issuer guaranteeing the obligations of the Issuer set forth in the 2005 Securities Purchase Agreement, the 2005 Note and the other Related Agreements referred to in the 2005 Securities Purchase Agreement (which agreements and guaranties, in each case, shall be governed by the jurisdiction of organization of each such Foreign Subsidiary (the preceding clauses (x) and (y), collectively, the "2005 Laurus Foreign Documentation"); and (xii) all other agreements entered into in connection with the 2005 Laurus Securities Purchase Agreement and the 2005 Laurus Note. SCHEDULE C SANDS DOCUMENTS All of the following documents, instruments and agreements, as amended, modified, supplemented and/or restated from time to time: 11 this Agreement. (ii) the Securities Purchase Agreement, dated as of the date hereof, by and between the Issuer and the Sands Creditors (the "2005 Sands Securities Purchase Agreement"); (iii) the four (4) Secured Convertible Term Notes dated as of the date hereof, made by the Issuer in favor of each of the Sands Creditors (the "2005 Sands Notes"); (iv) that certain Common Stock Purchase Warrant dated the date hereof issued by Voxx to Laidlaw & Company (UK) Ltd. ("Laidlaw") in connection with the 2005 Sands Securities Purchase Agreement (collectively, the "2005 Laidlaw Warrant"); 12 the Master Security Agreement dated as of the date hereof by and among VOXX, certain Subsidiaries of VOXX and the Sands Creditors (the "2005 Sands Master Security Agreement"); (vi) (x) the EPXR Registration Rights Agreement relating to the 2005 Securities Purchase Agreement dated as of the date hereof between EPXR, the Sands Creditors and Laidlaw (the "2005 Sands EPXR Registration Rights Agreement) and (y) the VOXX Registration Rights Agreement relating to the 2005 Securities Purchase Agreement dated as of the date hereof between VOXX, the Sands Creditors and Laidlaw (the "2005 Sands /LaidlawVOXX Registration Rights Agreement) 13 the Guaranty dated as of the date hereof made by EPXR and VOXX and certain Subsidiaries of EPXR and VOXX (the "2005 Sands Guaranty"); (viii) the Stock Pledge Agreement dated as of the date hereof among EPXR and VOXX, certain Subsidiaries of VOXX and the Sands Creditors (the "2005 Sands Stock Pledge Agreement"); (ix) the Escrow Agreement dated as of the date hereof among EPXR, Laurus and the escrow agent referred to therein; 14 that certain Option dated the date hereof issued by Voxx to the Sands Creditors (the "2005 Sands Option") (xi) (x) security agreements executed by Foreign Subsidiaries of the Issuer in favor of the Sands Creditors granting the Sands Creditors a security interest in all of such Foreign Subsidiaries assets and (y) guaranties made by the Foreign Subsidiaries of the Issuer guaranteeing the obligations of the Issuer set forth in the 2005 Sands Securities Purchase Agreement, the 2005 Sands Notes and the other Related Agreements referred to in the 2005 Sands Securities Purchase Agreement (which agreements and guaranties, in each case, shall be governed by the jurisdiction of organization of each such Foreign Subsidiary (the preceding clauses (x) and (y), collectively, the "2005 Sands Foreign Documentation"); and (xii) all other agreements entered into in connection with the 2005 Sands Securities Purchase Agreement and the 2005 Sands Notes. SCHEDULE D 2005 SECURITY DOCUMENTS All of the following documents, instruments and agreements, as amended, modified, supplemented and restated from time to time: 2005 Laurus Master Security Agreement 2005 Laurus Stock Pledge Agreement 2005 Laurus Guaranty 2005 Laurus Foreign Documentation 2005 Sands Master Security Agreement 2005 Sands Stock Pledge Agreement 2005 Sands Guaranty 2005 SANDS FOREIGN DOCUMENTATION SCHEDULE E NOTICE INFORMATION Name and Addresses 1. Laurus Master Fund, Ltd. 825 Third Avenue New York, NY 10022 Attention: John E. Tucker, Esq. Facsimile: (212) 541-4434 Laidlaw & Company (UK) Ltd. 2. 90 Park Avenue, 39th Floor New York, NY 10016 Attn: Mr. Marc Koplic Facsimile: 212-697-8035 3. Epixtar Corp. Voxx Corporation 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 Attention: Legal Department Facsimile: 305-503-8610 EX-4.13.10 11 b406530ex4_13-10.txt EXHIBIT 4.13.10 EXHIBIT 4.13.10 THIS OPTION AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS OPTION AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS OPTION MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS OPTION UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO VOXX CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. Right to Purchase up to 3,274,094 Shares of Common Stock of Voxx Corporation (subject to adjustment as provided herein) OPTION No. _________________ Issue Date: April 29, 2005 VOXX CORPORATION, a corporation organized under the laws of the State of Florida ("Company"), 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 Option and at any time or from time to time, up to 3,274,094 fully paid and nonassessable shares of Common Stock (as hereinafter defined), $0.001 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: 2. The term "Company" shall include Voxx Corporation and any corporation that shall succeed, or assume the obligations of, Voxx Corporation hereunder. 3. The term "Common Stock" includes (i) the Company's Common Stock, $0.001 par value 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. 4. The "Exercise Price" applicable under this Option shall be a price of $0.001 per share. 5. 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 at any time shall be entitled to receive, or shall have received, on the exercise of the Option, in lieu of or in addition to Common Stock, or 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. 74. Exercise of Option. 74.1 Number of Shares Issuable upon Exercise. From and after the date hereof, the Holder shall be entitled to receive, upon exercise of this Option 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"), shares of Common Stock of the Company, subject to adjustment pursuant to Section 4. Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to exercise this Option in connection with that number of shares of Common Stock which would exceed the difference between (i) 4.99% of the issued and outstanding shares of Common Stock and (ii) the number of shares of Common Stock beneficially owned by the Holder. For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder. The limitation described in the second sentence of this Section 1.1 shall automatically become null and void without any notice to the Company upon the occurrence and during the continuance beyond any applicable grace period of an Event of Default under and as defined in that certain Note dated as of the date hereof among the Holder and the Company, or upon 75 days prior notice to the Company. 74.2 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 quoted on the NASD Over The Counter 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 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 Option are outstanding at the Determination Date. 74.3 Company Acknowledgment. The Company will, at the time of the exercise of the Option, upon the request of the Holder hereof acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of the Option. If the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights. 74.4 Trustee for Option Holders. In the event that a bank or trust company shall have been appointed as trustee for the Holder of the Option pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of an option 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 Option pursuant to this Section 1. 75. Procedure for Exercise. 75.1 Delivery of Stock Certificates, Etc., on Exercise. The Company agrees that the shares of Common Stock purchased upon exercise of this Option 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 Option shall have been surrendered and payment made for such shares in accordance herewith. As soon as practicable after the exercise of this Option 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. 75.2 Exercise. (a) Payment shall be made in cash or by certified or official bank check payable to the order of the Company equal to the applicable aggregate Exercise Price for the number of Common Stock 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 Option) 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. 76. Effect of Reorganization, Etc.; Adjustment of Exercise Price. 76.1 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, 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 Option, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 4. 76.2 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 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 (the "Trustee"). 76.3 Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Option 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 Option 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 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 Option as provided in Section 4. In the event this Option 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 will be delivered to Holder or the Trustee as contemplated by Section 3.2. 77. 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 or any preferred stock issued by the Company, (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 (each of the preceding clauses (a) through (c), inclusive, an "Event"), then, in each such event, the number of shares of Common Stock that the Holder shall thereafter, on the exercise hereof as provided in Section 1, be entitled to receive shall be increased or decreased to a number determined by multiplying the number of shares of Common Stock that would, immediately prior to such Event, be issuable upon the exercise of this Option by a fraction of which (a) the numerator is the number of issued and outstanding shares of Common Stock immediately after such Event, and (b) the denominator is the number of issued and outstanding shares of Common Stock immediately prior to such Event. 78. 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 Option, 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 Option 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 Option, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Option. The Company will forthwith mail a copy of each such certificate to the Holder and any Option agent of the Company (appointed pursuant to Section 10 hereof). 79. Reservation of Stock, Etc., Issuable on Exercise of Option. The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Option, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Option. 80. Assignment; Exchange of Option. Subject to compliance with applicable securities laws, this Option, 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 Option, 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 Option 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 Option so surrendered by the Transferor. 81. Replacement of Option. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Option and, in the case of any such loss, theft or destruction of this Option, 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 Option, the Company at its expense will execute and deliver, in lieu thereof, a new Option of like tenor. 82. Registration Rights. The Holder has been granted certain registration rights by the Company. These registration rights are set forth in a VOXX Registration Rights Agreement entered into by the Company and Holder dated as of even date of this Option. 83. Option Agent. The Company may, by written notice to each Holder of the Option, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Option pursuant to Section 1, exchanging this Option pursuant to Section 7, and replacing this Option pursuant to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 84. Transfer on the Company's Books. Until this Option 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. 85. Notices, Etc. All notices and other communications from the Company to the Holder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the Holder, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by first class registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt, 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 who has so furnished an address to the Company. 86. Miscellaneous. THIS OPTION 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 OPTION 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 Option 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 Option 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 Option 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 Option. The headings in this Option 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 acknowledges that legal counsel participated in the preparation of this Option 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 Option to favor any party against the other party. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.] IN WITNESS WHEREOF, the Company has executed this Option as of the date first written above. VOXX CORPORATION WITNESS: By: /s/ Ilene Kaminsky ---------------------------- Name: Ilene Kaminsky ---------------------------- Title: CEO - ---------------------------- ---------------------------- EXHIBIT A FORM OF SUBSCRIPTION (To Be Signed Only On Exercise Of Options) TO: VOXX Corporation Attention: Chief Financial Officer The undersigned, pursuant to the provisions set forth in the attached Option (No. ____), hereby irrevocably elects to purchase (check applicable box): ________ ________ shares of the Common Stock covered by such Option. The undersigned herewith makes payment of the full Exercise Price for such shares at the price per share provided for in such Option, which is $___________. Such payment takes the form of $__________ in lawful money of the United States. 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 Option 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 Option) Address: ---------------------------------- ---------------------------------- EXHIBIT B FORM OF TRANSFEROR ENDORSEMENT (To Be Signed Only On Transfer Of Option) 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 Option to purchase the percentage and number of shares of Common Stock of VOXX CORPORATION into which the within Option 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 VOXX CORPORATION with full power of substitution in the premises. Percentage Number Transferees Address Transferred Transferred - ----------- ------- ----------- ----------- - ------------------ --------------- ------------------- ----------------- - ------------------ --------------- ------------------- ----------------- - ------------------ --------------- ------------------- ----------------- - ------------------ --------------- ------------------- ----------------- Dated _________________________ _______________________________________ (Signature must conform to name of Holder as specified on the face of the Option) Address: ---------------------------------- ---------------------------------- SIGNED IN THE PRESENCE OF: ------------------------------------- (Name) ACCEPTED AND AGREED: [TRANSFEREE] - ----------------------------- (Name) EX-4.13.11 12 b406530ex4_13-11.txt EXHIBIT 4.13.11 EXHIBIT 4.13.11 GUARANTY New York, New York April 29, 2005 FOR VALUE RECEIVED, and in consideration of note purchases from, loans made or to be made or credit otherwise extended or to be extended by Laurus Master Fund, Ltd. ("Laurus") to or for the account of Epixtar Corp., a Florida corporation ("EPXR"), and/or Voxx Corporation, a Florida corporation ("Voxx") (EPXR and Voxx, together with each applicable subsidiary of EPXR, collectively, the "Debtor"), from time to time and at any time and for other good and valuable consideration and to induce Laurus, in its discretion, to purchase such notes, make such loans or extensions of credit and to make or grant such renewals, extensions, releases of collateral or relinquishments of legal rights as Laurus may deem advisable, each of the undersigned (and each of them if more than one, the liability under this Guaranty being joint and several) (jointly and severally referred to as "Guarantors " or "the undersigned") unconditionally guaranties to Laurus, its successors, endorsees and assigns the prompt payment when due (whether by acceleration or otherwise) of all present and future obligations and liabilities of any and all kinds of Debtor to Laurus and of all instruments of any nature evidencing or relating to any such obligations and liabilities upon which Debtor or one or more parties and Debtor is or may become liable to Laurus, whether incurred by Debtor as maker, endorser, drawer, acceptor, guarantors , accommodation party or otherwise, and whether due or to become due, secured or unsecured, absolute or contingent, joint or several, and however or whenever acquired by Laurus, whether arising under, out of, or in connection with (i) that certain Securities Purchase Agreement dated as of the date hereof by and between the Debtor and Laurus (the "Securities Purchase Agreement") and/or (ii) each Related Agreement referred to in the Securities Purchase Agreement (the Securities Purchase Agreement and each Related Agreement, as each may be amended, modified, restated or supplemented from time to time, are collectively referred to herein as the "Documents"), or any documents, instruments or agreements relating to or executed in connection with the Documents or any documents, instruments or agreements referred to therein or otherwise, or any other indebtedness, obligations or liabilities of the Debtor to Laurus, whether now existing or hereafter arising, direct or indirect, liquidated or unliquidated, absolute or contingent, due or not due and whether under, pursuant to or evidenced by a note, agreement, guaranty, instrument or otherwise (all of which are herein collectively referred to as the "Obligations"), and irrespective of the genuineness, validity, regularity or enforceability of such Obligations, or of any instrument evidencing any of the Obligations or of any collateral therefor or of the existence or extent of such collateral, and irrespective of the allowability, allowance or disallowance of any or all of the Obligations in any case commenced by or against Debtor under Title 11, United States Code, including, without limitation, obligations or indebtedness of Debtor for post-petition interest, fees, costs and charges that would have accrued or been added to the Obligations but for the commencement of such case, irrespective of the allowability, allowance or disallowance of such post-petition interest, fees, costs and charges. Terms not otherwise defined herein shall have the meaning assigned such terms in the Securities Purchase Agreement. In furtherance of the foregoing, the undersigned hereby agrees as follows: 87. No Impairment. Laurus may at any time and from time to time, either before or after the maturity thereof, without notice to or further consent of the undersigned, extend the time of payment of, exchange or surrender any collateral for, renew or extend any of the Obligations or increase or decrease the interest rate thereon, or any other agreement with Debtor or with any other party to or person liable on any of the Obligations, or interested therein, for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of any agreement between Laurus and Debtor or any such other party or person, or make any election of rights Laurus may deem desirable under the United States Bankruptcy Code, as amended, or any other federal or state bankruptcy, reorganization, moratorium or insolvency law relating to or affecting the enforcement of creditors' rights generally (any of the foregoing, an "Insolvency Law") without in any way impairing or affecting this Guaranty. This instrument shall be effective regardless of the subsequent incorporation, merger or consolidation of Debtor, or any change in the composition, nature, personnel or location of Debtor and shall extend to any successor entity to Debtor including a debtor in possession or the like under any Insolvency Law. 88. Guaranty Absolute. Subject to Section 5(c), each of the undersigned jointly and severally guarantees that the Obligations will be paid strictly in accordance with the terms of the Documents and/or any other document, instrument or agreement creating or evidencing the Obligations, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of Debtor with respect thereto. Guarantors hereby knowingly accept the full range of risk encompassed within a contract of "continuing guaranty" which risk includes the possibility that Debtor will contract additional indebtedness for which Guarantors may be liable hereunder after Debtor's financial condition or ability to pay its lawful debts when they fall due has deteriorated, whether or not Debtor has properly authorized incurring such additional indebtedness. The undersigned acknowledge that (i) no oral representations, including any representations to extend credit or provide other financial accommodations to Debtor, have been made by Laurus to induce the undersigned to enter into this Guaranty and (ii) any extension of credit to the Debtor shall be governed solely by the provisions of the Documents. The liability of each of the undersigned under this Guaranty shall be absolute and unconditional, in accordance with its terms, and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including, without limitation: (a) any waiver, indulgence, renewal, extension, amendment or modification of or addition, consent or supplement to or deletion from or any other action or inaction under or in respect of the Documents or any other instruments or agreements relating to the Obligations or any assignment or transfer of any thereof, (b) any lack of validity or enforceability of any Document or other documents, instruments or agreements relating to the Obligations or any assignment or transfer of any thereof, (c) any furnishing of any additional security to Laurus or its assignees or any acceptance thereof or any release of any security by Laurus or its assignees, (d) any limitation on any party's liability or obligation under the Documents or any other documents, instruments or agreements relating to the Obligations or any assignment or transfer of any thereof or any invalidity or unenforceability, in whole or in part, of any such document, instrument or agreement or any term thereof, (e) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to Debtor, or any action taken with respect to this Guaranty by any trustee or receiver, or by any court, in any such proceeding, whether or not the undersigned shall have notice or knowledge of any of the foregoing, (f) any exchange, release or nonperfection of any collateral, or any release, or amendment or waiver of or consent to departure from any guaranty or security, for all or any of the Obligations or (g) any other circumstance which might otherwise constitute a defense available to, or a discharge of, the undersigned. Any amounts due from the undersigned to Laurus shall bear interest until such amounts are paid in full at the highest rate then applicable to the Obligations. Obligations include post-petition interest whether or not allowed or allowable. 89. Waivers. 89.1 This Guaranty is a guaranty of payment and not of collection. Laurus shall be under no obligation to institute suit, exercise rights or remedies or take any other action against Debtor or any other person liable with respect to any of the Obligations or resort to any collateral security held by it to secure any of the Obligations as a condition precedent to the undersigned being obligated to perform as agreed herein and each of the Guarantors hereby waives any and all rights which it may have by statute or otherwise which would require Laurus to do any of the foregoing. Each of the Guarantors further consents and agrees that Laurus shall be under no obligation to marshal any assets in favor of Guarantors, or against or in payment of any or all of the Obligations. The undersigned hereby waives all suretyship defenses and any rights to interpose any defense, counterclaim or offset of any nature and description which the undersigned may have or which may exist between and among Laurus, Debtor and/or the undersigned with respect to the undersigned's obligations under this Guaranty, or which Debtor may assert on the underlying debt, including but not limited to failure of consideration, breach of warranty, fraud, payment (other than cash payment in full of the Obligations), statute of frauds, bankruptcy, infancy, statute of limitations, accord and satisfaction, and usury. 89.2 Each of the undersigned further waives (i) notice of the acceptance of this Guaranty, of the making of any such loans or extensions of credit, and of all notices and demands of any kind to which the undersigned may be entitled, including, without limitation, notice of adverse change in Debtor's financial condition or of any other fact which might materially increase the risk of the undersigned and (ii) presentment to or demand of payment from anyone whomsoever liable upon any of the Obligations, protest, notices of presentment, non-payment or protest and notice of any sale of collateral security or any default of any sort. 89.3 Notwithstanding any payment or payments made by the undersigned hereunder, or any setoff or application of funds of the undersigned by Laurus, the undersigned shall not be entitled to be subrogated to any of the rights of Laurus against Debtor or against any collateral or guarantee or right of offset held by Laurus for the payment of the Obligations, nor shall the undersigned seek or be entitled to seek any contribution or reimbursement from Debtor in respect of payments made by the undersigned hereunder, until all amounts owing to Laurus by Debtor on account of the Obligations are paid in full and Laurus' obligation to extend credit pursuant to the Documents have been terminated. If, notwithstanding the foregoing, any amount shall be paid to the undersigned on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full and Laurus' obligation to extend credit pursuant to the Documents shall not have been terminated, such amount shall be held by the undersigned in trust for Laurus, segregated from other funds of the undersigned, and shall forthwith upon, and in any event within two (2) business days of, receipt by the undersigned, be turned over to Laurus in the exact form received by the undersigned (duly endorsed by the undersigned to Laurus, if required), to be applied against the Obligations, whether matured or unmatured, in such order as Laurus may determine, subject to the provisions of the Documents. Any and all present and future debts and obligations of Debtor to any of the undersigned are hereby waived and postponed in favor of, and subordinated to the full payment and performance of, all present and future debts and Obligations of Debtor to Laurus. 90. Security. All sums at any time to the credit of the undersigned and any property of the undersigned in Laurus' possession or in the possession of any bank, financial institution or other entity that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, Laurus (each such entity, an "Affiliate") shall be deemed held by Laurus or such Affiliate, as the case may be, as security for any and all of the undersigned's obligations to Laurus and to any Affiliate of Laurus, no matter how or when arising and whether under this or any other instrument, agreement or otherwise. 91. Representations and Warranties. Each of the undersigned respectively, hereby jointly and severally represents and warrants (all of which representations and warranties shall survive until all Obligations are indefeasibly satisfied in full and the Documents have been irrevocably terminated), that: 91.1 Corporate Status. It is a corporation, partnership or limited liability company, as the case may be, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization indicated on the signature page hereof and has full power, authority and legal right to own its property and assets and to transact the business in which it is engaged. 91.2 Authority and Execution. It has full power, authority and legal right to execute and deliver, and to perform its obligations under, this Guaranty and has taken all necessary corporate, partnership or limited liability company, as the case may be, action to authorize the execution, delivery and performance of this Guaranty. 91.3 Legal, Valid and Binding Character. This Guaranty constitutes its legal, valid and binding obligation enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the enforcement of creditor's rights and general principles of equity that restrict the availability of equitable or legal remedies. 91.4 Violations. The execution, delivery and performance of this Guaranty will not violate any requirement of law applicable to it or any contract, agreement or instrument to it is a party or by which it or any of its property is bound or result in the creation or imposition of any mortgage, lien or other encumbrance other than to Laurus on any of its property or assets pursuant to the provisions of any of the foregoing, which, in any of the foregoing cases, could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. 91.5 Consents or Approvals. No consent of any other person or entity (including, without limitation, any creditor of the undersigned) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required in connection with the execution, delivery, performance, validity or enforceability of this Guaranty by it, except to the extent that the failure to obtain any of the foregoing could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. 91.6 Litigation. No litigation, arbitration, investigation or administrative proceeding of or before any court, arbitrator or governmental authority, bureau or agency is currently pending or, to the best of its knowledge, threatened (i) with respect to this Guaranty or any of the transactions contemplated by this Guaranty or (ii) against or affecting it, or any of its property or assets, which, in each of the foregoing cases, if adversely determined, could reasonably be expected to have a Material Adverse Effect. 91.7 Financial Benefit. It has derived or expects to derive a financial or other advantage from each and every loan, advance or extension of credit made under the Documents or other Obligation incurred by the Debtor to Laurus. 92. Acceleration. 92.1 If any breach of any covenant or condition or other event of default shall occur and be continuing under any agreement made by Debtor or any of the undersigned to Laurus, or either Debtor or any of the undersigned should at any time become insolvent, or make a general assignment, or if a proceeding in or under any Insolvency Law shall be filed or commenced by, or in respect of, any of the undersigned, or if a notice of any lien, levy, or assessment is filed of record with respect to any assets of any of the undersigned by the United States of America or any department, agency, or instrumentality thereof, or if any taxes or debts owing at any time or times hereafter to any one of them becomes a lien or encumbrance upon any assets of the undersigned in Laurus' possession, or otherwise, any and all Obligations shall for purposes hereof, at Laurus' option, be deemed due and payable without notice notwithstanding that any such Obligation is not then due and payable by Debtor. 92.2 Each of the undersigned will promptly notify Laurus of any default by such undersigned in its respective performance or observance of any term or condition of any agreement to which the undersigned is a party if the effect of such default is to cause, or permit the holder of any obligation under such agreement to cause, such obligation to become due prior to its stated maturity and, if such an event occurs, Laurus shall have the right to accelerate such undersigned's obligations hereunder. 93. Payments from Guarantors. Laurus, in its sole and absolute discretion, with or without notice to the undersigned, may apply on account of the Obligations any payment from the undersigned or any other guarantors, or amounts realized from any security for the Obligations, or may deposit any and all such amounts realized in a non-interest bearing cash collateral deposit account to be maintained as security for the Obligations. 94. Costs. The undersigned shall pay on demand, all costs, fees and expenses (including expenses for legal services of every kind) relating or incidental to the enforcement or protection of the rights of Laurus hereunder or under any of the Obligations. 95. No Termination. This is a continuing irrevocable guaranty and shall remain in full force and effect and be binding upon the undersigned, and each of the undersigned's successors and assigns, until all of the Obligations have been paid in full and Laurus' obligation to extend credit pursuant to the Documents has been irrevocably terminated. If any of the present or future Obligations are guarantied by persons, partnerships or corporations in addition to the undersigned, the death, release or discharge in whole or in part or the bankruptcy, merger, consolidation, incorporation, liquidation or dissolution of one or more of them shall not discharge or affect the liabilities of any undersigned under this Guaranty. 96. Recapture. Anything in this Guaranty to the contrary notwithstanding, if Laurus receives any payment or payments on account of the liabilities guaranteed hereby, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver, or any other party under any Insolvency Law, common law or equitable doctrine, then to the extent of any sum not finally retained by Laurus, the undersigned's obligations to Laurus shall be reinstated and this Guaranty shall remain in full force and effect (or be reinstated) until payment shall have been made to Laurus, which payment shall be due on demand. 97. Books and Records. The books and records of Laurus showing the account between Laurus and Debtor shall be admissible in evidence in any action or proceeding, shall be binding upon the undersigned for the purpose of establishing the items therein set forth and shall constitute prima facie proof thereof. 98. No Waiver. No failure on the part of Laurus to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Laurus of any right, remedy or power hereunder preclude any other or future exercise of any other legal right, remedy or power. Each and every right, remedy and power hereby granted to Laurus or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by Laurus at any time and from time to time. 99. Waiver of Jury Trial. EACH OF THE UNDERSIGNED DOES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR WITH RESPECT TO THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR RELATING OR INCIDENTAL HERETO. THE UNDERSIGNED DOES HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF LAURUS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LAURUS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. 100. Governing Law; Jurisdiction; Amendments. THIS INSTRUMENT CANNOT BE CHANGED OR TERMINATED ORALLY, AND SHALL BE GOVERNED, CONSTRUED AND INTERPRETED AS TO VALIDITY, ENFORCEMENT AND IN ALL OTHER RESPECTS IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT HAVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS. EXCEPT AS SET FORTH BELOW IN THIS SECTION 14, ANY AND ALL DISPUTES, CONTROVERSIES AND CLAIMS THAT ANY GUARANTOR MAY ASSERT AGAINST LAURUS ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OTHER DOCUMENT SHALL BE DETERMINED EXCLUSIVELY BY ARBITRATION (EACH SUCH ARBITRATION, AN "ARBITRATION") IN NEW YORK CITY BEFORE A PANEL OF THREE NEUTRAL ARBITRATORS AGREED TO BY LAURUS AND THE DEBTOR (COLLECTIVELY, THE "ARBITRATORS") IN ACCORDANCE WITH AND PURSUANT TO THE THEN EXISTING COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT TO ASSERT SUCH CLAIMS IN ANY OTHER FORUM. THE ARBITRATORS SHALL HAVE THE POWER IN THEIR DISCRETION TO AWARD SPECIFIC PERFORMANCE OR INJUNCTIVE RELIEF (BUT SHALL NOT HAVE THE POWER TO RENDER ANY INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES) AND REASONABLE ATTORNEYS' FEES AND EXPENSES TO ANY PARTY IN ANY ARBITRATION. THE ARBITRATORS MAY NOT CHANGE, MODIFY OR ALTER ANY EXPRESS CONDITION, TERM OR PROVISION OF THIS GUARANTY OR OF ANY OTHER DOCUMENT NOR SHALL THEY HAVE THE POWER TO RENDER ANY AWARD AGAINST LAURUS THAT WOULD HAVE SUCH EFFECT. EACH ARBITRATION AWARD SHALL BE FINAL AND BINDING UPON THE PARTIES SUBJECT THERETO AND JUDGMENT MAY BE ENTERED THEREON IN ANY COURT OF COMPETENT JURISDICTION. THE SERVICE OF ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN CONNECTION WITH AN ARBITRATION OR FOR THE ENFORCEMENT OF ANY ARBITRATION AWARD MAY BE MADE IN THE SAME MANNER AS COMMUNICATIONS MAY BE GIVEN UNDER SECTION 17 HEREOF. NOTWITHSTANDING THE FOREGOING, THE PROVISIONS OF THIS SECTION 14 NOR ANY OTHER PROVISION CONTAINED IN THIS GUARANTY OR IN ANY OTHER DOCUMENT SHALL LIMIT IN ANY MANNER WHATSOEVER LAURUS' RIGHT TO COMMENCE AN ACTION AGAINST OR IN CONNECTION WITH THE DEBTOR, ANY GUARANTOR OR THEIR RESPECTIVE PROPERTIES IN ANY COURT OF COMPETENT JURISDICTION OR OTHERWISE UTILIZE JUDICIAL PROCESS IN CONNECTION WITH OR ARISING OUT OF LAURUS' RIGHTS AND REMEDIES UNDER THIS GUARANTY AND/OR ANY OTHER DOCUMENT OR OTHERWISE (ANY SUCH ACTION, A "COURT ACTION"). COURT ACTIONS MAY BE BROUGHT BY LAURUS IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION AND EACH GUARANTOR IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH STATE AND FEDERAL COURTS AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE OF INCONVENIENT FORUM OR LACK OF PERSONAL JURISDICTION IN SUCH FORUM OR RIGHT OF REMOVAL OR RIGHT TO JURY TRIAL UNDER ANY APPLICABLE LAW OR DECISION OR OTHERWISE. SERVICE OF ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN CONNECTION WITH A COURT ACTION MAY BE MADE IN THE SAME MANNER AS COMMUNICATIONS MAY BE GIVEN UNDER SECTION 17. IN ADDITION, LAURUS MAY SERVE PROCESS IN ANY OTHER MANNER PERMITTED UNDER APPLICABLE LAW. 101. Severability. To the extent permitted by applicable law, any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 102. Amendments, Waivers. No amendment or waiver of any provision of this Guaranty nor consent to any departure by the undersigned therefrom shall in any event be effective unless the same shall be in writing executed by each of the undersigned directly affected by such amendment and/or waiver and Laurus. Notwithstanding anything to the contrary contained in this Guaranty, the terms and conditions of this Guaranty shall be subject in all respects to the terms and conditions of the Intercreditor Agreement. In the event that the terms and conditions of this Guaranty are in contravention of the terms and conditions of the Intercreditor Agreement, the terms and conditions of the Intercreditor Agreement shall prevail. 103. Notice. All notices, requests and demands to or upon the undersigned, shall be in writing and shall be deemed to have been duly given or made (a) when delivered, if by hand, (b) three (3) days after being sent, postage prepaid, if by registered or certified mail, (c) when confirmed electronically, if by facsimile, or (d) when delivered, if by a recognized overnight delivery service in each event, to the numbers and/or address set forth beneath the signature of the undersigned. 104. Successors. Laurus may, from time to time, without notice to the undersigned, sell, assign, transfer or otherwise dispose of all or any part of the Obligations and/or rights under this Guaranty. Without limiting the generality of the foregoing, Laurus may assign, or grant participations to, one or more banks, financial institutions or other entities all or any part of any of the Obligations. In each such event, Laurus, its Affiliates and each and every immediate and successive purchaser, assignee, transferee or holder of all or any part of the Obligations shall have the right to enforce this Guaranty, by legal action or otherwise, for its own benefit as fully as if such purchaser, assignee, transferee or holder were herein by name specifically given such right. Laurus shall have an unimpaired right to enforce this Guaranty for its benefit with respect to that portion of the Obligations which Laurus has not disposed of, sold, assigned, or otherwise transferred. Notwithstanding anything to the contrary contained in this Guaranty, the term "Laurus" as herein used shall include Laurus, individually, in its capacity as collateral agent pursuant to that certain Intercreditor Agreement, dated as of May 14, 2004, among Laurus, EPXR, and the bridge loan creditors party thereto, in its capacity as collateral agent pursuant to that certain Intercreditor Agreement, dated as the date hereof, among Laurus, EPXR, Voxx and [Laidlaw], any parent of Laurus', any of Laurus' subsidiaries and any co-subsidiaries of Laurus' parent, whether now existing or hereafter created or acquired, and all of the terms, conditions, promises, covenants, provisions and warranties of this Guaranty shall inure to the benefit of each of the foregoing, and shall bind the representatives, successors and assigns of each Guarantor. 105. Release. Nothing except cash payment in full of the Obligations shall release any of the undersigned from liability under this Guaranty. [REMAINDER OF THIS PAGE IS BLANK. SIGNATURE PAGE IMMEDIATELY FOLLOWS] IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned this 29th day of April, 2005. NOL GROUP, INC. By: /s/ Deborah Gambone --------------------------- Name: Deborah Gambone --------------------------- Title: Vice President --------------------------- Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 Telephone: 305-503-8600 Facsimile: 305-503-8610 State of Incorporation: Delaware NATIONAL ONLINE SERVICES, INC. By: /s/ Deborah Gambone --------------------------- Name: Deborah Gambone --------------------------- Title: Vice President --------------------------- Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 Telephone: 305-503-8600 Facsimile: 305-503-8610 State of Incorporation: Delaware LIBERTY ONLINE SERVICES, INC. By: /s/ Deborah Gambone --------------------------- Name: Deborah Gambone --------------------------- Title: Vice President --------------------------- Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 Telephone: 305-503-8600 Facsimile: 305-503-8610 State of Incorporation: Delaware AMERIPAGES, INC. By: /s/ Deborah Gambone --------------------------- Name: Deborah Gambone --------------------------- Title: Vice President --------------------------- Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 Telephone: 305-503-8600 Facsimile: 305-503-8610 State of Incorporation: Delaware B2B ADVANTAGE, INC. By: /s/ Deborah Gambone --------------------------- Name: Deborah Gambone --------------------------- Title: Vice President --------------------------- Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 Telephone: 305-503-8600 Facsimile: 305-503-8610 State of Incorporation: Delaware EPIXTAR INTERNATIONAL CONTACT CENTER GROUP, INC. By: /s/ Ilene Kaminsky --------------------------- Name: Ilene Kaminsky --------------------------- Title: CEO --------------------------- Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 Telephone: 305-503-8600 Facsimile: 305-503-8610 State of Incorporation: Delaware EPIXTAR CORP. By: /s/ Ilene Kaminsky Name: Ilene Kaminsky Title: CEO Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 Telephone: 305-503-8600 Facsimile: 305-503-8610 State of Incorporation: Florida VOXX CORPORATION By: /s/ Ilene Kaminsky --------------------------- Name: Ilene Kaminsky --------------------------- Title: CEO --------------------------- Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 Telephone: 305-503-8600 Facsimile: 305-503-8610 State of Incorporation: Florida EPIXTAR MARKETING CORP. By: /s/ Ilene Kaminsky --------------------------- Name: Ilene Kaminsky --------------------------- Title: CEO --------------------------- Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 Telephone: 305-503-8600 Facsimile: 305-503-8610 State of Incorporation: Florida EX-4.13.12 13 b406530ex4_13-12.txt EXHIBIT 4.13.12 EXHIBIT 4.13.12 FUNDS ESCROW AGREEMENT This Agreement (this "Agreement") is dated as of the 29th day of April, 2005 among Epixtar Corp., a Florida corporation (the "EPXR"), Voxx Corporation, a Florida corporation ("VOXX" and, together with EPXR, the "COMPANY")) Laurus Master Fund, Ltd. (the "PURCHASER"), and Loeb & Loeb LLP (the "ESCROW AGENT"): W I T N E S S E T H: - - - - - - - - - - WHEREAS, the Purchaser has advised the Escrow Agent that (a) the Company and the Purchaser have entered into a Securities Purchase Agreement (the "PURCHASE AGREEMENT") for the sale by the Company to the Purchaser of a secured convertible term note (the "TERM NOTE"), (b) Voxx has issued to the Purchaser an option to purchase common stock of Voxx (the "OPTION") in connection with the issuance of the Term Note, , (c) Voxx has issued to the Purchaser a warrant to purchase common stock of Voxx (the "WARRANT") in connection with the issuance of the Term Note, (d) EPXR and the Purchaser have entered into an EPXR Registration Rights Agreement covering the registration of EPXR's common stock underlying the Term Note (the "EPXR TERM NOTE REGISTRATION RIGHTS AGREEMENT") and (e) Voxx and the Purchaser have entered into a Voxx Registration Rights Agreement covering the registration of Voxx's common stock underlying the Term Note and the Option; WHEREAS, the Company and the Purchaser wish the Purchaser to deliver to the Escrow Agent copies of the Documents (as hereafter defined) and the Escrowed Payment (as hereafter defined) to be held and released by Escrow Agent in accordance with the terms and conditions of this Agreement; and WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant to the terms and conditions of this Agreement; NOW THEREFORE, the parties agree as follows: 106. INTERPRETATION 106.1 Definitions. Whenever used in this Agreement, the following terms shall have the meanings set forth below. (i) "Agreement" means this Agreement, as amended, modified and/or supplemented from time to time by written agreement among the parties hereto. (ii) "Closing Payment" means the closing payment to be paid to Laurus Capital Management, LLC, the fund manager, as set forth on Schedule A hereto. (iii) "Disbursement Letter" means that certain letter delivered to the Escrow Agent by each of the Purchaser and the Company setting forth wire instructions and amounts to be funded at the Closing. (iv) "Documents" means copies of the Disbursement Letter, the Purchase Agreement, the Term Note, the Option, the Warrant the EPXR Term Note Registration Rights Agreement and the Voxx Term Note Registration Rights Agreement. (v) "Escrowed Payment" means $5,500,000. 106.2 Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto with respect to the matters contained herein and supersedes all prior agreements, understandings, negotiations and discussions of the parties, whether oral or written. There are no warranties, representations and other agreements made by the parties in connection with the subject matter hereof except as specifically set forth in this Agreement. 106.3 Extended Meanings. In this Agreement words importing the singular number include the plural and vice versa; words importing the masculine gender include the feminine and neuter genders. The word "person" includes an individual, body corporate, partnership, trustee or trust or unincorporated association, executor, administrator or legal representative. 106.4 Waivers and Amendments. This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions hereof may be waived, in each case only by a written instrument signed by all parties hereto, or, in the case of a waiver, by the party waiving compliance. Except as expressly stated herein, no delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder preclude any other or future exercise of any other right, power or privilege hereunder. 106.5 Headings. The division of this Agreement into articles, sections, subsections and paragraphs and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. 106.6 Law Governing this Agreement; Consent to Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without regard to principles of conflicts of laws. With respect to any suit, action or proceeding relating to this Agreement or to the transactions contemplated hereby ("Proceedings"), each party hereto irrevocably submits to the exclusive jurisdiction of the courts of the County of New York, State of New York and the United States District court located in the county of New York in the State of New York. Each party hereto hereby irrevocably and unconditionally (a) waives trial by jury in any Proceeding relating to this Agreement and for any related counterclaim and (b) waives any objection which it may have at any time to the laying of venue of any Proceeding brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have jurisdiction over such party. As between the Company and the Purchaser, the prevailing party shall be entitled to recover from the other party its reasonable attorneys' fees and costs. In the event that any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, then the remainder of this Agreement shall not be affected and shall remain in full force and effect. 106.7 Construction. Each party acknowledges that its legal counsel participated in the preparation of this Agreement 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 Agreement to favor any party against the other. 107. APPOINTMENT OF AND DELIVERIES TO THE ESCROW AGENT 107.1 Appointment. The Company and the Purchaser hereby irrevocably designate and appoint the Escrow Agent as their escrow agent for the purposes set forth herein, and the Escrow Agent by its execution and delivery of this Agreement hereby accepts such appointment under the terms and conditions set forth herein. 107.2 Copies of Documents to Escrow Agent. On or about the date hereof, the Purchaser shall deliver to the Escrow Agent copies of the Documents executed by the Company to the extent it is a party thereto. 107.3 Delivery of Escrowed Payment to Escrow Agent. On or about the date hereof, the Purchaser shall deliver to the Escrow Agent the Escrowed Payment. 107.4 Intention to Create Escrow Over the Escrowed Payment. The Purchaser and the Company intend that the Escrowed Payment shall be held in escrow by the Escrow Agent and released from escrow by the Escrow Agent only in accordance with the terms and conditions of this Agreement. 108. RELEASE OF ESCROW 108.1 Release of Escrow. Subject to the provisions of Section 4.2, the Escrow Agent shall release the Escrowed Payment from escrow as follows: (i) Promptly following receipt by the Escrow Agent of (i) copies of the fully executed Documents and this Agreement, (ii) the Escrowed Payment in immediately available funds, (iii) joint written instructions ("JOINT INSTRUCTIONS") executed by the Company and the Purchaser setting forth the payment direction instructions with respect to the Escrowed Payment and (iv) Escrow Agent's verbal instructions from David Grin and/or Eugene Grin (each of whom is a director of the Purchaser) indicating that all closing conditions relating to the Documents have been satisfied and directing that the Escrowed Payment be disbursed by the Escrow Agent in accordance with the Joint Instructions, then the Escrowed Payment shall be deemed released from escrow and shall be promptly disbursed in accordance with the Joint Instructions. The Joint Instructions shall include, without limitation, Escrow Agent's authorization to retain from the Escrowed Payment Escrow Agent's fee for acting as Escrow Agent hereunder and the Closing Payment for delivery to Laurus Capital Management, LLC in accordance with the Joint Instructions. (i) Upon receipt by the Escrow Agent of a final and non-appealable judgment, order, decree or award of a court of competent jurisdiction (a "COURT ORDER") relating to the Escrowed Payment, the Escrow Agent shall remit the Escrowed Payment in accordance with the Court Order. Any Court Order shall be accompanied by an opinion of counsel for the party presenting the Court Order to the Escrow Agent (which opinion shall be satisfactory to the Escrow Agent) to the effect that the court issuing the Court Order is a court of competent jurisdiction and that the Court Order is final and non-appealable. 11.2 Acknowledgement of Company and Purchaser; Disputes. The Company and the Purchaser acknowledge that the only terms and conditions upon which the Escrowed Payment are to be released from escrow are as set forth in Sections 3 and 4 of this Agreement. The Company and the Purchaser reaffirm their agreement to abide by the terms and conditions of this Agreement with respect to the release of the Escrowed Payment. Any dispute with respect to the release of the Escrowed Payment shall be resolved pursuant to Section 4.2 or by written agreement between the Company and Purchaser. 12. CONCERNING THE ESCROW AGENT 12.1 Duties and Responsibilities of the Escrow Agent. The Escrow Agent's duties and responsibilities shall be subject to the following terms and conditions: (i) The Purchaser and the Company acknowledge and agree that the Escrow Agent (i) shall not be required to inquire into whether the Purchaser, the Company or any other party is entitled to receipt of any Document or all or any portion of the Escrowed Payment; (ii) shall not be called upon to construe or review any Document or any other document, instrument or agreement entered into in connection therewith; (iii) shall be obligated only for the performance of such duties as are specifically assumed by the Escrow Agent pursuant to this Agreement; (iv) may rely on and shall be protected in acting or refraining from acting upon any written notice, instruction, instrument, statement, request or document furnished to it hereunder and believed by the Escrow Agent in good faith to be genuine and to have been signed or presented by the proper person or party, without being required to determine the authenticity or correctness of any fact stated therein or the propriety or validity or the service thereof; (v) may assume that any person purporting to give notice or make any statement or execute any document in connection with the provisions hereof has been duly authorized to do so; (vi) shall not be responsible for the identity, authority or rights of any person, firm or company executing or delivering or purporting to execute or deliver this Agreement or any Document or any funds deposited hereunder or any endorsement thereon or assignment thereof; (vii) shall not be under any duty to give the property held by Escrow Agent hereunder any greater degree of care than Escrow Agent gives its own similar property; and (viii) may consult counsel satisfactory to Escrow Agent (including, without limitation, Loeb & Loeb, LLP or such other counsel of Escrow Agent's choosing), the opinion of such counsel to be full and complete authorization and protection in respect of any action taken, suffered or omitted by Escrow Agent hereunder in good faith and in accordance with the opinion of such counsel. (i) The Purchaser and the Company acknowledge that the Escrow Agent is acting solely as a stakeholder at their request and that the Escrow Agent shall not be liable for any action taken by Escrow Agent in good faith and believed by Escrow Agent to be authorized or within the rights or powers conferred upon Escrow Agent by this Agreement. The Purchaser and the Company hereby, jointly and severally, indemnify and hold harmless the Escrow Agent and any of Escrow Agent's partners, employees, agents and representatives from and against any and all actions taken or omitted to be taken by Escrow Agent or any of them hereunder and any and all claims, losses, liabilities, costs, damages and expenses suffered and/or incurred by the Escrow Agent arising in any manner whatsoever out of the transactions contemplated by this Agreement and/or any transaction related in any way hereto, including the fees of outside counsel and other costs and expenses of defending itself against any claims, losses, liabilities, costs, damages and expenses arising in any manner whatsoever out the transactions contemplated by this Agreement and/or any transaction related in any way hereto, except for such claims, losses, liabilities, costs, damages and expenses incurred by reason of the Escrow Agent's gross negligence or willful misconduct. The Escrow Agent shall owe a duty only to the Purchaser and Company under this Agreement and to no other person. (ii) The Purchaser and the Company shall jointly and severally reimburse the Escrow Agent for its reasonable out-of-pocket expenses (including counsel fees (which counsel may be Loeb & Loeb LLP or such other counsel of the Escrow Agent's choosing) incurred in connection with the performance of its duties and responsibilities hereunder, which shall not (subject to Section 4.1(b)) exceed $2,000. (iii) The Escrow Agent may at any time resign as Escrow Agent hereunder by giving five (5) business days prior written notice of resignation to the Purchaser and the Company. Prior to the effective date of resignation as specified in such notice, the Purchaser and Company will issue to the Escrow Agent a Joint Instruction authorizing delivery of the Documents and the Escrowed Payment to a substitute Escrow Agent selected by the Purchaser and the Company. If no successor Escrow Agent is named by the Purchaser and the Company, the Escrow Agent may apply to a court of competent jurisdiction in the State of New York for appointment of a successor Escrow Agent, and deposit the Documents and the Escrowed Payment with the clerk of any such court and/or otherwise commence an interpleader or similar action for a determination of where to deposit the same. (iv) The Escrow Agent does not have and will not have any interest in the Documents and the Escrowed Payment, but is serving only as escrow agent, having only possession thereof. (v) The Escrow Agent shall not be liable for any action taken or omitted by it in good faith and reasonably believed by it to be authorized hereby or within the rights or powers conferred upon it hereunder, nor for action taken or omitted by it in good faith, and in accordance with advice of counsel (which counsel may be Loeb & Loeb, LLP or such other counsel of the Escrow Agent's choosing), and shall not be liable for any mistake of fact or error of judgment or for any acts or omissions of any kind except to the extent any such liability arose from its own willful misconduct or gross negligence. (vi) This Agreement sets forth exclusively the duties of the Escrow Agent with respect to any and all matters pertinent thereto and no implied duties or obligations shall be read into this Agreement. (vii) The Escrow Agent shall be permitted to act as counsel for the Purchaser or the Company, as the case may be, in any dispute as to the disposition of the Documents and the Escrowed Payment, in any other dispute between the Purchaser and the Company, whether or not the Escrow Agent is then holding the Documents and/or the Escrowed Payment and continues to act as the Escrow Agent hereunder. (viii) The provisions of this Section 4.1 shall survive the resignation of the Escrow Agent or the termination of this Agreement. 11.14 Dispute Resolution; Judgments. Resolution of disputes arising under this Agreement shall be subject to the following terms and conditions: (i) If any dispute shall arise with respect to the delivery, ownership, right of possession or disposition of the Documents and/or the Escrowed Payment, or if the Escrow Agent shall in good faith be uncertain as to its duties or rights hereunder, the Escrow Agent shall be authorized, without liability to anyone, to (i) refrain from taking any action other than to continue to hold the Documents and the Escrowed Payment pending receipt of a Joint Instruction from the Purchaser and Company, (ii) commence an interpleader or similar action, suit or proceeding for the resolution of any such dispute; and/or (iii) deposit the Documents and the Escrowed Payment with any court of competent jurisdiction in the State of New York, in which event the Escrow Agent shall give written notice thereof to the Purchaser and the Company and shall thereupon be relieved and discharged from all further obligations pursuant to this Agreement. The Escrow Agent may, but shall be under no duty to, institute or defend any legal proceedings which relate to the Documents and the Escrowed Payment. The Escrow Agent shall have the right to retain counsel if it becomes involved in any disagreement, dispute or litigation on account of this Agreement or otherwise determines that it is necessary to consult counsel which such counsel may be Loeb & Loeb LLP or such other counsel of the Escrow Agent's choosing. (ii) The Escrow Agent is hereby expressly authorized to comply with and obey any Court Order. In case the Escrow Agent obeys or complies with a Court Order, the Escrow Agent shall not be liable to the Purchaser and Company or to any other person, firm, company or entity by reason of such compliance. 12. GENERAL MATTERS 12.1 Termination. This escrow shall terminate upon disbursement of the Escrowed Payment in accordance with the terms of this Agreement or earlier upon the agreement in writing of the Purchaser and Company or resignation of the Escrow Agent in accordance with the terms hereof. 12.2 Notices. All notices, requests, demands and other communications required or permitted hereunder shall be in writing and shall be deemed to have been duly given one (1) day after being sent by telecopy (with copy delivered by overnight courier, regular or certified mail): If to the Company, to: Epixtar Corp. Voxx Corporation 11900 Biscayne Boulevard, Suite 700 Miami, Florida 33181 Attention: Corporate Secretary Facsimile: 305-503-8610 with a copy to: MICHAEL DIGIOVANNA, ESQ. 212 CARNEGIE CENTER SUITE 206 Princeton, New Jersey 08540 Facsimile: 609-452-9473 (b) If to the Purchaser, to: LAURUS MASTER FUND, LTD. M&C Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080 (c) If to the Escrow Agent, to: Loeb & Loeb LLP 345 Park Avenue New York, New York 10154 Fax: (212) 407-4990 Attention: Scott J. Giordano, Esq. or to such other address as any of them shall give to the others by notice made pursuant to this Section 5.2. 12.3 Interest. The Escrowed Payment shall not be held in an interest bearing account nor will interest be payable in connection therewith. 12.4 Assignment; Binding Agreement. Neither this Agreement nor any right or obligation hereunder shall be assignable by any party without the prior written consent of the other parties hereto. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective legal representatives, successors and assigns. 12.5 Invalidity. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal, or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be in any way impaired thereby, it being intended that all of the rights and privileges of the parties hereto shall be enforceable to the fullest extent permitted by law. 12.6 Counterparts/Execution. This Agreement may be executed in any number of counterparts and by different signatories hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same agreement. This Agreement may be executed by facsimile transmission. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first above written. COMPANY: EPIXTAR CORP. By:/s/ Ilene Kaminsky ------------------ Name: Ilene Kaminsky Title: CEO VOXX CORPORATION By: /s/Ilene Kaminsky ----------------- Name: Ilene Kaminsky Title: CEO PURCHASER: LAURUS MASTER FUND, LTD. By: /s/ Authorized Officer ---------------------- Name: Title: ESCROW AGENT: LOEB & LOEB LLP By: /s/ Authorized Officer ---------------------- Name: Title: SCHEDULE A TO FUNDS ESCROW AGREEMENT
- --------------------------------------------------------------- ------------------------------------------------------ PURCHASER PRINCIPAL NOTE AMOUNT - --------------------------------------------------------------- ------------------------------------------------------ LAURUS MASTER FUND, LTD., Term Note in an aggregate principal amount of M&C Corporate Services Limited, P.O. Box 309 GT, Ugland $5,500,000 House, South Church Street, George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080 - --------------------------------------------------------------- ------------------------------------------------------ TOTAL $5,500,000 - --------------------------------------------------------------- ------------------------------------------------------
- --------------------------------------------------------------- ------------------------------------------------------ FUND MANAGER CLOSING PAYMENT - --------------------------------------------------------------- ------------------------------------------------------ LAURUS CAPITAL MANAGEMENT, L.L.C. Closing payment payable in connection with investment by Laurus Master Fund, Ltd. for which 825 Third Avenue, 14th Floor Laurus Capital Management, L.L.C. is the Manager. New York, New York (10022) Fax: 212-541-4434 - --------------------------------------------------------------- ------------------------------------------------------ TOTAL $192,500 - --------------------------------------------------------------- ------------------------------------------------------
WARRANTS
- --------------------------------------------------------------- ------------------------------------------------------ WARRANT RECIPIENT WARRANT IN CONNECTION WITH OFFERING - --------------------------------------------------------------- ------------------------------------------------------ LAURUS MASTER FUND, LTD. Warrant exercisable into 229,187 shares of common stock of Voxx issuable in connection with the Term A Cayman Island corporation Note. M&C Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080 - --------------------------------------------------------------- ------------------------------------------------------ TOTAL WARRANT EXERCISABLE INTO 229,187 SHARES OF COMMON STOCK OF VOXX - --------------------------------------------------------------- ------------------------------------------------------
OPTION
- --------------------------------------------------------------- ------------------------------------------------------ OPTION RECIPIENT OPTION IN CONNECTION WITH OFFERING - --------------------------------------------------------------- ------------------------------------------------------ LAURUS MASTER FUND, LTD. Option exercisable into 2,435,714 shares of common stock of Voxx issuable in connection with the Term A Cayman Island corporation Note. M&C Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080 - --------------------------------------------------------------- ------------------------------------------------------ TOTAL OPTION EXERCISABLE INTO 3,274,093 SHARES OF COMMON STOCK OF VOXX - --------------------------------------------------------------- ------------------------------------------------------
EX-4.13.13 14 b406530ex4_13-13.txt EXHIBIT 4.13.13 EXHIBIT 4.13.13 EPIXTAR CORP. VOXX CORPORATION SECURITIES PURCHASE AGREEMENT APRIL 29, 2005 TABLE OF CONTENTS
PAGE 1. Agreement to Sell and Purchase...........................................................................2 2. Fees and Option..............................................................ERROR! BOOKMARK NOT DEFINED. 3. Closing, Delivery and Payment............................................................................3 3.1 Closing.......................................................................................3 3.2 Delivery......................................................................................3 4. Representations and Warranties of the Company............................................................3 4.1 Organization, Good Standing and Qualification.................................................3 4.2 Subsidiaries..................................................................................4 4.3 Capitalization; Voting Rights.................................................................4 4.4 Authorization; Binding Obligations............................................................5 4.5 Liabilities...................................................................................6 4.6 Agreements; Action............................................................................6 4.7 Obligations to Related Parties................................................................6 4.8 Changes.......................................................................................7 4.9 Title to Properties and Assets; Liens, Etc....................................................8 4.10 Intellectual Property.........................................................................9 4.11 Compliance with Other Instruments.............................................................9 4.12 Litigation...................................................................................10 4.13 Tax Returns and Payments.....................................................................10 4.14 Employees....................................................................................10 4.15 Registration Rights and Voting Rights........................................................11 4.16 Compliance with Laws; Permits................................................................11 4.17 Environmental and Safety Laws................................................................11 4.18 Valid Offering...............................................................................12 4.19 Full Disclosure..............................................................................12 4.20 Insurance....................................................................................12 4.21 SEC Reports..................................................................................12 4.22 Listing......................................................................................13 4.23 No Integrated Offering.......................................................................13 4.24 Stop Transfer................................................................................13 4.25 Dilution.....................................................................................13 4.26 Patriot Act..................................................................................12 5. Representations and Warranties of the Purchasers........................................................14 5.1 No Shorting..................................................................................14 5.2 Requisite Power and Authority................................................................14 5.3 Investment Representations...................................................................14 5.4 Purchasers Bears Economic Risk...............................................................15 5.5 Acquisition for Own Account..................................................................15 5.6 Purchasers Can Protect Its Interest..........................................................15 5.7 Accredited Investor..........................................................................15 5.8 Legends......................................................................................15
i 6. Covenants of the Company................................................................................17 6.1 Stop-Orders..................................................................................17 6.2 Listing......................................................................................17 6.3 Market Regulations...........................................................................17 6.4 Reporting Requirements.......................................................................18 6.5 Use of Funds.................................................................................18 6.6 Access to Facilities.........................................................................18 6.7 Taxes........................................................................................18 6.8 Insurance....................................................................................18 6.9 Intellectual Property........................................................................19 6.10 Properties...................................................................................19 6.11 Confidentiality..............................................................................20 6.12 Required Approvals...........................................................................20 6.13 Reissuance of Securities.....................................................................22 6.14 Opinion......................................................................................22 6.15 Margin Stock.................................................................................19 7. Covenants of the Purchasers.............................................................................24 7.1 Confidentiality..............................................................................24 7.2 Non-Public Information.......................................................................24 8. Covenants of the Company and Purchasers Regarding Indemnification.......................................24 8.1 Company Indemnification......................................................................24 8.2 Purchasers's Indemnification.................................................................25 9. Conversion of Convertible Note..........................................................................25 9.1 Mechanics of Conversion......................................................................25 10. Registration Rights.....................................................................................26 10.1 Registration Rights Granted..................................................................26 10.2 Offering Restrictions........................................................................27 11. Miscellaneous...........................................................................................27 11.1 Governing Law................................................................................27 11.2 Survival.....................................................................................28 11.3 Successors...................................................................................28 11.4 Entire Agreement.............................................................................28 11.5 Severability.................................................................................29 11.6 Amendment and Waiver.........................................................................29 11.7 Delays or Omissions..........................................................................29 11.8 Notices......................................................................................29 11.9 Attorneys' Fees..............................................................................30 11.10 Titles and Subtitles.........................................................................30 11.11 Facsimile Signatures; Counterparts...........................................................30 11.12 Broker's Fees................................................................................30 11.13 Construction.................................................................................31
ii
LIST OF EXHIBITS - ---------------------------------------------------------------------------------------------------------------------- Sands Creditor Parties.............................................................................. Exhibit A Laidlaw Warrantholder Designees..................................................................... Exhibit B-1 Sands Creditor Option Owner Designees Exhibit B-2 Form of Note........................................................................................ Exhibit C Form of Option...................................................................................... Exhibit D-1 Form of Warrant................................................................................. Exhibit D-2 Form of Opinion................................................................................. Exhibit E
iii SECURITIES PURCHASE AGREEMENT THIS SECURITIES PURCHASE AGREEMENT (this "Agreement") is made and entered into as of April 29, 2005 by and among EPIXTAR CORP., a Florida corporation ("EPXR"), VOXX CORPORATION, a Florida corporation ("VOXX") (EPXR and VOXX, collectively, the "Company"), and the Sands Creditor parties identified in Exhibit A attached hereto (collectively, the "Purchasers"). RECITALS WHEREAS, the Company has authorized the sale to the Purchasers of a Convertible Term Note in the aggregate principal amount of One Million Five Hundred Thousand Dollars ($1,500,000) (as amended, modified or supplemented from time to time, the "Note"), which Note is convertible into shares of either EPXR's common stock, $0.001 par value per share ("EPXR Common Stock") or VOXX's common stock, $0.001 par value per share ("VOXX Common Stock" and, together with the EPXR Common Stock, the "Common Stock"), at the fixed conversion price set forth in the Note ("Fixed Conversion Price"); WHEREAS, in connection with the transactions provided for herein the Company wishes to issue a warrant to Laidlaw & Company (UK) Ltd. ("Laidlaw") and its designees as set forth in Exhibit B (collectively, the "Warrant Holders") to purchase an aggregate of 327,409 shares of VOXX's Common Stock (subject to adjustment as set forth therein) (as amended, modified or supplemented from time to time, the "Warrant"); WHEREAS, the Company wishes to issue an option to the Purchasers to purchase an aggregate of 892,935 shares of VOXX's Common Stock (subject to adjustment as set forth therein) in connection with Purchaser's purchase of the Note (as amended, modified or supplemented from time to time, the "Option"); WHEREAS, Purchasers desires to purchase the Note and the Option and the Warrant Holders wish to be issued the Warrant on the terms and conditions set forth herein; and WHEREAS, the Company desires to issue and sell the Note, the Warrant and Option to Purchasers and the Warrant Holders on the terms and conditions set forth herein. AGREEMENT NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises, representations, warranties and covenants hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 111. Agreement to Sell and Purchase. Pursuant to the terms and conditions set forth in this Agreement, on the Closing Date (as defined in Section 3), the Company agrees to sell to the Purchasers, and the Purchasers hereby agrees to purchase from the Company, Notes in the aggregate principal amount of $1,500,000 convertible in accordance with the terms thereof into shares of the Company's Common Stock in accordance with the terms of the Note and this Agreement. The Note purchased on the Closing Date shall be known as the "Offering." A form of the Note is annexed hereto as Exhibit C and will be purchased by and in the amounts set forth in Exhibit A. The Note will mature on the Maturity Date (as defined in the Note). Collectively, the Note, the Option and the Common Stock issuable in payment of the Note and upon conversion of the Note and upon exercise of the Warrant and the Option are referred to as the "Securities." 112. Fees and Option. On the Closing Date: (a) VOXX will issue and deliver to the Purchasers an Option to purchase an aggregate of 892,935 shares of VOXX Common Stock pursuant to Section 1 hereof. The Option must be delivered on the Closing Date. A form of the Option is annexed hereto as Exhibit D-1 and will be owned by the Purchasers proportionately to their purchase of the Notes. All the representations, covenants, warranties, undertakings, and indemnification, and other rights made or granted to or for the benefit of the Purchasers by the Company are hereby also made and granted in respect of the Option and the shares of VOXX Common Stock issuable upon exercise of the Option (the "Option Shares"). (b) The Company will issue and deliver to the Warrant Holders a Warrant to purchase an aggregate of 327,409 shares of VOXX Common Stock pursuant to Section 1 hereof. The Warrant must be delivered on the Closing Date. A form of the Warrant is annexed hereto as Exhibit D-2 and will be owned in accordance with the designations set forth in Exhibit B. All the representations, covenants, warranties, undertakings, and indemnification, and other rights made or granted to or for the benefit of the Purchasers by the Company are hereby also made and granted in respect of the Warrant and the shares of the VOXX's Common Stock issuable upon exercise of the Warrant (the "Warrant Shares"). (c) The Company shall (i) pay to Laidlaw, for services rendered in connection with the related Laurus Master Fund, Ltd. investment in VOXX and related services associated with these transactions (the "Services"), a closing payment in an amount equal to $400,000. The foregoing fee is referred to herein as the "Closing Payment" and (ii) issue the above referenced Warrant to the Warrant Holders as additional compensation for such Services. (d) The Company shall reimburse Laidlaw for its reasonable expenses for services rendered to the Purchasers in preparation of this Agreement and the Related Agreements (as hereinafter defined), and expenses incurred in connection with the Purchasers's due diligence review of the Company and all related matters. Amounts required to be paid under this Section 2(d), to the extent not yet paid, shall be paid by the Company on the Closing Date. The total amount to be paid by the Company pursuant to this clause (c) shall be $25,000, such amount to be paid to Laidlaw, which has assisted the Purchasers in connection with the transactions provided for herein. 2 (e) The Closing Payment, the expenses referred to in clause (d) of this Section 2 (net of deposits previously paid by the Company) shall be paid at closing out of funds held pursuant to a Funds Escrow Agreement of even date herewith among the Company, Purchasers, Laidlaw and an Escrow Agent (the "Funds Escrow Agreement") and a disbursement letter (the "Disbursement Letter"). 113. Closing, Delivery and Payment; Certain Closing Conditions. 113.1 Closing. Subject to the terms and conditions herein, the closing of the transactions contemplated hereby (the "Closing"), shall take place on the date hereof, at such time or place as the Company and Purchasers may mutually agree (such date is hereinafter referred to as the "Closing Date"). 113.2 Delivery. Pursuant to the Funds Escrow Agreement in the form attached hereto as Exhibit E, at the Closing on the Closing Date, the Company will deliver among other things: (i) to the Purchasers,(x) Notes, each in the form attached as Exhibit A, representing the aggregate principal amount of $1,500,000, (y) the Option in the form attached as Exhibit D-1 in the Purchaser's names representing an aggregate amount of 892,935 Option Shares and (ii) to the Warrant Holders, a Warrant in form attached as Exhibit D-2 in the Warrant Holders' names representing an aggregate amount of 327,409 Warrant Shares. Simultaneously, on the Closing Date, the Purchasers will deliver to the Company, among other things, the amounts set forth in the Disbursement Letter by certified funds or wire transfer. 3.3 Laurus Documents. The Purchasers shall be satisfied with the terms and conditions of each Laurus Document (as defined in the Intercreditor Agreement (as defined below)) and all agreements related thereto. 114. Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchasers as follows (which representations and warranties are supplemented by the Company's filings under the Securities Exchange Act of 1934 (collectively, the "Exchange Act Filings"), copies of which have been provided to the Purchasers): 3 114.1 Organization, Good Standing and Qualification. Each of the Company and each of its Subsidiaries is a corporation, partnership or limited liability company, as the case may be, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Each of the Company and each of its Subsidiaries has the corporate power and authority to own and operate its properties and assets, to execute and deliver (i) this Agreement, (ii) the Note, the Warrant and the Option to be issued in connection with this Agreement, (iii) the Master Security Agreement dated as of the date hereof between the Company, certain Subsidiaries of the Company and the Purchasers (as amended, modified or supplemented from time to time, the "Master Security Agreement"), (iv) the EPXR Registration Rights Agreement relating to the Securities dated as of the date hereof between EPXR and the Purchasers, (v) the VOXX Registration Rights Agreement relating to the Securities dated as of the date hereof between VOXX and the Purchasers, (vi) the Guaranty dated as of the date hereof made by the Company and certain Subsidiaries of the Company (as amended, modified or supplemented from time to time, the "Guaranty"), (vii) the Stock Pledge Agreement dated as of the date hereof among the Company, certain Subsidiaries of the Company and the Purchasers (as amended, modified or supplemented from time to time, the "Stock Pledge Agreement"), (viii) the Escrow Agreement dated as of the date hereof among the Company, the Purchasers and the escrow agent referred to therein, (ix) the Intercreditor and Collateral Agency Agreement dated as of the date hereof between the Purchasers and Laurus, and acknowledged to by the Company (as amended, modified or supplemented from time to time, the "Intercreditor Agreement"), (x) the Foreign Documentation (as defined below) and (xi) all other agreements related to this Agreement and the Note and referred to herein (the preceding clauses (ii) through (xi), collectively, the "Related Agreements"), to issue and sell the Note and the shares of Common Stock issuable upon conversion of the Note (the "Note Shares"), to issue and sell the Option and the Option Shares, to issue and sell the Warrant and the Warrant Shares, and to carry out the provisions of this Agreement and the Related Agreements and to carry on its business as presently conducted. Each of the Company and each of its Subsidiaries is duly qualified and is authorized to do business and is in good standing as a foreign corporation, partnership or limited liability company, as the case may be, in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so has not, or could not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets, liabilities, condition (financial or otherwise), properties, operations or prospects of the Company and it Subsidiaries, taken individually and as a whole (a "Material Adverse Effect"). 114.2 Subsidiaries. Each direct and indirect Subsidiary of the Company, the direct owner of such Subsidiary and its percentage ownership thereof, is set forth on Schedule 4.2. No Immaterial Subsidiary owns any assets (other than immaterial assets) or has any significant operations. For the purpose of this Agreement, (x) a "Subsidiary" of any person or entity means (i) a corporation or other entity whose shares of stock or other ownership interests having ordinary voting power (other than stock or other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation, or other persons or entities performing similar functions for such person or entity, are owned, directly or indirectly, by such person or entity or (ii) a corporation or other entity in which such person or entity owns, directly or indirectly, more than 50% of the equity interests at such time and (y) the "Immaterial Subsidiaries" shall mean, collectively, Epixtar Communications Corp., a Florida corporation, Epixtar Prepaid Communications Corp., a Delaware corporation, Epixtar Solutions Corp., a Delaware corporation, IMS International, Inc., a Phillippines corporation, Epixtar International Contact Centers, Ltd., a Mauritius corporation, Epixtar Information Technology Private, Ltd., a Calcutta corporation, Epixtar International Contact Center Group, Ltd., a Bermuda corporation, and each Subsidiary of the Company that is not a Credit Party (as defined below) and does not own any assets (other than immaterial assets) or have any significant operations. 4 114.3 Capitalization; Voting Rights. (a) The authorized capital stock of EPXR, as of the date hereof consists of 60,000,000 shares, of which 50,000,000 are shares of EPXR Common Stock, par value $0.001 per share, 12,150,356 shares of which are issued and outstanding, and 10,000,000 are shares of preferred stock, par value $0.001 per share of which 16,500 shares of preferred stock are issued and outstanding. The authorized capital stock of VOXX, as of the date hereof consists of 50,250,000 shares, of which 50,000,000 are shares of VOXX Common Stock, par value $.001 per share, 6,900,000 shares of which are issued and outstanding, and 250,000 are shares of preferred stock, par value $.001 per share of which 0 shares of preferred stock are issued and outstanding. The authorized capital stock of each Subsidiary of EPXR (other than VOXX) is set forth on Schedule 4.3. (b) Except as disclosed on Schedule 4.3, other than: (i) the shares reserved for issuance under the Company's stock option plans; and (ii) shares which may be granted pursuant to this Agreement and the Related Agreements, there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or arrangements or agreements of any kind for the purchase or acquisition from the Company of any of its securities. Except as disclosed on Schedule 4.3, neither the offer, issuance or sale of any of the Note, the Warrant or the Option, or the issuance of any of the Note Shares, the Warrant Shares or Option Shares, nor the consummation of any transaction contemplated hereby will result in a change in the price or number of any securities of the Company outstanding, under anti-dilution or other similar provisions contained in or affecting any such securities. (c) All issued and outstanding shares of the Company's Common Stock: (i) have been duly authorized and validly issued and are fully paid and nonassessable; and (ii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities. (d) The rights, preferences, privileges and restrictions of the shares of the Common Stock are as stated in the Company's Certificate of Incorporation (the "Charter"). The Note Shares, the Warrant Shares and Option Shares have been duly and validly reserved for issuance. When issued in compliance with the provisions of this Agreement and the Company's Charter, the Securities will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances; provided, however, that the Securities may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed. 114.4 Authorization; Binding Obligations. All corporate, partnership or limited liability company, as the case may be, action on the part of the Company and each of its Subsidiaries (including the respective officers and directors) necessary for the authorization of this Agreement and the Related Agreements, the performance of all obligations of the Company and its Subsidiaries hereunder and under the other Related Agreements at the Closing and, the authorization, sale, issuance and delivery of the Note, the Warrant and the Option has been taken or will be taken prior to the Closing. This Agreement and the Related Agreements, when executed and delivered and to the extent it is a party thereto, will be valid and binding obligations of each of the Company and each of its Subsidiaries, enforceable against each such entity in accordance with their terms, except: 5 (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors' rights; and (b) general principles of equity that restrict the availability of equitable or legal remedies. The sale of the Note and the subsequent conversion of the Note into Note Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with. Neither the issuance of the Warrant nor the Option nor the subsequent exercise of the Warrant for Warrant Shares nor the subsequent exercise of the Option for Option Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with. 114.5 Liabilities. Neither the Company nor any of its Subsidiaries has any contingent liabilities, except current liabilities incurred in the ordinary course of business and liabilities disclosed in any Exchange Act Filings. 114.6 Agreements; Action. Except as set forth on Schedule 4.6 or as disclosed in any Exchange Act Filings: (a) there are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company or any of its Subsidiaries is a party or by which it is bound which may involve: (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of $50,000 (other than obligations of, or payments to, the Company arising from agreements entered into in the ordinary course of business); or (ii) the transfer or license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses arising from the purchase of "off the shelf" or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company's products or services; or (iv) indemnification by the Company with respect to infringements of proprietary rights. (b) Since December 31, 2004, neither the Company nor any of its Subsidiaries has: (i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $50,000 or, in the case of indebtedness and/or liabilities individually less than $50,000, in excess of $100,000 in the aggregate; (iii) made any loans or advances to any person not in excess, individually or in the aggregate, of $100,000, other than ordinary course advances for travel expenses; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business. 6 (c) For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections. 114.7 Obligations to Related Parties. Except as set forth on Schedule 4.7, there are no obligations of the Company or any of its Subsidiaries to officers, directors, stockholders or employees of the Company or any of its Subsidiaries other than: (a) for payment of salary for services rendered and for bonus payments; (b) reimbursement for reasonable expenses incurred on behalf of the Company and its Subsidiaries; (c) for other standard employee benefits made generally available to all employees (including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company); and (d) obligations listed in the Company's financial statements or disclosed in any of its Exchange Act Filings. Except as described above or set forth on Schedule 4.7, none of the officers, directors or, to the best of the Company's knowledge, key employees or stockholders of the Company or any members of their immediate families, are indebted to the Company, individually or in the aggregate, in excess of $50,000 or have any direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation which competes with the Company, other than passive investments in publicly traded companies (representing less than one percent (1%) of such company) which may compete with the Company. Except as described above, no officer, director or stockholder, or any member of their immediate families, is, directly or indirectly, interested in any material contract with the Company and no agreements, understandings or proposed transactions are contemplated between the Company and any such person. Except as set forth on Schedule 4.7, the Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation. 114.8 Changes. Since December 31, 2004, except as disclosed in any Exchange Act Filing or in any Schedule to this Agreement (including Schedule 4.8) or to any of the Related Agreements, there has not been: (a) any change in the business, assets, liabilities, condition (financial or otherwise), properties, operations or prospects of the Company or any of its Subsidiaries, which individually or in the aggregate has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; 7 (b) any resignation or termination of any officer, key employee or group of employees of the Company or any of its Subsidiaries; (c) any material change in the contingent obligations of the Company or any of its Subsidiaries by way of guaranty, endorsement, indemnity, warranty or otherwise; (d) any damage, destruction or loss, whether or not covered by insurance, has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; (e) any waiver by the Company or any of its Subsidiaries of a valuable right or of a material debt owed to it; (f) any direct or indirect loans made by the Company or any of its Subsidiaries to any stockholder, employee, officer or director of the Company or any of its Subsidiaries, other than advances made in the ordinary course of business; (g) any material change in any compensation arrangement or agreement with any employee, officer, director or stockholder of the Company or any of its Subsidiaries; (h) any declaration or payment of any dividend or other distribution of the assets of the Company or any of its Subsidiaries; (i) any labor organization activity related to the Company or any of its Subsidiaries; (j) any debt, obligation or liability incurred, assumed or guaranteed by the Company or any of its Subsidiaries, except those for immaterial amounts and for current liabilities incurred in the ordinary course of business; (k) any sale, assignment or transfer of any patents, trademarks, copyrights, trade secrets or other intangible assets owned by the Company or any of its Subsidiaries; (l) any change in any material agreement to which the Company or any of its Subsidiaries is a party or by which either the Company or any of its Subsidiaries is bound which either individually or in the aggregate has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; (m) any other event or condition of any character that, either individually or in the aggregate, has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; or (n) any arrangement or commitment by the Company or any of its Subsidiaries to do any of the acts described in subsection (a) through (m) above. 114.9 Title to Properties and Assets; Liens, Etc. Except as set forth on Schedule 4.9, each of the Company and each of its Subsidiaries has good and marketable title to its properties and assets, and good title to its leasehold estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than: 8 (a) those resulting from taxes which have not yet become delinquent; (b) minor liens and encumbrances which do not materially detract from the value of the property subject thereto or materially impair the operations of the Company or any of its Subsidiaries; and (c) those that have otherwise arisen in the ordinary course of business. All facilities, machinery, equipment, fixtures, vehicles and other properties owned, leased or used by the Company and its Subsidiaries are in good operating condition and repair and are reasonably fit and usable for the purposes for which they are being used. Except as set forth on Schedule 4.9, the Company and its Subsidiaries are in compliance with all material terms of each lease to which it is a party or is otherwise bound. 15.5 Intellectual Property. (a) Each of the Company and each of its Subsidiaries owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes necessary for its business as now conducted and to the Company's knowledge, as presently proposed to be conducted (the "Intellectual Property"), without any known infringement of the rights of others. There are no outstanding options, licenses or agreements of any kind relating to the foregoing proprietary rights, nor is the Company or any of its Subsidiaries bound by or a party to any options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes of any other person or entity other than such licenses or agreements arising from the purchase of "off the shelf" or standard products. (b) Neither the Company nor any of its Subsidiaries has received any communications alleging that the Company or any of its Subsidiaries has violated any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity, nor is the Company or any of its Subsidiaries aware of any basis therefor. (c) The Company does not believe it is or will be necessary to utilize any inventions, trade secrets or proprietary information of any of its employees made prior to their employment by the Company or any of its Subsidiaries, except for inventions, trade secrets or proprietary information that have been rightfully assigned to the Company or any of its Subsidiaries. 15.6 Compliance with Other Instruments. Neither the Company nor any of its Subsidiaries is in violation or default of (x) any term of its Certificate of Incorporation or Bylaws, (y) any term of the Laurus Documents (as defined in the Intercreditor Agreement) or (z) of any provision of any indebtedness, mortgage, indenture, contract, agreement or instrument to which it is party or by which it is bound or of any judgment, decree, order or writ, which violation or default, in the case of this clause (z), has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. The execution, delivery and performance of and compliance with this Agreement and the Related Agreements to which it is a party, and the issuance and sale of the Note by the Company and the other Securities by the Company each pursuant hereto and thereto, will not, with or without the passage of time or giving of notice, result in any such material violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or any of its Subsidiaries or the suspension, revocation, impairment, forfeiture or non-renewal of any permit, license, authorization or approval applicable to the Company, its business or operations or any of its assets or properties. 9 15.7 Litigation. Except as set forth on Schedule 4.12 hereto, there is no action, suit, proceeding or investigation pending or, to the Company's knowledge, currently threatened against the Company or any of its Subsidiaries that prevents the Company or any of its Subsidiaries from entering into this Agreement or the other Related Agreements, or from consummating the transactions contemplated hereby or thereby, or which has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect or any change in the current equity ownership of the Company or any of its Subsidiaries, nor is the Company aware that there is any basis to assert any of the foregoing. Neither the Company nor any of its Subsidiaries is a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no action, suit, proceeding or investigation by the Company or any of its Subsidiaries currently pending or which the Company or any of its Subsidiaries intends to initiate. 15.8 Tax Returns and Payments. Each of the Company and each of its Subsidiaries has timely filed all tax returns (federal, state and local) required to be filed by it. All taxes shown to be due and payable on such returns, any assessments imposed, and all other taxes due and payable by the Company or any of its Subsidiaries on or before the Closing, have been paid or will be paid prior to the time they become delinquent. Except as set forth on Schedule 4.13, neither the Company nor any of its Subsidiaries has been advised: (a) that any of its returns, federal, state or other, have been or are being audited as of the date hereof; or (b) of any deficiency in assessment or proposed judgment to its federal, state or other taxes. The Company has no knowledge of any liability of any tax to be imposed upon its properties or assets as of the date of this Agreement that is not adequately provided for. 10 15.9 Employees. Except as set forth on Schedule 4.14, neither the Company nor any of its Subsidiaries has any collective bargaining agreements with any of its employees. There is no labor union organizing activity pending or, to the Company's knowledge, threatened with respect to the Company or any of its Subsidiaries. Except as disclosed in the Exchange Act Filings or on Schedule 4.14, neither the Company nor any of its Subsidiaries is a party to or bound by any currently effective employment contract, deferred compensation arrangement, bonus plan, incentive plan, profit sharing plan, retirement agreement or other employee compensation plan or agreement. To the Company's knowledge, no employee of the Company or any of its Subsidiaries, nor any consultant with whom the Company or any of its Subsidiaries has contracted, is in violation of any term of any employment contract, proprietary information agreement or any other agreement relating to the right of any such individual to be employed by, or to contract with, the Company or any of its Subsidiaries because of the nature of the business to be conducted by the Company or any of its Subsidiaries; and to the Company's knowledge the continued employment by the Company or any of its Subsidiaries of its present employees, and the performance of the Company's and its Subsidiaries' contracts with its independent contractors, will not result in any such violation. Neither the Company nor any of its Subsidiaries is aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with their duties to the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries has received any notice alleging that any such violation has occurred. Except for employees who have a current effective employment agreement with the Company or any of its Subsidiaries, and the Company's CEO, no employee of the Company or any of its Subsidiaries has been granted the right to continued employment by the Company or any of its Subsidiaries or to any material compensation following termination of employment with the Company or any of its Subsidiaries. Except as set forth on Schedule 4.14, the Company is not aware that any officer, key employee or group of employees intends to terminate his, her or their employment with the Company or any of its Subsidiaries, nor does the Company or any of its Subsidiaries have a present intention to terminate the employment of any officer, key employee or group of employees. 15.10 Registration Rights and Voting Rights. Except as set forth on Schedule 4.15 and except as disclosed in Exchange Act Filings, neither the Company nor any of its Subsidiaries is presently under any obligation, and neither the Company nor any of its Subsidiaries has granted any rights, to register any of the Company's or its Subsidiaries' presently outstanding securities or any of its securities that may hereafter be issued. Except as set forth on Schedule 4.15 and except as disclosed in Exchange Act Filings, to the Company's knowledge, no stockholder of the Company or any of its Subsidiaries has entered into any agreement with respect to the voting of equity securities of the Company or any of its Subsidiaries. 15.11 Compliance with Laws; Permits. Neither the Company nor any of its Subsidiaries is in violation of any applicable statute, rule, regulation, order or restriction of any domestic or foreign government or any instrumentality or agency thereof in respect of the conduct of its business or the ownership of its properties which has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. No governmental orders, permissions, consents, approvals or authorizations are required to be obtained and no registrations or declarations are required to be filed in connection with the execution and delivery of this Agreement or any other Related Agreement and the issuance of any of the Securities, except such as has been duly and validly obtained or filed, or with respect to any filings that must be made after the Closing, as will be filed in a timely manner. Each of the Company and its Subsidiaries has all material franchises, permits, licenses and any similar authority necessary for the conduct of its business as now being conducted by it, the lack of which could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 11 15.12 Environmental and Safety Laws. Neither the Company nor any of its Subsidiaries is in violation of any applicable statute, law or regulation relating to the environment or occupational health and safety, and to its knowledge, no material expenditures are or will be required in order to comply with any such existing statute, law or regulation. Except as set forth on Schedule 4.17, no Hazardous Materials (as defined below) are used or have been used, stored, or disposed of by the Company or any of its Subsidiaries or, to the Company's knowledge, by any other person or entity on any property owned, leased or used by the Company or any of its Subsidiaries. For the purposes of the preceding sentence, "Hazardous Materials" shall mean: (a) materials which are listed or otherwise defined as "hazardous" or "toxic" under any applicable local, state, federal and/or foreign laws and regulations that govern the existence and/or remedy of contamination on property, the protection of the environment from contamination, the control of hazardous wastes, or other activities involving hazardous substances, including building materials; or (b) any petroleum products or nuclear materials. 15.13 Valid Offering. Assuming the accuracy of the representations and warranties of the Purchasers contained in this Agreement, the offer, sale and issuance of the Securities will be exempt from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), and will have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable state securities laws. 15.14 Full Disclosure. Each of the Company and each of its Subsidiaries has provided the Purchasers with all information requested by the Purchasers in connection with its decision to purchase the Note, the Warrant and the Option, including all information the Company and its Subsidiaries believe is reasonably necessary to make such investment decision. Neither this Agreement, the Related Agreements, the exhibits and schedules hereto and thereto nor any other document delivered by the Company or any of its Subsidiaries to Purchasers or its attorneys or agents in connection herewith or therewith or with the transactions contemplated hereby or thereby, contain any untrue statement of a material fact nor omit to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances in which they are made, not misleading. Any financial projections and other estimates provided to the Purchasers by the Company or any of its Subsidiaries were based on the Company's and its Subsidiaries' experience in the industry and on assumptions of fact and opinion as to future events which the Company or any of its Subsidiaries, at the date of the issuance of such projections or estimates, believed to be reasonable. 15.15 Insurance. Each of the Company and each of its Subsidiaries has general commercial, product liability, fire and casualty insurance policies with coverages which the Company believes are customary for companies similarly situated to the Company and its Subsidiaries in the same or similar business. 12 15.8 SEC Reports. Except as set forth on Schedule 4.21, the Company has filed all proxy statements, reports and other documents required to be filed by it under the Securities Exchange Act 1934, as amended (the "Exchange Act"). The Company has furnished the Purchasers with copies of: (i) its Annual Reports on Form 10-KSB for its fiscal year ended December 31, 2004, (ii) its Quarterly Report on Form 10-QSB for its fiscal quarter ended September 30, 2004 and (iii) the Form 8-K filings which it has made during the fiscal year 2005 to date (collectively, the "SEC Reports"). Except as set forth on Schedule 4.21, each SEC Report was, at the time of its filing, in substantial compliance with the requirements of its respective form and none of the SEC Reports, nor the financial statements (and the notes thereto) included in the SEC Reports, as of their respective filing dates, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 15.9 Listing. EPXR's Common Stock is listed for trading on the National Association of Securities Dealers Over the Counter Bulletin Board ("NASD OTCBB") and satisfies all requirements for the continuation of such trading. EPXR has not received any notice that EPXR's Common Stock will not be eligible to be traded on the NASD OTCBB or that EPXR's Common Stock does not meet all requirements for such trading. 15.10 No Integrated Offering. Neither the Company, nor any of its Subsidiaries or 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 this Agreement or any of the Related Agreements to be integrated with prior offerings by the Company (other than in connection with that certain offering made by the Company to Laurus Master Fund, Ltd. ("Laurus") pursuant to that certain Securities Purchase Agreement, dated as of the date hereof (as amended, modified or supplemented from time to time, the "Laurus Securities Purchase Agreement") and the Related Agreements referred to in the Laurus Securities Purchase Agreement) for purposes of the Securities Act which would prevent the Company from selling the Securities 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. 15.11 Stop Transfer. The Securities are restricted securities as of the date of this Agreement. Neither the Company nor any of its Subsidiaries will issue any stop transfer order or other order impeding the sale and delivery of any of the Securities at such time as the Securities are registered for public sale or an exemption from registration is available, except as required by state and federal securities laws. 15.12 Dilution. The Company specifically acknowledges that its obligation to issue the shares of Common Stock upon conversion of the Note and exercise of the Warrant and the Option 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. 13 4.26 Patriot Act. The Company certifies that, to the best of Company's knowledge, neither the Company nor any of its Subsidiaries has been designated, and is not owned or controlled, by a "suspected terrorist" as defined in Executive Order 13224. The Company hereby acknowledges that the Purchasers seek to comply with all applicable laws concerning money laundering and related activities. In furtherance of those efforts, the Company hereby represents, warrants and agrees that: (i) none of the cash or property that the Company or any of its Subsidiaries will pay or will contribute to the Purchasers has been or shall be derived from, or related to, any activity that is deemed criminal under United States law; and (ii) no contribution or payment by the Company or any of its Subsidiaries to the Purchasers, to the extent that they are within the Company's and/or its Subsidiaries' control shall cause the Purchasers to be in violation of the United States Bank Secrecy Act, the United States International Money Laundering Control Act of 1986 or the United States International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001. The Company shall promptly notify the Purchasers if any of these representations ceases to be true and accurate regarding the Company or any of its Subsidiaries. The Company agrees to provide the Purchasers any additional information regarding the Company or any of its Subsidiaries that the Purchasers deems necessary or convenient to ensure compliance with all applicable laws concerning money laundering and similar activities. The Company understands and agrees that if at any time it is discovered that any of the foregoing representations are incorrect, or if otherwise required by applicable law or regulation related to money laundering similar activities, the Purchasers may undertake appropriate actions to ensure compliance with applicable law or regulation, including but not limited to segregation and/or redemption of the Purchaser's investment in the Company. The Company further understands that the Purchasers may release confidential information about the Company and its Subsidiaries and, if applicable, any underlying beneficial owners, to proper authorities if the Purchasers, in its sole discretion, determines that it is in the best interests of the Purchasers in light of relevant rules and regulations under the laws set forth in subsection (ii) above. 16. Representations and Warranties of the Purchasers. The Purchasers hereby represents and warrants to the Company as follows (such representations and warranties do not lessen or obviate the representations and warranties of the Company set forth in this Agreement): 16.1 No Shorting. The Purchasers or any of its affiliates and investment partners has not, will not and will not cause any person or entity, directly or indirectly, to engage in "short sales" of the Company's Common Stock as long as the Note shall be outstanding. 16.2 Requisite Power and Authority. The Purchasers has all necessary power and authority under all applicable provisions of law to execute and deliver this Agreement and the Related Agreements and to carry out their provisions. All corporate action on Purchaser's part required for the lawful execution and delivery of this Agreement and the Related Agreements have been or will be effectively taken prior to the Closing. Upon their execution and delivery, this Agreement and the Related Agreements will be valid and binding obligations of Purchasers, enforceable in accordance with their terms, except: (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors' rights; and 14 (b) as limited by general principles of equity that restrict the availability of equitable and legal remedies. 15.21 Investment Representations. Purchasers understand that the Securities are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Purchaser's representations contained in the Agreement, including, without limitation, that the Purchasers are "accredited investors" within the meaning of Regulation D under the Securities Act of 1933, as amended (the "Securities Act"). The Purchasers confirm that it has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the Note, the Warrant and the Option to be purchased by it under this Agreement and the Note Shares, the Warrant Shares and the Option Shares acquired by it upon the conversion of the Note and the exercise of the Warrant and the Option, respectively. The Purchasers further confirm that they have had an opportunity to ask questions and receive answers from the Company regarding the Company's and its Subsidiaries' business, management and financial affairs and the terms and conditions of the Offering, the Note, the Option, the Warrant and the Securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to the Purchasers or to which the Purchasers had access. 15.22 Purchasers Bears Economic Risk. The Purchasers have substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. The Purchasers must bear the economic risk of this investment until the Securities are sold pursuant to: (i) an effective registration statement under the Securities Act; or (ii) an exemption from registration is available with respect to such sale. 15.23 Acquisition for Own Account. The Purchasers are acquiring the Note, the Option and the Note Shares and the Option Shares for the Purchaser's own accounts for investment only, and not as a nominee or agent and not with a view towards or for resale in connection with their distribution. 15.24 Purchasers Can Protect Its Interest. The Purchasers represent that by reason of their, or of their management's, business and financial experience, the Purchasers have the capacity to evaluate the merits and risks of their investment in the Note, the Option, and the Securities and to protect their own interests in connection with the transactions contemplated in this Agreement and the Related Agreements. Further, Purchasers are aware of no publication of any advertisement in connection with the transactions contemplated in the Agreement or the Related Agreements. 15.25 Accredited Investor. Purchasers represents that they are accredited investors within the meaning of Section 501(a)(3) of Regulation D under the Securities Act. 15.26 Legends. (a) The Note shall bear substantially the following legend: 15 "THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE, STATE SECURITIES LAWS. THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE OR SUCH SHARES UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO EPIXTAR CORP. AND/OR VOXX CORPORATION, AS APPLICABLE, THAT SUCH REGISTRATION IS NOT REQUIRED." (b) The Note Shares, the Warrant Shares and the Option Shares, if not issued by DWAC system (as hereinafter defined), shall bear a legend which shall be in substantially the following form until such shares are covered by an effective registration statement filed with the SEC: "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO EPIXTAR CORP. AND/OR VOXX CORPORATION, AS APPLICABLE, THAT SUCH REGISTRATION IS NOT REQUIRED." (c) The Option shall bear substantially the following legend: 16 "THIS OPTION AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THIS OPTION AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS OPTION MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS OPTION OR THE UNDERLYING SHARES OF COMMON STOCK UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO VOXX CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED." (d) The Warrant shall bear substantially the following legend: "THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON SHARES 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 OR THE UNDERLYING SHARES OF COMMON STOCK UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO VOXX CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED." 16. Covenants of the Company. The Company covenants and agrees with the Purchasers as follows: 16.1 Stop-Orders. The Company will advise the Purchasers, promptly after it receives notice of issuance by the Securities and Exchange Commission (the "SEC"), any state securities commission or any other regulatory authority of any stop order or of any order preventing or suspending any offering of any securities of the Company, or of the suspension of the qualification of the Common Stock of the Company for offering or sale in any jurisdiction, or the initiation of any proceeding for any such purpose. 16.2 Listing. (a) EPXR shall promptly secure the listing of the shares of EPXR Common Stock issuable upon conversion of the Note on the Principal Market (as defined below) (subject to official notice of issuance) and shall maintain such listing so long as any other shares of EPXR Common Stock shall be so listed. EPXR will maintain the listing of EPXR Common Stock on the Principal Market, and will comply in all material respects with EPXR's reporting, filing and other obligations under the bylaws or rules of the National Association of Securities Dealers ("NASD") and such exchanges, as applicable. (b) Concurrently with the consummation of an initial public offering of the VOXX Common Stock, VOXX shall promptly secure the listing of the shares of VOXX Common Stock issuable upon conversion of the Note and upon the exercise of the Option and the Warrant on the Principal Market (subject to official notice of issuance) and shall maintain such listing so long as any other shares of EPXR Common Stock shall be so listed. EPXR will maintain the listing of EPXR Common Stock on the Principal Market, and will comply in all material respects with EPXR's reporting, filing and other obligations under the bylaws or rules of the National Association of Securities Dealers ("NASD") and such exchanges, as applicable. (c) For purposes hereof, the term "Principal Market" means the NASD Over The Counter Bulletin Board, NASDAQ SmallCap Market, NASDAQ National Markets System, American Stock Exchange or New York Stock Exchange (whichever of the foregoing is at the time the principal trading exchange or market for the respective Common Stock). 17 16.3 Market Regulations. The Company shall notify the SEC, NASD and applicable state authorities, in accordance with their requirements, of the transactions contemplated by this Agreement, and shall take all other necessary action and proceedings as may be required and permitted by applicable law, rule and regulation, for the legal and valid issuance of the Securities to the Purchasers and promptly provide copies thereof to the Purchasers. 16.9 Reporting Requirements. The Company will timely file with the SEC all reports required to be filed pursuant to the Exchange Act and refrain from terminating its status as an issuer required by the Exchange Act to file reports thereunder even if the Exchange Act or the rules or regulations thereunder would permit such termination. 16.10 Use of Funds. The Company agrees that it will use the proceeds of the sale of the Note, the Warrant and the Option (x) for general working capital purposes and (y) for the development and acquisition of certain contact centers in the Phillipines. 16.11 Access to Facilities. Each of the Company and each of its Subsidiaries will permit any representatives designated by the Purchasers (or any successor of the Purchasers), upon reasonable notice and during normal business hours, at such person's expense and accompanied by a representative of the Company, to: (a) visit and inspect any of the properties of the Company or any of its Subsidiaries; (b) examine the corporate and financial records of the Company or any of its Subsidiaries (unless such examination is not permitted by federal, state or local law or by contract) and make copies thereof or extracts therefrom; and (c) discuss the affairs, finances and accounts of the Company or any of its Subsidiaries with the directors, officers and independent accountants of the Company or any of its Subsidiaries. Notwithstanding the foregoing, neither the Company nor any of its Subsidiaries will provide any material, non-public information to the Purchasers unless the Purchasers sign a confidentiality agreement and otherwise comply with Regulation FD, under the federal securities laws. 16.12 Taxes. Each of the Company and each of its Subsidiaries will promptly pay and discharge, or cause to be paid and discharged, when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property or business of the Company and its Subsidiaries; provided, however, that any such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if the Company and/or such Subsidiary shall have set aside on its books adequate reserves with respect thereto, and provided, further, that the Company and its Subsidiaries will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose any lien which may have attached as security therefor. 18 16.13 Insurance. Each of the Company and its Subsidiaries will keep its assets which are of an insurable character insured by financially sound and reputable insurers against loss or damage by fire, explosion and other risks customarily insured against by companies in similar business similarly situated as the Company and its Subsidiaries; and the Company and its Subsidiaries will maintain, with financially sound and reputable insurers, insurance against other hazards and risks and liability to persons and property to the extent and in the manner which the Company reasonably believes is customary for companies in similar business similarly situated as the Company and its Subsidiaries and to the extent available on commercially reasonable terms. The Company, and each of its Subsidiaries will jointly and severally bear the full risk of loss from any loss of any nature whatsoever with respect to the assets pledged to the Purchasers as security for its obligations hereunder and under the Related Agreements. At the Company's and each of its Subsidiaries' joint and several cost and expense in amounts and with carriers reasonably acceptable to Purchasers, the Company and each of its Subsidiaries shall (i) keep all its insurable properties and properties in which it has an interest insured against the hazards of fire, flood, sprinkler leakage, those hazards covered by extended coverage insurance and such other hazards, and for such amounts, as is customary in the case of companies engaged in businesses similar to the Company's or the respective Subsidiary's including business interruption insurance; (ii) maintain a bond in such amounts as is customary in the case of companies engaged in businesses similar to the Company's or the respective Subsidiary's insuring against larceny, embezzlement or other criminal misappropriation of insured's officers and employees who may either singly or jointly with others at any time have access to the assets or funds of the Company or any of its Subsidiaries either directly or through governmental authority to draw upon such funds or to direct generally the disposition of such assets; (iii) maintain public and product liability insurance against claims for personal injury, death or property damage suffered by others; (iv) maintain all such worker's compensation or similar insurance as may be required under the laws of any state or jurisdiction in which the Company or the respective Subsidiary is engaged in business; and (v) furnish Purchasers with (x) copies of all policies and evidence of the maintenance of such policies at least thirty (30) days before any expiration date. 17.15 Intellectual Property. Each of the Company and each of its Subsidiaries shall maintain in full force and effect its existence, rights and franchises and all licenses and other rights to use Intellectual Property owned or possessed by it and reasonably deemed to be necessary to the conduct of its business. 17.16 Properties. Each of the Company and each of its Subsidiaries will keep its properties in good repair, working order and condition, reasonable wear and tear excepted, and from time to time make all needful and proper repairs, renewals, replacements, additions and improvements thereto; and each of the Company and each of its Subsidiaries will at all times comply with each provision of all leases to which it is a party or under which it occupies property if the breach of such provision could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 17.17 Confidentiality. The Company agrees that it will not disclose, and will not include in any public announcement, the name of the Purchasers, unless expressly agreed to by the Purchasers or unless and until such disclosure is required by law or applicable regulation, and then only to the extent of such requirement. Notwithstanding the foregoing, the Company may disclose Purchaser's identity and the terms of this Agreement to its current and prospective debt and equity financing sources. 19 17.18 Required Approvals. For so long as twenty-five percent (25%) of the principal amount of the Note is outstanding, Voxx, without the prior written consent of the Purchasers, shall not, and shall not permit any of its Subsidiaries to: (a) (i) directly or indirectly declare or pay any dividends, other than dividends paid to EPXR or any of its Subsidiaries, (ii) issue any preferred stock that is manditorily redeemable prior to the six month anniversary of the Maturity Date (as defined in the Note), (iii) redeem any of its preferred stock or other equity interests, or (iv) issue any equity interests of Voxx, or agree to issue any equity interests of Voxx prior to the consummation of, or in connection with, an initial public offering of the Voxx Common Stock (other than the issuances to the Laurus Creditors (as defined in the Intercreditor Agreement) that are contemplated by the Laurus Documents (as defined in the Intercreditor Agreement) and/or issuances to the Sands Creditors (as defined in the Intercreditor Agreement) that are contemplated by the Sands Documents (as defined in the Intercreditor Agreement) or (iii) issuances to the investors in respect of the Bridge Loan Indebtedness (as defined below) in accordance with the terms set forth in Section 6.12(e)(i)(v) below); (b) liquidate, dissolve or effect a material reorganization, other than the liquidation or dissolution of Immaterial Subsidiaries (it being understood that in no event shall (i) EPXR or Voxx merge or (ii) either EPXR or Voxx dissolve, liquidate or merge with any other person or entity (unless EPXR or Voxx, as the case may be, is the surviving entity)); (c) become subject to (including, without limitation, by way of amendment to or modification of) any agreement or instrument which by its terms would (under any circumstances) restrict EPXR's or any of its Subsidiaries' right to perform the provisions of this Agreement, any Related Agreement or any of the agreements contemplated hereby or thereby; (d) materially alter or change the scope of the business of EPXR and its Subsidiaries taken as a whole; 20 (e) (i) create, incur, assume or suffer to exist any indebtedness (exclusive of trade debt and debt incurred to finance the purchase of equipment (not in excess of five percent (5%) per annum of the fair market value of Voxx's assets) whether secured or unsecured other than (v) indebtedness consisting of unsecured bridge loans in an aggregate principal amount not to exceed $5,000,000 at any time outstanding ("Bridge Loan Indebtedness"), which bridge loans shall by their terms (I) require either (a) the repayment thereof from the proceeds of an initial public offering of the VOXX Common Stock or (b) the conversion thereof into VOXX Common Stock in connection with (but not prior to the VOXX IPO Date (as defined in the Note)) an initial public offering of the VOXX Common Stock at a conversion price no less than 70% of the price of the VOXX Common Stock in connection with the such initial public offering thereof and (II) may provide for the issuance of warrants to the investors with respect to such Bridge Loan Indebtedness and issuance of warrants to the selling agent with respect to such Bridge Loan Indebtedness, in each case so long as such warrants are not exercisable prior to the VOXX IPO Date (as defined in the Note) and are not exercisable at a price per share of Voxx Common Stock less than or equal to $2.23 (as adjusted proportionately for any stock splits, combinations or similar events), (w) lease obligations (capitalized or otherwise) incurred by the Company or any of its Subsidiaries in the ordinary course of business, (x) the Sands Obligations (as defined in the Intercreditor Agreement) and the Laurus Obligations (as defined in the Intercreditor Agreement), (y) indebtedness set forth on Schedule 6.12(e) attached hereto and made a part hereof and any refinancings or replacements thereof on terms no less favorable to the Purchaser than the indebtedness being refinanced or replaced, and (z) any debt incurred in connection with the purchase of assets in the ordinary course of business, or any refinancings or replacements thereof on terms no less favorable to the Purchaser than the indebtedness being refinanced or replaced; (ii) cancel any debt owing to it in excess of $50,000 in the aggregate during any 12 month period; (iii) assume, guarantee, endorse or otherwise become directly or contingently liable in connection with any obligations of any other Person, except the endorsement of negotiable instruments by EPXR for deposit or collection or similar transactions in the ordinary course of business or guarantees of indebtedness otherwise permitted to be outstanding pursuant to this clause (e); (f) create or acquire any Subsidiary after the date hereof unless (i) such Subsidiary is a wholly-owned Subsidiary of Voxx and (ii) such Subsidiary becomes party to the Master Security Agreement, the Stock Pledge Agreement, the Subsidiary Guaranty (in each case, either by executing a counterpart thereof or an assumption or joinder agreement in respect thereof) and/or, if requested by the Purchasers with respect to entities located outside of the United States, the foreign equivalent of any such agreement or guaranty (it being understood that the terms and conditions of any such foreign equivalent shall be satisfactory to the Purchasers), and, to the extent required by the Purchasers, satisfies each condition of this Agreement and the Related Agreements as if such Subsidiary were a Subsidiary of Voxx on the Closing Date; and (g) make, or permit any of its Subsidiaries which are Credit Parties to make, any loans or advances to, any person or entity, other than (x) to EPXR or any of its Subsidiaries or (y) so long as no Event of Default (as defined in the Note) has occurred and is continuing, immaterial investments, loans and/or advances made in the ordinary course of business. For the purposes of this Agreement, "Credit Party" shall mean (x) Voxx and each Subsidiary of Voxx organized in the United States of America that is party to the Master Security Agreement, the Stock Pledge Agreement and the Subsidiary Guaranty and (y) Epixtar Phillippines IT-Enabled Services Corporation, a corporation organized under the laws of the Phillippines ("Epixtar Phillippines") and each other wholly-owned Subsidiary of the Voxx that is organized outside of the United States of America that has executed the Foreign Documentation referred to in Section 6.16 (it being understood and agreed that an Immaterial Subsidiary shall be deemed a Credit Party for purposes of this definition following the execution by such Immaterial Subsidiary of an assumption or joinder agreement with respect to the Master Security Agreement, the Subsidiary Guaranty and the Stock Pledge Agreement). 21 22.2 Reissuance of Securities. The Company agrees to reissue certificates representing the Securities without the legends set forth in Section 5.7 above at such time as: (a) the holder thereof is permitted to dispose of such Securities pursuant to Rule 144(k) under the Securities Act; or (b) upon resale subject to an effective registration statement after such Securities are registered under the Securities Act. The Company agrees to cooperate with the Purchasers and Warrant Holders in connection with all resales pursuant to Rule 144(d) and Rule 144(k) and provide legal opinions necessary to allow such resales provided the Company and its counsel receive reasonably requested representations from the selling Purchasers, Warrant Holders and broker, if any. 22.3 Opinion. On the Closing Date, the Company will deliver to the Purchasers and Warrant Holders an opinion acceptable to the Purchasers from the Company's external legal counsel. The Company will provide, at the Company's expense, such other legal opinions in the future as are deemed reasonably necessary, as the case may be, by the Purchasers and Warrant Holders (and acceptable to the Purchasers and Warrant Holders) in connection with the conversion of the Note and exercise of the Option and the Warrant. 6.15 Margin Stock. The Company will not permit any of the proceeds of the Note, the Warrant or the Option to be used directly or indirectly to "purchase" or "carry" "margin stock" or to repay indebtedness incurred to "purchase" or "carry" "margin stock" within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect. 6.16 Foreign Security. No later than 20 days following the Closing Date hereunder, the Company shall cause Epixtar Phillipines, each other applicable Subsidiary of the Company and any other third party requested by the Purchasers to enter into such security and guaranty documentation governed by laws of the Phillippines as is requested by the Purchasers, with such documentation to be in form and substance satisfactory to the Purchasers. No later than 60 days following a request by the Purchasers, the Company shall cause each Subsidiary organized in a jurisdiction outside of the United States (collectively, the "Foreign Subsidiaries"), other than an Immaterial Subsidiary, to execute such guaranty and security documentation governed by the jurisdiction of organization of such Subsidiary (the "Foreign Documentation") as the Purchasers deem necessary or desirable. All such Foreign Documentation shall be in form and substance satisfactory to the Purchasers, and the Company agrees to cause the respective Foreign Subsidiary to deliver all such other documentation as is requested by the Purchasers in connection with the execution and delivery of such Foreign Documentation (including, without limitation, an opinion of counsel satisfactory to the Purchasers). Furthermore, it is hereby agreed that the Company shall not permit any equity interests of any Foreign Subsidiary (or any parent thereof) to be transferred to any person or other entity that is not a Credit Party until such time as the Foreign Subsidiaries have become party to the Foreign Documentation required to be entered into pursuant to this Section 6.16. The Company shall reimburse the Purchasers for any and all legal fees and other expenses incurred by the Purchasers in connection with the preparation, execution, negotiation and delivery of the Foreign Documentation. 22 6.17 Financing Right of First Refusal. (a) The Company hereby agrees that the Purchasers shall have the right to participate in any provision of Bridge Loan Indebtedness by Laurus pursuant to Section 6.17 of the Laurus Securities Purchase Agreement on a pro rata basis based on the principal amount of the Laurus investment made on the date hereof and the principal amount of the investment made by the Purchasers on the date hereof. (b) The Company will not, and will not permit its Subsidiaries to, agree, directly or indirectly, to any restriction with any person or entity which limits the ability of the Purchasers to consummate a Bridge Loan Indebtedness transaction or any other additional financing with the Company or any of its Subsidiaries. 6.18 Issuance of Voxx Common Stock. Notwithstanding anything to the contrary contained in this Agreement, EPXR and Voxx hereby agree that it shall not (or shall not permit, as the case may be) issue any shares of Voxx Common Stock (or any securities convertible or exercisable into shares of Voxx Common Stock) to be issued, or agree to issue any share of Voxx Common Stock (or any securities convertible or exercisable into shares of Voxx Common Stock), in any case, at a price less than or equal to $2.23 per share. 23. Covenants of the Purchasers. The Purchasers covenants and agrees with the Company as follows: 23.1 Confidentiality. The Purchasers agrees that it will not disclose, and will not include in any public announcement, the name of the Company, unless expressly agreed to by the Company or unless and until such disclosure is required by law or applicable regulation, and then only to the extent of such requirement. 23.2 Non-Public Information. The Purchasers agree not to effect any sales in the shares of the Company's Common Stock while in possession of material, non-public information regarding the Company if such sales would violate applicable securities law. 24. Covenants of the Company and Purchasers Regarding Indemnification. 24.1 Company Indemnification. The Company agrees to indemnify, hold harmless, reimburse and defend the Purchasers, each of the Purchasers's officers, directors, agents, affiliates, control persons, and principal shareholders, against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Purchasers which results, arises out of or is based upon: (i) any misrepresentation by the Company or any of its Subsidiaries or breach of any warranty by the Company or any of its Subsidiaries in this Agreement, any Related Agreement or in any exhibits or schedules attached hereto or thereto; or (ii) any breach or default in performance by Company or any of its Subsidiaries of any covenant or undertaking to be performed by Company or any of its Subsidiaries hereunder, under any other Related Agreement or any other agreement entered into by the Company and/or any of its Subsidiaries and Purchasers relating hereto or thereto. 23 24.2 Purchasers's Indemnification. Purchasers agree to indemnify, hold harmless, reimburse and defend the Company and each of the Company's officers, directors, agents, affiliates, control persons and principal shareholders, at all times against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Company which results, arises out of or is based upon: (i) any misrepresentation by Purchasers or breach of any warranty by Purchasers in this Agreement or in any exhibits or schedules attached hereto or any Related Agreement; or (ii) any breach or default in performance by Purchasers of any covenant or undertaking to be performed by Purchasers hereunder, or any other agreement entered into by the Company and Purchasers relating hereto. 25. Conversion of Convertible Note. 25.1 Mechanics of Conversion. (a) Provided the Purchasers have notified the Company of the Purchaser's intention to sell the Note Shares and the Note Shares are included in an effective registration statement or are otherwise exempt from registration when sold: (i) upon the conversion of the Note or part thereof, the Company shall, at its own cost and expense, take all necessary action (including the issuance of an opinion of counsel reasonably acceptable to the Purchasers following a request by the Purchasers) to assure that the Company's transfer agent shall issue shares of the Company's Common Stock in the name of the Purchasers (or its nominee) or such other persons as designated by the Purchasers in accordance with Section 9.1(b) hereof and in such denominations to be specified representing the number of Note Shares issuable upon such conversion; and (ii) the Company warrants that no instructions other than these instructions have been or will be given to the transfer agent of the Company's Common Stock and that after the Effectiveness Date (as defined in the respective Registration Rights Agreement) the Note Shares issued will be freely transferable subject to the prospectus delivery requirements of the Securities Act and the provisions of this Agreement, and will not contain a legend restricting the resale or transferability of the Note Shares. (b) Purchasers will give notice of its decision to exercise its right to convert the Note or part thereof by telecopying or otherwise delivering an executed and completed notice of the number of shares to be converted to the Company (the "Notice of Conversion"). The Purchasers will not be required to surrender the Note until the Purchasers have received good delivery of the securities representing the Note Shares or until the Note has been fully satisfied. Each date on which a Notice of Conversion is telecopied or delivered to the Company in accordance with the provisions hereof shall be deemed a "Conversion Date." Pursuant to the terms of the Notice of Conversion, the Company will issue instructions to the transfer agent accompanied by an opinion of counsel within one (1) business day of the date of the delivery to the Company of the Notice of Conversion and shall cause the transfer agent to transmit the certificates representing the Conversion Shares to the Purchasers by crediting the account of the Purchaser's brokerage account (which account the Purchasers will supply to the Company on or before delivery of the first Notice of Conversion) within three (3) business days after receipt by the Company of the Notice of Conversion (the "Delivery Date"). 24 (c) The Company understands that a delay in the delivery of the Note Shares in the form required pursuant to Section 9 hereof beyond the Delivery Date could result in economic loss to the Purchasers. In the event that the Company fails to direct its transfer agent to deliver the Note Shares to the Purchasers within the time frame set forth in Section 9.1(b) above and the Note Shares are not delivered to the Purchasers by the Delivery Date, as compensation to the Purchasers for such loss, the Company agrees to pay late payments to the Purchasers for late issuance of the Note Shares in the form required pursuant to Section 9 hereof upon conversion of the Note in the amount equal to the greater of: (i) $500 per business day after the Delivery Date; or (ii) the Purchaser's actual damages from such delayed delivery. Notwithstanding the foregoing, the Company will not owe the Purchasers any late payments if the delay in the delivery of the Note Shares beyond the Delivery Date is solely out of the control of the Company and the Company is actively trying to cure the cause of the delay. The Company shall pay any payments incurred under this Section in immediately available funds upon demand and, in the case of actual damages, accompanied by reasonable documentation of the amount of such damages. Such documentation shall show the number of shares of Common Stock the Purchasers is forced to purchase (in an open market transaction) which the Purchasers anticipated receiving upon such conversion, and shall be calculated as the amount by which (A) the Purchaser's total purchase price (including customary brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (B) the aggregate principal and/or interest amount of the Note, for which such Conversion Notice was not timely honored. Nothing contained herein or in any document referred to herein or delivered in connection herewith shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest or dividends required to be paid or other charges hereunder exceed the maximum amount permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Purchasers and thus refunded to the Company. 26. Registration Rights. 26.1 Registration Rights Granted. The Company hereby grants registration rights to the Purchasers and the Warrant Holders pursuant to a Registration Rights Agreement dated as of even date herewith between the Company, the Purchasers and the Warrant Holders. 25 26.2 Offering Restrictions. Except as previously disclosed in the SEC Reports or in the Exchange Act Filings, or stock or stock options granted to employees or directors of the Company (these exceptions hereinafter referred to as the "Excepted Issuances"), neither the Company nor any of its Subsidiaries will issue any securities with a continuously variable/floating conversion feature which are or could be (by conversion or registration) free-trading securities (i.e. common stock subject to a registration statement) prior to the full repayment or conversion of the Note (together with all accrued and unpaid interest and fees related thereto) (the "Exclusion Period"), provided that securities with a variable/floating rate conversion feature that is not nor can never be less than the Fixed Conversion Price (as defined in the Note) shall be permitted. 27. Miscellaneous. 27.1 Governing Law. THIS AGREEMENT AND EACH RELATED AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. EXCEPT AS SET FORTH BELOW IN THIS SECTION 11.1, ANY AND ALL DISPUTES, CONTROVERSIES AND CLAIMS THAT THE COMPANY OR ANY OF ITS SUBSIDIARIES MAY ASSERT AGAINST THE PURCHASERS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY RELATED AGREEMENT SHALL BE DETERMINED EXCLUSIVELY BY ARBITRATION (EACH SUCH ARBITRATION, AN "ARBITRATION") IN NEW YORK CITY BEFORE A PANEL OF THREE NEUTRAL ARBITRATORS AGREED TO BY THE PURCHASERS AND THE COMPANY (COLLECTIVELY, THE "ARBITRATORS") IN ACCORDANCE WITH AND PURSUANT TO THE THEN EXISTING COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. THE COMPANY (ON ITS BEHALF AND ON BEHALF OF ITS SUBSIDIARIES) HEREBY IRREVOCABLY WAIVES ANY RIGHT TO ASSERT SUCH CLAIMS IN ANY OTHER FORUM. THE ARBITRATORS SHALL HAVE THE POWER IN THEIR DISCRETION TO AWARD SPECIFIC PERFORMANCE OR INJUNCTIVE RELIEF (BUT SHALL NOT HAVE THE POWER TO RENDER ANY INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES) AND REASONABLE ATTORNEYS' FEES AND EXPENSES TO ANY PARTY IN ANY ARBITRATION. THE ARBITRATORS MAY NOT CHANGE, MODIFY OR ALTER ANY EXPRESS CONDITION, TERM OR PROVISION OF THIS AGREEMENT OR OF ANY RELATED AGREEMENT NOR SHALL THEY HAVE THE POWER TO RENDER ANY AWARD AGAINST THE PURCHASERS THAT WOULD HAVE SUCH EFFECT. EACH ARBITRATION AWARD SHALL BE FINAL AND BINDING UPON THE PARTIES SUBJECT THERETO AND JUDGMENT MAY BE ENTERED THEREON IN ANY COURT OF COMPETENT JURISDICTION. THE SERVICE OF ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN CONNECTION WITH AN ARBITRATION OR FOR THE ENFORCEMENT OF ANY ARBITRATION AWARD MAY BE MADE IN THE SAME MANNER AS COMMUNICATIONS MAY BE GIVEN UNDER SECTION 11.8 HEREOF. NOTWITHSTANDING THE FOREGOING, THE PROVISIONS OF THIS SECTION 11.1 NOR ANY OTHER PROVISION CONTAINED IN THIS AGREEMENT OR IN ANY RELATED AGREEMENT SHALL LIMIT IN ANY MANNER WHATSOEVER THE PURCHASERS'S RIGHT TO COMMENCE AN ACTION AGAINST OR IN CONNECTION WITH THE COMPANY, ANY OF ITS SUBSIDIARIES OR THEIR RESPECTIVE PROPERTIES IN ANY COURT OF COMPETENT JURISDICTION OR OTHERWISE UTILIZE JUDICIAL PROCESS IN CONNECTION WITH OR ARISING OUT OF THE PURCHASERS'S RIGHTS AND REMEDIES UNDER THIS AGREEMENT AND/OR ANY RELATED AGREEMENT OR OTHERWISE (ANY SUCH ACTION, A "COURT ACTION"). COURT ACTIONS MAY BE BROUGHT BY THE PURCHASERS IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION AND THE COMPANY (ON ITS BEHALF AND ON BEHALF OF ITS SUBSIDIARIES) IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH STATE AND FEDERAL COURTS AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE OF INCONVENIENT FORUM OR LACK OF PERSONAL JURISDICTION IN SUCH FORUM OR RIGHT OF REMOVAL OR RIGHT TO JURY TRIAL UNDER ANY APPLICABLE LAW OR DECISION OR OTHERWISE. SERVICE OF ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN CONNECTION WITH A COURT ACTION MAY BE MADE IN THE SAME MANNER AS COMMUNICATIONS MAY BE GIVEN UNDER SECTION 11.8. IN ADDITION, THE PURCHASERS MAY SERVE PROCESS IN ANY OTHER MANNER PERMITTED UNDER APPLICABLE LAW. IN THE EVENT THAT ANY PROVISION OF THIS AGREEMENT OR ANY RELATED AGREEMENT DELIVERED IN CONNECTION HEREWITH 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 AGREEMENT OR ANY RELATED AGREEMENT. 26 27.2 Survival. The representations, warranties, covenants and agreements made herein shall survive any investigation made by the Purchasers and the Warrant Holders and the closing of the transactions contemplated hereby to the extent provided therein. All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in connection with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company hereunder solely as of the date of such certificate or instrument. 27.3 Successors. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, heirs, executors and administrators of the parties hereto and shall inure to the benefit of and be enforceable by each person who shall be a holder of the Securities from time to time, other than the holders of Common Stock which has been sold by the Purchasers or the Warrant Holders pursuant to Rule 144 or an effective registration statement. Purchasers and the Warrant Holders may not assign their rights hereunder to a competitor of the Company. 27.4 Entire Agreement. This Agreement, the Related Agreements, the exhibits and schedules hereto and thereto and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein. 27 27.5 Severability. In case any provision of the Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 27.6 Amendment and Waiver. (a) This Agreement may be amended or modified only upon the written consent of the Company and, as the case may be, the Purchasers or the Warrant Holders. (b) The obligations of the Company and the rights of the Purchasers and warrant Holders under this Agreement may be waived only with the written consent of the Purchasers and the Warrant Holders. (c) The obligations of the Purchasers and the Warrant Holders and the rights of the Company under this Agreement may be waived only with the written consent of the Company. 27.7 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement or the Related Agreements, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. All remedies, either under this Agreement or the Related Agreements, by law or otherwise afforded to any party, shall be cumulative and not alternative. 27.8 Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified; (b) when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (c) three (3) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent as follows: If to the Company, to: Epixtar Corp. Voxx Corporation 11900 Biscayne Boulevard, Suite 700 Miami, Florida 33181 Attention: David Srour Facsimile: 305-503-8610 28 with a copy to: Michael DiGiovanna, Esq. 212 Carnegie Center Suite 206 Princeton, New Jersey 08540 Facsimile: 609-452-9473 If to the Purchasers, to: Sands Brothers Venture Capital c/o Laidlaw & Company (UK) Ltd. Attn: Marc Koplik 90 Park Avenue, 39th Floor New York, NY (10016) If to the Warrant Holders Laidlaw & Company (UK) Ltd. Attn: Marc Koplik 90 Park Avenue, 39th Floor New York, NY (10016) In each case with a copy to: Laidlaw & Company (UK) Ltd. Attn: Glen McKelvey 90 Park Avenue, 39th Floor New York, NY (10016) or at such other address as the Company or the Purchasers and Warrant Holders may designate by written notice to the other parties hereto given in accordance herewith. 27.9 Attorneys' Fees. In the event that any suit or action is instituted to enforce any provision in this Agreement, the prevailing party in such dispute shall be entitled to recover from the losing party all fees, costs and expenses of enforcing any right of such prevailing party under or with respect to this Agreement, including, without limitation, such reasonable fees and expenses of attorneys and accountants, which shall include, without limitation, all fees, costs and expenses of appeals. 27.10 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. 27.11 Facsimile Signatures; Counterparts. This Agreement may be executed by facsimile signatures and in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. 29 27.12 Broker's Fees. Except as provided in Section 2(c) and 2(d) and set forth on Schedule 11.12 hereof, each party hereto represents and warrants that no agent, broker, investment banker, person or firm acting on behalf of or under the authority of such party hereto is or will be entitled to any broker's or finder's fee or any other commission directly or indirectly in connection with the transactions contemplated herein. Each party hereto further agrees to indemnify each other party for any claims, losses or expenses incurred by such other party as a result of the representation in this Section 11.12 being untrue. 27.13 Construction. Each party acknowledges that its legal counsel participated in the preparation of this Agreement and the Related Agreements 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 Agreement to favor any party against the other. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK 30 IN WITNESS WHEREOF, the parties hereto have executed the SECURITIES PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof. COMPANY: PURCHASERS: EPIXTAR CORP. SANDS BROTHERS VENTURE CAPITAL LLC Sands Brothers Venture Capital II LLC Sands Brothers Venture Capital III LLC Sands Brothers Venture Capital IV LLC By: /s/ Ilene Kaminsky By: /s/ Authorized Officer ------------------------- -------------------------- Name: Ilene Kaminsky Name: ------------------------- -------------------------- Title: CEO Title: ------------------------- -------------------------- ------------------------- -------------------------- VOXX CORPORATION By: /s/ Ilene Kaminsky ------------------------- Name: Ilene Kaminsky ------------------------- Title: CEO ------------------------- WARRANTHOLDERS: Laidlaw & Company (UK) Ltd. 90 Park Avenue, 39th Floor New York, NY (10016) BY: /s/ Robert Bonaventura Name: Robert Bonaventura Title: President 31 EXHIBIT A THE PURCHASERS Sands Brothers Venture Capital LLC 90 Park Avenue New York, NY 10016 $100,000 Fax: 212 697 8035 Tax Id: 13 4102660 Sands Brothers Venture Capital II LLC 90 Park Avenue New York, NY 10016 $50,000 Fax: 212 697 8035 Tax Id: 13 4110488 Sands Brothers Venture Capital III LLC 90 Park Avenue New York, NY 10016 $1,200,000 Fax: 212 697 8035 Tax Id: 13 4137586 Sands Brothers Venture Capital IV LLC 90 Park Avenue New York, NY 10016 $150,000 Fax: 212 697 8035 Tax Id: 13 4157861 A-1 EXHIBIT B THE WARRANT HOLDERS LAIDLAW & COMPANY (UK) LTD. 2 EXHIBIT C FORM OF CONVERTIBLE NOTE 3 EXHIBIT D-1 FORM OF OPTION B-1 EXHIBIT D-2 FORM OF WARRANT 2 EXHIBIT E FORM OF OPINION 3 EXHIBIT E FORM OF ESCROW AGREEMENT EX-4.13.14 15 b406530ex4_13-14.txt EXHIBIT 4.13.14 EXHIBIT 4.13.14 VOXX CORPORATION AND CERTAIN OF ITS SUBSIDIARIES MASTER SECURITY AGREEMENT To: Sands Brothers Venture Capital LLC Sands Brothers Venture Capital II LLC Sands Brothers Venture Capital III LLC Sands Brothers Venture Capital IV LLC (collectively, the "Noteholders") Date: April 29, 2005 To Whom It May Concern: 1. To secure the payment of all Obligations (as hereafter defined), Voxx Corporation, a Florida corporation (the "Company"), each of the other undersigned parties (other than the Noteholders) and each other entity that is required to enter into this Master Security Agreement (each an "Assignor" and, collectively, the "Assignors") hereby assigns and grants to the Noteholders a continuing security interest in all of the following property now owned or at any time hereafter acquired by any Assignor, or in which any Assignor now have or at any time in the future may acquire any right, title or interest (the "Collateral"): all cash, cash equivalents, accounts, deposit accounts (including, without limitation, the Lockbox Deposit Accounts referred to below), inventory, equipment, goods, documents, instruments (including, without limitation, promissory notes), contract rights, general intangibles (including, without limitation, payment intangibles and an absolute right to license on terms no less favorable than those current in effect among our affiliates), chattel paper, supporting obligations, investment property (including, without limitation, all equity interests owned by any Assignor), letter-of-credit rights, trademarks, trademark applications, patents, patent applications, copyrights, copyright applications and tradestyles, in each case, in which any Assignor now have or hereafter may acquire any right, title or interest, all proceeds and products thereof (including, without limitation, proceeds of insurance) and all additions, accessions and substitutions thereto or therefore. In the event any Assignor wishes to finance the acquisition in the ordinary course of business of any hereafter acquired equipment and have obtained a commitment from a financing source to finance such equipment from an unrelated third party, the Noteholders agree to release their security interest on such hereafter acquired equipment so financed by such third party financing source. Except as otherwise defined herein, all capitalized terms used herein shall have the meaning provided such terms in the Securities Purchase Agreement referred to below. 2. The term "Obligations" as used herein shall mean and include all debts, liabilities and obligations owing by each Assignor to the Noteholders arising under, out of, or in connection with: (i) that certain Securities Purchase Agreement dated as of the date hereof by and among the Company, Epixtar Corp., a Florida corporation ("EPXR") and the Noteholders (the "Securities Purchase Agreement") and (ii) the Related Agreements referred to in the Securities Purchase Agreement (the Securities Purchase Agreement and each Related Agreement, as each may be amended, modified, restated or supplemented from time to time, are collectively referred to herein as the "Documents"), and in connection with any documents, instruments or agreements relating to or executed in connection with the Documents or any documents, instruments or agreements referred to therein or otherwise, and in connection with any other indebtedness, obligations or liabilities of any Assignor and/or any other subsidiary of the Company to the Noteholders, whether now existing or hereafter arising, direct or indirect, liquidated or unliquidated, absolute or contingent, due or not due and whether under, pursuant to or evidenced by a note, agreement, guaranty, instrument or otherwise, in each case, irrespective of the genuineness, validity, regularity or enforceability of such Obligations, or of any instrument evidencing any of the Obligations or of any collateral therefor or of the existence or extent of such collateral, and irrespective of the allowability, allowance or disallowance of any or all of the Obligations in any case commenced by or against any Assignor and/or any other subsidiary of the Company under Title 11, United States Code, including, without limitation, obligations or indebtedness of each Assignor and/or any other subsidiary of the Company for post-petition interest, fees, costs and charges that would have accrued or been added to the Obligations but for the commencement of such case, irrespective of the allowability, allowance or disallowance of such post-petition interest, fees, costs and charges; provided that, notwithstanding the foregoing, the "Obligations" shall not include any principal amount of indebtedness in excess of an aggregate amount of $1,500,000 and the rate of interest and fees related to the Obligations shall not exceed the rate of interest and fees provided for in the Documents (as in effect on the date hereof). 3. Each Assignor hereby jointly and severally represents, warrants and covenants to the Noteholders that: (a) it is a corporation, partnership or limited liability company, as the case may be, validly existing, in good standing and organized under the respective laws of its jurisdiction of organization set forth on Schedule A, and each Assignor will provide Laurus thirty (30) days' prior written notice of any change in any of its respective jurisdiction of organization; (b) its legal name is as set forth in its respective Certificate of Incorporation or other organizational document (as applicable) as amended through the date hereof and as set forth on Schedule A, and it will provide the Noteholders thirty (30) days' prior written notice of any change in its legal name; (c) its organizational identification number (if applicable) is as set forth on Schedule A hereto, and it will provide Laurus thirty (30) days' prior written notice of any change in any of its organizational identification number; (d) it is the lawful owner of the respective Collateral and it has the sole right to grant a security interest therein and will defend the Collateral against all claims and demands of all persons and entities; 2 (e) it will keep its respective Collateral free and clear of all attachments, levies, taxes, liens, security interests and encumbrances of every kind and nature ("Encumbrances"), except (i) Encumbrances securing (i) the Obligations and the obligations owed by each Assignor to the Noteholders pursuant to the Documents and (ii) the Laurus Obligations (as defined in the Intercreditor Agreement), (ii) to the extent said Encumbrance does not secure indebtedness in excess of $100,000 and such Encumbrance is removed or otherwise released within thirty (30) days of the creation thereof, (iii) liens of warehousemen, mechanics, materialmen, workers, repairmen, common carriers, or landlords, liens for taxes, assessments or other governmental charges, and other similar liens arising by operation of law, in each case arising in the ordinary course of business and for amounts that are not yet due and payable or which are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and for which an adequate reserve or other appropriate provision shall have been made to the extent required by generally accepted accounting principals, (iv) pledges or deposits in connection with workers' compensation, unemployment insurance and other social security legislation and (v) the Encumbrances set forth on Schedule B hereto (the preceding clauses (i) through (iv), collectively, the "Permitted Encumbrances"); (f) it will, at its and the other Assignors joint and several cost and expense, keep the Collateral in good state of repair (ordinary wear and tear excepted) and will not waste or destroy the same or any part thereof other than ordinary course discarding of items no longer used or useful in its or such other Assignors' business; (g) Subject to Section 6.12(g) in the Securities Purchase Agreement, it will not without each of the Noteholder's prior written consent, sell, exchange, lease or otherwise dispose of the Collateral, whether by sale, lease or otherwise, except (I) as set forth in the accounts receivable factoring documents described on Schedule B hereto (as such documents are in effect on the date hereof) and (II) for the sale of inventory in the ordinary course of business and for the disposition or transfer in the ordinary course of business during any fiscal year of obsolete and worn-out equipment or equipment no longer necessary for its ongoing needs, having an aggregate fair market value of not more than $75,000 and only to the extent that: (i) the proceeds of any such disposition are used to acquire replacement Collateral which is subject to The Noteholders' first priority perfected security interest, or are used to repay Obligations or to pay general corporate expenses; and (ii) following the occurrence of an Event of Default which continues to exist the proceeds of which are remitted to the Noteholders to be held as cash collateral for the Obligations; (h) it will insure or cause the Collateral to be insured in the Noteholders' names against loss or damage by fire, theft, burglary, pilferage, loss in transit and such other hazards as the Noteholders shall specify in amounts and under policies by insurers acceptable to the Noteholders and all premiums thereon shall be paid by such Assignor and the policies delivered to the Noteholders. If any such Assignor fails to do so, the Noteholders may procure such insurance and the cost thereof shall be promptly reimbursed by the Assignors, jointly and severally, and shall constitute Obligations; 3 (i) it will at all reasonable times, upon reasonable notice and in a reasonable manner, allow the Noteholders or their designated representatives free access to and the right of inspection of the Collateral; (j) such Assignor (jointly and severally with each other Assignor) hereby indemnifies and saves each Noteholder harmless from all loss, costs, damage, liability and/or expense, including reasonable attorneys' fees, that such Noteholders may sustain or incur to enforce payment, performance or fulfillment of any of the Obligations and/or in the enforcement of this Master Security Agreement or in the prosecution or defense of any action or proceeding either against any or all of the Noteholders or any Assignor concerning any matter growing out of or in connection with this Master Security Agreement, and/or any of the Obligations and/or any of the Collateral except to the extent caused by the Noteholders' own gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision); (k) Subject to Section 3(l) below, on or prior to the 30th day following the Closing Date, each Assignor will (x) irrevocably direct all of its present and future Account Debtors (as defined below) and other persons obligated to make payments constituting Collateral owned by any Assignor to make such payments directly to the lockboxes maintained by the Assignors (the "Lockboxes") with Gibralter Bank, N.A. or such other financial institution accepted to by Laurus Master Fund, Ltd. ("Laurus"), a Cayman Islands company acting as collateral agent for itself and the benefit of the Noteholders, as may be selected by such Assignor (the "Lockbox Bank") (each such direction pursuant to this clause (x), a "Direction Notice") and (y) provide Laurus with copies of each Direction Notice, each of which shall be agreed to and acknowledged by the respective Account Debtor. Upon receipt of such payments, the Lockbox Bank has agreed to deposit the proceeds of such payments in a deposit account maintained at the Lockbox Bank and accepted by Laurus in writing (collectively, the "Lockbox Deposit Accounts"). On or prior to the Closing Date, each Assignor shall and shall cause the Lockbox Bank to enter into all such documentation acceptable to Laurus pursuant to which, among other things, the Lockbox Bank agrees to, following notification by Laurus (which notification Laurus shall only give following the occurrence and during the continuance of an Event of Default), comply only with the instructions or other directions of Laurus concerning the Lockboxes and the Lockbox Deposit Account. All of each Assignor's invoices, account statements and other written or oral communications directing, instructing, demanding or requesting payment of any Account (as defined below) of any Assignor or any other amount constituting Collateral of any Assignor shall conspicuously direct that all payments be made to the Lockbox or such other address as the Noteholders may direct in writing. If, notwithstanding the instructions to Account Debtors, any Assignor or any other subsidiary of EPXR receives any payments referred to in this Section 3(k), such Assignor or such other subsidiary of EPXR shall immediately remit such payments to the Lockbox Deposit Account in their original form with all necessary endorsements. Until so remitted, such Assignor or such other subsidiary of EPXR shall hold all such payments in trust for and as the property of the Noteholders and shall not commingle such payments with any of its other funds or property. For the purpose of this Master Security Agreement, (x) "Accounts" shall mean all "accounts", as such term is defined in the Uniform Commercial Code as in effect in the State of New York on the date hereof, now owned or hereafter acquired by any Assignor (or EPXR or any other subsidiary of EPXR) for the benefit of any Assignor) and (y) "Account Debtor" shall mean any person or entity who is or may be obligated with respect to, or on account of, an Account. The Noteholders and each Assignor agree that so long as no Event of Default has occurred and is continuing, only the Assignors shall be permitted to access and utilize the cash in the Lockboxes for its corporate purposes as directed by the respective Assignor. 4 (l) Notwithstanding anything contained herein to the contrary, each Assignor is permitted to continue factoring its account receivables (x) owed by Discover Financial Services, Inc. ("Discover") and CompuCredit Corporation ("Compucredit") to such Assignor both in the Philippines and in the United States of America and (y) owed directly to Epixtar Marketing Corp., a Florida corporation (the "Permitted Factoring Arrangements"). Each Assignor explicitly agrees (i) not to factor any accounts receivable owed to it other than those accounts receivable owed by Discover and Compucredit and (ii) in respect of all receipts and other amounts owed any Assignor by any factoring company (each, a "Factor") conducting the Permitted Factoring Arrangements, (x) the Factor shall be deemd an Account Debtor and (y) all receipts and other amounts payable by the Factor to any Assignor shall be deposited and handled in accordance with the provisions of Section 3(k) hereof. (m) For so long as their shall be any Obligations due and owing to the Noteholders in respect of this Master Security Agreement and/or any Document, all our business of the type and nature currently conducted by the Company and its subsidiaries (the "Voxx Business") shall continue to be conducted by the Company and its subsidiaries (either now existing or hereon after formed as a wholly-owned subsidiary) (the "Voxx Business Entities") hereon in and after. (n) From and after the date hereof, EPXR and the Company will, as soon as practicable, use their collective best efforts to cause all assets, accounts, obligations, functions and other elements associated with the Voxx Business which are not, as of the date hereof, conducted or owned by the Company, to be consolidated within the Voxx Business Entities for the purpose of centralizing the Voxx Business within the Voxx Business Entities and thereby establishing the Voxx Business as a free-standing, independent operating enterprise capable of consummating an initial public offering with minimal operational and financial reliance upon EPXR and its non-Company affiliates. 4. The occurrence of any of the following events or conditions shall constitute an "Event of Default" under this Master Security Agreement: (a) breach of any covenant, warranty, representation or statement made or furnished to the Noteholders by any Assignor or on any Assignor's benefit was false or misleading in any material respect when made or furnished, and if subject to cure, shall not be cured for a period of thirty (30) days; (b) the loss, theft, substantial damage, destruction, sale or encumbrance to or of any of the Collateral or the making of any levy, seizure or attachment thereof or thereon except to the extent: (i) such loss is covered by insurance proceeds which are used to replace the item or repay the Noteholders; or 5 (ii) said levy, seizure or attachment does not secure indebtedness in excess of $100,000 and such levy, seizure or attachment has not been removed or otherwise released within thirty (30) days of the creation or the assertion thereof; (c) any Assignor shall become insolvent, cease operations, dissolve, terminate our business existence, make an assignment for the benefit of creditors, suffer the appointment of a receiver, trustee, liquidator or custodian of all or any part of Assignors' property; (d) any proceedings under any bankruptcy or insolvency law shall be commenced by or against any Assignor and if commenced against any Assignor shall not be dismissed within forty-five (45) days; (e) the Company shall repudiate, purport to revoke or fail to perform any or all of its obligations under the Notes held by the Noteholders (after passage of applicable cure period, if any); or (f) an Event of Default shall have occurred under and as defined in any Document, including without limitation an Event of Default in respect of the Laurus Obligations. 5. Upon the occurrence of any Event of Default and at any time thereafter, the Noteholders may declare all Obligations immediately due and payable and the Noteholders shall have the remedies of a secured party provided in the Uniform Commercial Code as in effect in the State of New York, this Agreement and other applicable law. Upon the occurrence of any Event of Default and at any time thereafter, the Noteholders will have the right to take possession of the Collateral and to maintain such possession on our premises or to remove the Collateral or any part thereof to such other premises as the Noteholders may desire. Upon the Noteholders' request, each of the Assignors shall assemble or cause the Collateral to be assembled and make it available to the Noteholders at a place designated by the Noteholders. If any notification of intended disposition of any Collateral is required by law, such notification, if mailed, shall be deemed properly and reasonably given if mailed at least ten (10) days before such disposition, postage prepaid, addressed to any Assignor either at such Assignor's address shown herein or at any address appearing on the Noteholders' records for such Assignor. Any proceeds of any disposition of any of the Collateral shall be applied by the Noteholders to the payment of all expenses in connection with the sale of the Collateral, including reasonable attorneys' fees and other legal expenses and disbursements and the reasonable expense of retaking, holding, preparing for sale, selling, and the like, and any balance of such proceeds may be applied by the Noteholders toward the payment of the Obligations in such order of application as the Noteholders may elect, and each Assignor shall be liable for any deficiency. For the avoidance of doubt, following the occurrence and during the continuance of an Event of Default, Laurus shall have the immediate right to withdraw any and all monies contained in the Lockbox Deposit Accounts and any other deposit accounts under the control of Laurus and apply same to the repayment of the Obligations in accordance with the terms of the Intercreditor Agreement. Notwithstanding anything to the contrary contained in this Master Security Agreement, the Purchase Agreement or any Related Agreement, in the event that the Noteholders exercise the remedies provided for in this Section 5, the Noteholders agree that the amounts (if any) set forth in the Lockbox Deposit Accounts shall be utilized to repay the Obligations prior to exercising its other remedies provided for in this Section 5. 6 6. If any Assignor defaults in the performance or fulfillment of any of the terms, conditions, promises, covenants, provisions or warranties on such Assignor's part to be performed or fulfilled under or pursuant to this Master Security Agreement (following any applicable grace period), the Noteholders may, at their option, without waiving their rights to enforce this Master Security Agreement according to its terms, immediately or at any time thereafter and without notice to any Assignor, perform or fulfill the same or cause the performance or fulfillment of the same for each Assignor's joint and several account and at each Assignor's joint and several cost and expense, and the cost and expense thereof (including reasonable attorneys' fees) shall be added to the Obligations and shall be payable on demand with interest thereon at the highest rate permitted by law. 7. Each Assignor appoints any of the Noteholders' officers, employees or any other person or entity whom the Noteholders may designate as our attorney, with power to execute such documents in each of our behalf and to supply any omitted information and correct patent errors in any documents executed by any Assignor or on any Assignor's behalf; to file financing statements against us covering the Collateral (and, in connection with the filing of any such financing statements, describe the Collateral as "all assets and all personal property, whether now owned and/or hereafter acquired" (or any substantially similar variation thereof)); following any Event of Default and any applicable period of grace, to sign our name on public records; and to do all other things the Noteholders deem necessary to carry out this Master Security Agreement. Each Assignor hereby ratifies and approves all acts of the attorney and neither the Noteholders nor the attorney will be liable for any acts of commission or omission, nor for any error of judgment or mistake of fact or law other than gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). This power being coupled with an interest, is irrevocable so long as any Obligations remains unpaid. 8. No delay or failure on the Noteholders' part in exercising any right, privilege or option hereunder shall operate as a waiver of such or of any other right, privilege, remedy or option, and no waiver whatever shall be valid unless in writing, signed by each Noteholder and then only to the extent therein set forth, and no waiver by the Noteholders of any default shall operate as a waiver of any other default or of the same default on a future occasion. The Noteholders' books and records containing entries with respect to the Obligations shall be admissible in evidence in any action or proceeding, shall be binding upon each Assignor for the purpose of establishing the items therein set forth and shall constitute prima facie proof thereof (in the absence of manifest error or fraud). The Noteholders shall have the right to enforce any one or more of the remedies available to the Noteholders, successively, alternately or concurrently. Each Assignor agrees to join with the Noteholders in executing financing statements or other instruments to the extent required by the Uniform Commercial Code in form satisfactory to the Noteholders and in executing such other documents or instruments as may be required or deemed necessary by the Noteholders for the purposes of affecting or continuing the Noteholders' security interest in the Collateral. 7 9. This Master Security Agreement shall be governed by and construed in accordance with the laws of the State of New York and cannot be terminated orally. All of the rights, remedies, options, privileges and elections given to the Noteholders hereunder shall inure to the benefit of each Noteholder's successors and assigns. Except as set forth below in this Section 9, any and all disputes, controversies and claims that any Assignor may assert against a Noteholder arising out of or relating to this Master Security Agreement or any other Document shall be determined exclusively by arbitration (each such arbitration, an "Arbitration") in New York City before a panel of three neutral arbitrators agreed to by Laurus and the Company (collectively, the "Arbitrators") in accordance with and pursuant to the then existing commercial arbitration rules of the American Arbitration Association. Each Assignor hereby irrevocably waives any right to assert such claims in any other forum. The Arbitrators shall have the power in their discretion to award specific performance or injunctive relief (but shall not have the power to render any incidental, special or punitive damages) and reasonable attorneys' fees and expenses to any party in any arbitration. The Arbitrators may not change, modify or alter any express condition, term or provision of this Master Security Agreement or of any other Document nor shall they have the power to render any award against the Noteholder that would have such effect. Each Arbitration award shall be final and binding upon the parties subject thereto and judgment may be entered thereon in any court of competent jurisdiction. The service of any notice, process, motion or other document in connection with an Arbitration or for the enforcement of any Arbitration award may be made in the same manner as communications may be given under Section 10 hereof. Notwithstanding the foregoing, no provisions of this Section 9 nor any other provision contained in this Master Security Agreement or in any other Document shall limit in any manner whatsoever the Noteholders' right to commence an action against or in connection with any Assignor or their respective properties in any court of competent jurisdiction or otherwise utilize judicial process in connection with or arising out of the Noteholders' rights and remedies under this Master Security Agreement and/or any other Document or otherwise (any such action, a "Court Action"). Court Actions may be brought by the Noteholders in any state or federal court of competent jurisdiction and each Assignor irrevocably submits to the jurisdiction of such state and federal courts and irrevocably waives any claim or defense of inconvenient forum or lack of personal jurisdiction in such forum or right of removal or right to jury trial under any applicable law or decision or otherwise. Service of any notice, process, motion or other document in connection with a Court Action may be made in the same manner as communications may be given under Section 10. In addition, the Noteholders may serve process in any other manner permitted under applicable law. 10. All notices from a Noteholder to any Assignor shall be sufficiently given if mailed or delivered to such Assignor's address set forth below. 11. It is understood and agreed that any person or entity that desires to become an Assignor hereunder, or is required to execute a counterpart of this Master Security Agreement after the date hereof pursuant to the requirements of any Document, shall become an Assignor hereunder by (x) executing a Joinder Agreement in form and substance satisfactory to the Noteholders, (y) delivering supplements to such exhibits and annexes to such Documents as Laurus shall reasonably request and (z) taking all actions as specified in this Master Security Agreement as would have been taken by such Assignor had it been an original party to this Master Security Agreement, in each case with all documents required above to be delivered to the Noteholders and with all documents and actions required above to be taken to the reasonable satisfaction of the Noteholders. 8 12. Notwithstanding anything to the contrary contained in this Master Security Agreement, the terms and conditions of this Master Security Agreement shall be subject in all respects to the terms and conditions of the Intercreditor Agreement. In the event that the terms and conditions of this Master Security Agreement are in contravention of the terms and conditions of the Intercreditor Agreement, the terms and conditions of the Intercreditor Agreement shall prevail. No provision of this Master Security Agreement shall be amended, modified, supplemented, restated, terminated or waived in any respect except by a writing duly executed by each Assignor, each Noteholder and Laurus. [The remainder of this page is intentionally left blank] 9 Very truly yours, VOXX CORPORATION By: /s/ Ilene Kaminsky ---------------------------------- Name: Ilene Kaminsky Title: CEO Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 EPIXTAR MARKETING CORP. By: /s/ Ilene Kaminsky ---------------------------------- Name: Ilene Kaminsky Title: CEO Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 EPIXTAR INTERNATIONAL CONTACT CENTER GROUP, INC. By: /s/Ilene Kaminsky ---------------------------------- Name: Ilene Kaminsky Title: CEO Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 10 ACKNOWLEDGED: Sands Brothers Venture Capital LLC Sands Brothers Venture Capital II LLC Sands Brothers Venture Capital III LLC Sands Brothers Venture Capital IV LLC By: /s/ Authorized Officer ---------------------------------- Name: Steven Sands Title: Manager 11 SCHEDULE A - -------------------------------------------------------------------------------- Organization Jurisdiction of Identification Entity Organization Number - -------------------------------------------------------------------------------- Voxx Corporation Florida - -------------------------------------------------------------------------------- Epixtar Marketing Florida Corp. - -------------------------------------------------------------------------------- Epixtar Delaware International Contact Center Group, Inc. - -------------------------------------------------------------------------------- SCHEDULE B Permitted Liens EX-4.13.15 16 b406530ex4_13-15.txt EXHIBIT 4.13.15 EXHIBIT 4.13.15 THIS NOTE (THE "NOTE") AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO EPIXTAR CORP. AND/OR VOXX CORPORATION, AS APPLICABLE, THAT SUCH REGISTRATION IS NOT REQUIRED. SECURED CONVERTIBLE TERM NOTE FOR VALUE RECEIVED, EPIXTAR CORP., a Florida corporation ("EPXR"), and VOXX CORPORATION, a Florida corporation ("VOXX") (EPXR and VOXX, collectively, the "BORROWER"), jointly and severally hereby promise to pay to Sands Brothers Venture Capital LLC (the "HOLDER") or its registered assigns or successors in interest the sum of One Hundred Thousand Dollars ($100,000), together with any accrued and unpaid interest hereon, on April 29, 2008 (the "MATURITY DATE") if not sooner paid. Capitalized terms used herein without definition shall have the meanings ascribed to such terms in that certain Securities Purchase Agreement dated as of the date hereof between the Borrower and the Holder (the "PURCHASE AGREEMENT"). The following terms shall apply to this Note: ARTICLE I INTEREST & AMORTIZATION 1.1 Interest Rate. Subject to Sections 4.11 and 5.6 hereof, interest payable on this Note shall accrue at a rate per annum (the "Interest Rate") equal to the "prime rate" published in The Wall Street Journal from time to time, plus two percent (2.00%). The prime rate shall be increased or decreased as the case may be for each increase or decrease in the prime rate in an amount equal to such increase or decrease in the prime rate; each change to be effective as of the day of the change in such rate. Interest shall be (i) calculated on the basis of a 360 day year and payable monthly, in arrears, commencing on June 1, 2005 and on the first business day of each consecutive calendar month thereafter until the Maturity Date (and on the Maturity Date), whether by acceleration or otherwise (each, a "REPAYMENT DATE"). 1.2 Minimum Monthly Principal Payments. Amortizing payments of the aggregate principal amount outstanding under this Note at any time (the "PRINCIPAL AMOUNT") shall begin on November 1, 2005 and shall recur on the first business day of each succeeding month thereafter until the Maturity Date (each, an "AMORTIZATION DATE"). Subject to Article 3 below, beginning on the first Amortization Date, the Borrower shall make monthly payments to the Holder on each Repayment Date, each in the amount of $2,380.95 (the "MONTHLY PRINCIPAL AMOUNT"), together with any accrued and unpaid interest to date on such portion of the Principal Amount (as defined below) plus any and all other amounts which are then owing under this Note, the Purchase Agreement or any other Related Agreement but have not been paid (the Monthly Principal Amount, together with such accrued and unpaid interest and such other amounts, collectively, the "MONTHLY AMOUNT"). Any Principal Amount that remains outstanding on the Maturity Date shall be due and payable on the Maturity Date. ARTICLE II CONVERSION REPAYMENT 2.1 Payment of Monthly Amount in Cash or Common Stock. (a) If the Monthly Amount is required to be paid in shares of Common Stock (as defined below) pursuant to Section 2.1(b), each month by the fifth (5th) business day prior to each Amortization Date (the "NOTICE DATE"), the Holder shall, subject to Section 2.2 below and the other provisions of this Note, deliver to Borrower a written notice in the form of Exhibit B attached hereto converting the Monthly Amount payable on the next Amortization Date or Repayment Date, as the case may be, into freely tradable unrestricted shares of common stock of EPXR ("EPXR Common Stock") or, following the satisfaction of each of the conditions set forth in clause (i) of Section 2.2 below, into freely tradable unrestricted shares of common stock of VOXX ("VOXX Common Stock") (EPXR Common Stock and VOXX Common Stock, collectively, the "Common Stock")(each, a "REPAYMENT NOTICE"). If a Repayment Notice is not delivered by the Holder on or before the applicable Notice Date for such Amortization Date (or is not required to be delivered in accordance with Section 2.1(b)), then the Borrower shall pay the Monthly Amount due on such Amortization Date in cash. Any portion of the Monthly Amount paid in cash on an Amortization Date or Repayment Date, as the case may be, shall be paid to the Holder in an amount equal to 102% of the principal portion of the Monthly Amount otherwise due and owing to Holder on such Amortization Date or Repayment Date. If the Holder converts all or a portion of the Monthly Amount in shares of Common Stock as provided herein, the number of such shares to be issued by the Borrower to the Holder on such Amortization Date or Repayment Date, as the case may be, shall be the number determined by dividing (x) the portion of the Monthly Amount to be paid in shares of Common Stock, by (y) the then applicable Fixed Conversion Price. For purposes hereof, the "FIXED CONVERSION PRICE" shall, subject to further adjustment as provided herein, mean (x) in the case of a conversion into EPXR Common Stock, $1.00 and (y) in the case of a conversion into VOXX Common Stock on or after the date of the consummation of an initial public offering of the VOXX Common Stock (the "VOXX IPO Date"), a price equal to 85% of the offering price of the VOXX Common Stock on the VOXX IPO Date (after giving effect thereto). (b) Monthly Amount Conversion Guidelines. Subject to Sections 2.1(a), 2.2, and 3.2 hereof, the Holder shall convert all or a portion of the Monthly Amount due on each Repayment Date in shares of Common Stock if the average closing price of the Common Stock as reported by Bloomberg, L.P. on the Principal Market for the five (5) trading days immediately preceding such Repayment Date was greater than or equal to 110% of the Fixed Conversion Price, provided, however, that such conversions shall not exceed twenty five percent (25%) of the aggregate dollar trading volume of the Common Stock for the five (5) day trading period immediately preceding delivery of a Notice of Conversion to the Borrower. Any part of the Monthly Amount due on a Amortization Date or Repayment Date, as the case may be, that the Holder has not converted into shares of Common Stock shall be paid by the Borrower in cash on such Amortization Date or Repayment Date. Any part of the Monthly Amount due on such Amortization Date or Repayment Date which must be paid in cash (as a result of the closing price of the Common Stock on one or more of the five (5) trading days preceding the applicable Amortization Date or Repayment Date being less than 110% of the Fixed Conversion Price) shall be paid in cash at the rate of 102% of the Monthly Amount otherwise due on such Amortization Date or Repayment Date, within three (3) business days of the applicable Amortization Date or Repayment Date. 2.2 No Effective Registration. Notwithstanding anything to the contrary herein, unless the Holder, in its sole discretion, shall request otherwise, none of the Borrower's obligations to pay the Monthly Amount to the Holder may be converted into VOXX Common Stock or EPXR Common Stock unless and until (i) in the case of conversion into VOXX Common Stock, either (I) (a) VOXX shall have consummated an initial public offering, (b) VOXX Common Stock shall be publicly traded on a nationally recognized exchange; and (c) the shares underlying the conversion of this Note into VOXX Common Stock pursuant to the terms hereof shall have been registered on an effective, current Registration Statement (as defined in the Registration Rights Agreement) or (II) an exemption from registration of the EPXR Common Stock (with respect to the resale of such common stock) is available to pursuant to Rule 144 of the Securities Act; (ii) in the case of conversion into EPXR Common Stock, (a) the shares underlying the conversion of this Note into EPXR Common Stock pursuant to the terms hereof shall have been registered on an effective, current Registration Statement; or (b) an exemption from registration of the EPXR Common Stock (with respect to the resale of such common stock) is available to pursuant to Rule 144 of the Securities Act and (III) in each of the foregoing cases, no Event of Default hereunder or under any Related Agreement exists and is continuing, unless such Event of Default is cured within any applicable cure period or is otherwise waived in writing by the Holder in whole or in part at the Holder's option. 2.3 Optional Redemption in Cash. The Borrower will have the option of prepaying this Note ("OPTIONAL REDEMPTION") by paying to the Holder a sum of money equal to one hundred thirty percent (130%) of the outstanding principal amount of this Note at the time of prepayment, together with accrued but unpaid interest thereon and any and all other sums due, accrued or payable to the Holder arising under this Note, the Purchase Agreement or any Related Agreement (the "REDEMPTION AMOUNT") outstanding on the day written notice of redemption (the "NOTICE OF REDEMPTION") is given to the Holder. The Notice of Redemption shall specify the date for such Optional Redemption (the "REDEMPTION PAYMENT DATE") which date shall be seven (7) business days after the date of the Notice of Redemption (the "REDEMPTION PERIOD"). A Notice of Redemption shall not be effective with respect to any portion of this Note for which the Holder has a pending election to convert pursuant to Section 3.1, or for conversions initiated or made by the Holder pursuant to Section 3.1 during the Redemption Period. The Redemption Amount shall be determined as if such Holder's conversion elections had been completed immediately prior to the date of the Notice of Redemption. On the Redemption Payment Date, the Redemption Amount must be paid in good funds to the Holder. In the event the Borrower fails to pay the Redemption Amount on the Redemption Payment Date as set forth herein, then such Redemption Notice will be null and void. ARTICLE III CONVERSION RIGHTS 3.1. Holder's Conversion Rights. The Holder shall have the right, but not the obligation, to convert at any time all or any portion of the then aggregate outstanding principal amount of this Note, together with interest and fees due hereon, into shares of Common Stock subject to the terms and conditions set forth in this Article III. The Holder may exercise such right by delivery to the Borrower of a written notice of conversion not less than one (1) day prior to the date upon which such conversion shall occur. 63.1 3.2 This Section left intentionally blank. 63.2 63.3 3.3 Mechanics of Holder's Conversion. (a) In the event that the Holder elects to convert this Note into Common Stock, the Holder shall give notice of such election by delivering an executed and completed notice of conversion ("NOTICE OF CONVERSION") to the Borrower and such Notice of Conversion shall provide a breakdown in reasonable detail of the Principal Amount, accrued interest and fees being converted. On each Conversion Date (as hereinafter defined) and in accordance with its Notice of Conversion, the Holder shall make the appropriate reduction to the Principal Amount, accrued interest and fees as entered in its records and shall provide written notice thereof to the Borrower within two (2) business days after the Conversion Date. Each date on which a Notice of Conversion is delivered or telecopied to the Borrower in accordance with the provisions hereof shall be deemed a Conversion Date (the "CONVERSION DATE"). A form of Notice of Conversion to be employed by the Holder is annexed hereto as Exhibit A. 63.4 (b) Pursuant to the terms of the Notice of Conversion, the Borrower will issue instructions to the transfer agent accompanied by an opinion of counsel within two (2) business day of the date of the delivery to Borrower of the Notice of Conversion and shall cause the transfer agent to transmit the certificates representing the Conversion Shares to the Holder by crediting the account of the Holder's designated broker with the Depository Trust Corporation ("DTC") through its Deposit Withdrawal Agent Commission ("DWAC") system within three (3) business days after receipt by the Borrower of the Notice of Conversion (the "DELIVERY DATE"). In the case of the exercise of the conversion rights set forth herein the conversion privilege shall be deemed to have been exercised and the Conversion Shares issuable upon such conversion shall be deemed to have been issued upon the date of receipt by the Borrower of the Notice of Conversion. The Holder shall be treated for all purposes as the record holder of such Common Stock, unless the Holder provides the Borrower written instructions to the contrary. 3.4 Conversion Mechanics. (a) The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing that portion of the principal and interest and fees to be converted, if any, by the then applicable Fixed Conversion Price. In the event of any conversions of outstanding principal amount under this Note in part pursuant to this Article III, such conversions shall be deemed to constitute conversions of outstanding principal amount applying to Monthly Amounts for the remaining Amortization Dates in chronological order. (b) The Fixed Conversion Price and number and kind of shares or other securities to be issued upon conversion is subject to adjustment from time to time upon the occurrence of certain events, as follows: A. Stock Splits, Combinations and Dividends. If the shares of Common Stock are subdivided or combined into a greater or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock in shares of Common Stock, the Fixed Conversion Price, , shall be proportionately reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event. B. During the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the full conversion of this Note. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. The Borrower agrees that its issuance of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note. C. Share Issuances. Subject to the provisions of this Section 3.4, if the Borrower shall (x) in the case of EPXR Common Stock, at any time prior to the conversion or repayment in full of the Principal Amount and (y) in the case of VOXX Common Stock at any time after the consummation of an initial public offering of the VOXX Common Stock and prior to the conversion or repayment in full of the Principal Amount, issue any shares of Common Stock or securities convertible into Common Stock to a person other than the Holder (except (i) pursuant to Subsections A or B above; (ii) pursuant to options, warrants, or other obligations to issue shares outstanding on the date hereof as disclosed to Holder in writing; or (iii) pursuant to options that may be issued under any employee incentive stock option and/or any qualified stock option plan adopted by the Borrower) for a consideration per share (the "Offer Price") less than the Fixed Conversion Price in effect at the time of such issuance (and such issuance, an "Offering"), then the Fixed Conversion Price shall be immediately reset to such lower Offer Price at the time of issuance of such securities pursuant to the formula below. For purposes hereof, the issuance of any security of the Borrower convertible into or exercisable or exchangeable for Common Stock shall result in an adjustment to the Fixed Conversion Price at the time of issuance of such securities. If the Borrower issues any additional shares pursuant to Section 3.4 above then, and thereafter successively upon each such issue, the Fixed Conversion Price shall be adjusted by multiplying the then applicable Fixed Conversion Price by the following fraction: ------------------------------------- A + B ------------------------------------- (A + B) + [((C - D) x B) /C] ------------------------------------- A = Total amount of shares convertible pursuant to this Note, the Purchase Agreement and the Related Agreements. B = Actual shares sold in the Offering C = Fixed Conversion Price D = Offering price D. Reclassification, etc. If the Borrower at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes, this Note, as to the unpaid Principal Amount and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change. 3.5 Issuance of New Note. Upon any partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Borrower to the Holder for the principal balance of this Note and interest which shall not have been converted or paid. The Borrower will pay no costs, fees or any other consideration to the Holder for the production and issuance of a new Note. ARTICLE IV EVENTS OF DEFAULT Upon the occurrence and continuance of an Event of Default beyond any applicable grace period, the Holder may make all sums of principal, interest and other fees then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable. In the event of such an acceleration, the amount due and owing to the Holder shall be 110% of the outstanding principal amount of the Note (plus accrued and unpaid interest and fees, if any) (the "DEFAULT PAYMENT"). If, with respect to any Event of Default, the Borrower cures the Event of Default, the Event of Default will be deemed to no longer exist and any rights and remedies of Holder pertaining to such Event of Default will be of no further force or effect. The Default Payment shall be applied first to any fees due and payable to Holder pursuant to this Note, the Purchase Agreement or the other Related Agreements, then to accrued and unpaid interest due on this Note and then to outstanding principal balance of this Note. The occurrence of any of the following events set forth in Sections 4.1 through 4.12, inclusive, is an "EVENT OF DEFAULT": 4.1 Failure to Pay Principal, Interest or other Fees. The Borrower fails to pay when due any installment of principal, interest or other fees hereon in accordance herewith, and in any such case, such failure shall continue for a period of five (5) days following the date upon which any such payment was due. 4.2 Breach of Covenant. The Borrower breaches any covenant or any other term or condition of this Note or the Purchase Agreement in any material respect, or the Borrower or any of its Subsidiaries breaches any covenant or any other term or condition of any Related Agreement in any material respect and, any such case, such breach, if subject to cure, continues for a period of thirty (30) days after the occurrence thereof. 4.3 Breach of Representations and Warranties. Any representation or warranty made by the Borrower in this Note or the Purchase Agreement, or by the Borrower or any of its Subsidiaries in any Related Agreement, shall, in any such case, be false or misleading in any material respect on the date that such representation or warranty was made or deemed made. 4.4 Receiver or Trustee. The Borrower or any of its Subsidiaries shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed. 4.5 Judgments. Any money judgment, writ or similar final process shall be entered or filed against the Borrower or any of its Subsidiaries or any of their respective property or other assets for more than $150,000, and shall remain unvacated, unbonded or unstayed for a period of thirty (30) days. 4.6 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any of its Subsidiaries and if commenced against the Borrower or any such Subsidiary shall not be dismissed within forty-five (45) days. 4.7 Stop Trade. An SEC stop trade order or Principal Market trading suspension of the Common Stock shall be in effect for five (5) consecutive days or five (5) days during a period of ten (10) consecutive days, excluding in all cases a suspension of all trading on a Principal Market, provided that the Borrower shall not have been able to cure such trading suspension within thirty (30) days of the notice thereof or list the Common Stock on another Principal Market within sixty (60) days of such notice. The "Principal Market" for the Common Stock shall include the NASD OTC Bulletin Board, NASDAQ SmallCap Market, NASDAQ National Market System, American Stock Exchange, or New York Stock Exchange (whichever of the foregoing is at the time the principal trading exchange or market for the Common Stock, or any securities exchange or other securities market on which the Common Stock is then being listed or traded. 4.8 Failure to Deliver Common Stock or Replacement Note. The Borrower shall fail (i) to timely deliver Common Stock to the Holder pursuant to and in the form required by this Note, and Section 9 of the Purchase Agreement, if such failure to timely deliver Common Stock shall not be cured within two (2) business days or (ii) to deliver a replacement Note to Holder within seven (7) business days following the required date of such issuance pursuant to this Note, the Purchase Agreement or any Related Agreement (to the extent required under such agreements). 4.13 Default Under Related Agreements or Other Agreements. The occurrence and continuance of any Event of Default (as defined in any Related Agreement) or any event of default (or similar term) under any other indebtedness. 4.14 Change in Control. A Change of Control (as defined below) shall occur with respect to the Company, unless Holder shall have expressly consented to such Change of Control in writing. A "Change of Control" shall mean any event or circumstance as a result of which (i) any "Person" or "group" (as such terms are defined in Sections 13(d) and 14(d) of the Exchange Act, as in effect on the date hereof), other than the Holder, is or becomes the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 35% or more on a fully diluted basis of the then outstanding voting equity interest of EPXR, (ii) the Board of Directors of EPXR shall cease to consist of a majority of the Board of Directors of EPXR on the date hereof (or directors appointed by a majority of the Board of Directors of EPXR in effect immediately prior to such appointment), (iii) EPXR sells all or any part of the equity interests of, or all or substantially all of the assets of, Voxx or any of its Subsidiaries prior to the consummation of an initial public offering of the VOXX Common Stock or (iv) Voxx or any of its Subsidiaries merges or consolidates with, or sells or transfers all or substantially all of its assets to, any other person or entity; provided that (i) any Subsidiary of Voxx may merge or consolidate with any other Subsidiary of Voxx so long as the surviving entity in any such merger or consolidation is a Subsidiary of Voxx that is party to the Master Security Agreement, the Guaranty and the Stock Pledge Agreement and (ii) any Subsidiary of Voxx may sell or transfer all or substantially all of its assets to any person or entity that is party to the Master Security Agreement, the Guaranty and the Stock Pledge Agreement. Notwithstanding the foregoing contained in this Section 4.10, it is contemplated that Voxx and its subsidiaries will consummate an initial public offering of its common stock and it is hereby acknowledged and agreed to by Holder that such an initial public offering will not constitute an Event of Default under this 4.10. 4.15 Federal Trade Commission Action. The Federal Trade Commission or any other governmental agency shall commence any action against the Borrower or any or its Subsidiaries, the effect of any such action, or any judgment, order or settlement resulting therefrom, on the Borrower or any such Subsidiary is to restrain or deprive the Borrower and its Subsidiaries from utilizing any substantial portion of their assets determined on a consolidated basis. 4.16 Cross-Default. An Event of Default, under and as defined in any of (i) any Secured Convertible Term Note, dated the date hereof, issued by EPXR and Voxx to Laurus (as amended, modified or supplemented from time to time, the "2005 Notes"), (ii) the Laurus Securities Purchase Agreement or (iii) the Related Agreements referred to in the Laurus Securities Purchase Agreement, shall have occurred and be continuing. DEFAULT RELATED PROVISIONS 4.12 Payment Grace Period. Following the occurrence and continuance of an Event of Default beyond any applicable cure period hereunder, the Borrower shall pay the Holder a default interest rate of two percent (2%) per month on all amounts due and owing under the Note, which default interest shall be payable upon demand. 4.13 Conversion Privileges. The conversion privileges set forth in Article III shall remain in full force and effect immediately from the date hereof and until this Note is paid in full. 4.14 Cumulative Remedies. The remedies under this Note shall be cumulative. ARTICLE V MISCELLANEOUS 5.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available. 5.2 Notices. Any notice herein required or permitted to be given shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Borrower at the address provided in the Purchase Agreement executed in connection herewith, and to the Holder at the address provided in the Purchase Agreement for such Holder, with a copy to John E. Tucker, Esq., 825 Third Avenue, 14th Floor, New York, New York 10022, facsimile number (212) 541-4434, or at such other address as the Borrower or the Holder may designate by ten days advance written notice to the other parties hereto. A Notice of Conversion shall be deemed given when made to the Borrower pursuant to the Purchase Agreement. 5.3 Amendment Provision. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented, and any successor instrument issued pursuant to Section 3.5 hereof, as it may be amended or supplemented. 5.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns, and may be assigned by the Holder in accordance with the requirements of the Purchase Agreement. This Note shall not be assigned by the Borrower without the consent of the Holder. 5.5 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. Except as set forth below in this Section 5.5, any and all disputes, controversies and claims that the Borrower or any of its Subsidiaries may assert against the Holder arising out of or relating to this Note, the Purchase Agreement or any other Related Agreement shall be determined exclusively by arbitration (each such arbitration, an "Arbitration") in New York City before a panel of three neutral arbitrators agreed to by the Holder and the Borrower (collectively, the "Arbitrators") in accordance with and pursuant to the then existing commercial arbitration rules of the American Arbitration Association. The Borrower (on its behalf and on behalf of its subsidiaries) hereby irrevocably waives any right to assert such claims in any other forum. The Arbitrators shall have the power in their discretion to award specific performance or injunctive relief (but shall not have the power to render any incidental, special or punitive damages) and reasonable attorneys' fees and expenses to any party in any arbitration. The Arbitrators may not change, modify or alter any express condition, term or provision of this Note, the Purchase Agreement or of any other Related Agreement nor shall they have the power to render any award against the Holder that would have such effect. Each Arbitration award shall be final and binding upon the parties subject thereto and judgment may be entered thereon in any court of competent jurisdiction. The service of any notice, process, motion or other document in connection with an Arbitration or for the enforcement of any Arbitration award may be made in the same manner as communications may be given under Section 5.2 hereof. Notwithstanding the foregoing, the provisions of this Section 5.5 nor any other provision contained in this Note, the Purchase Agreement or in any other Related Agreement shall limit in any manner whatsoever the Holder's right to commence an action against or in connection with the Borrower, any of its Subsidiaries or their respective properties in any court of competent jurisdiction or otherwise utilize judicial process in connection with or arising out of the Holder's rights and remedies under this Note, the Purchase Agreement and/or any Related Agreement or otherwise (any such action, a "Court Action"). Court Actions may be brought by the Holder in any state or federal court of competent jurisdiction and the Borrower (on its behalf and on behalf of its Subsidiaries) irrevocably submits to the jurisdiction of such state and federal courts and irrevocably waives any claim or defense of inconvenient forum or lack of personal jurisdiction in such forum or right of removal or right to jury trial under any applicable law or decision or otherwise. Service of any notice, process, motion or other document in connection with a Court Action may be made in the same manner as communications may be given under Section 5.2. In addition, the Holder may serve process in any other manner permitted under applicable law. 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 Note 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 unenforceability of any other provision of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Borrower in any other jurisdiction to collect on the Borrower's obligations to Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court in favor of the Holder. 5.6 Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower. 5.7 Security Interest and Guarantee. The Holder has been granted a security interest (i) in certain assets of VOXX and its Subsidiaries as more fully described in the Master Security Agreement dated as of the date hereof and (ii) pursuant to the Stock Pledge Agreement dated as of the date hereof. The Obligations of the Borrower under this Note are guaranteed pursuant to the Guaranty dated as of the date hereof. 5.11 Construction. Each party acknowledges that its legal counsel participated in the preparation of this Note 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 Note to favor any party against the other. 5.12 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay to Holder reasonable costs of collection, including reasonable attorney's fees. 5.13 Joint and Several Obligations. All obligations of VOXX and EPXR as co-borrowers under this Note and the Related Agreements (the "Obligations") shall be joint and several obligations, and the Borrower shall make payment upon the maturity of the Obligations by acceleration or otherwise, and such obligation and liability on the part of the Borrower shall in no way be affected by any extensions, renewals and forbearance granted by the Holder to the Borrower, failure of Holder to give either EPXR or VOXX any notice, any failure of Holder to pursue to preserve its rights against either EPXR and/or VOXX, the release by Holder of any collateral now or thereafter acquired from either EPXR, VOXX and/or any other subsidiary of EPXR, and such agreement by each of EPXR and VOXX to pay upon any notice issued pursuant thereto is unconditional and unaffected by prior recourse by Holder to either EPXR, VOXX, or any other subsidiary of EPXR or any collateral for the Obligations or the lack thereof. Each of EPXR and VOXX expressly waives any and all rights of subrogation, reimbursement, indemnity, exoneration, contribution or any other claim which each of EPXR and/or VOXX may now or hereafter have against the other or other person or entity directly or contingently liable for the Obligations, or against or with respect to any other's property (including, without limitation, any property which is collateral for the Obligations), arising from the existence or performance of this Note, the Purchase Agreement or any other Related Agreement, until all Obligations have been indefeasibly paid in full and this Note, the Purchase Agreement and the other Related Agreements have been irrevocably terminated. [Balance of page intentionally left blank; signature page follows.] IN WITNESS WHEREOF, the Borrower has caused this Convertible Term Note to be signed in its name effective as of this ___ day of April, (2005.) EPIXTAR CORP. By: /s/ Ilene Kaminsky --------------------- Name: Ilene Kaminsky -------------- Title: CEO ---- WITNESS: /s/ Authorized officer - ---------------------- VOXX CORPORATION By:/s/ Ilene Kaminsky --------------------- Name: Ilene Kaminsky -------------- Title: CEO ---- WITNESS: /s/ Authorized Officer - ---------------------- EXHIBIT A NOTICE OF CONVERSION (To be executed by the Holder in order to convert all or part of the Note into Common Stock [Name and Address of Holder] The Undersigned hereby converts $_________ of the principal due on [specify applicable Repayment Date] under the Convertible Term Note issued by Epixtar Corp. and Voxx Corporation dated __________ __, 2005 by delivery of Shares of Common Stock of Epixtar Corp. or Voxx Corporation, as applicable, on and subject to the conditions set forth in Article III of such Note. (1.) Date of Conversion _______________________ (2.) Shares To Be Delivered: _______________________ By:______________________________ Name:____________________________ Title:___________________________ EXHIBIT B CONVERSION NOTICE (To be executed by the Holder in order to convert all or part of a Monthly Amount into Common Stock) [Name and Address of Holder] Holder hereby converts $_________ of the Monthly Amount due on [specify applicable Repayment Date] under the Convertible Term Note issued by Epixtar Corp. and Voxx Corporation dated ____________ __, 2005 by delivery of Shares of Common Stock of Epixtar Corp. or Voxx Corporation, as applicable, on and subject to the conditions set forth in Article III of such Note. 1. Fixed Conversion Price: $_______________________ 2. Amount to be paid: $_______________________ 3. Shares To Be Delivered (2 divided by 1): __________________ 4. Cash payment to be made by Borrower : $_____________________ Date: ____________ Sands Brothers Venture Capital LLC By:______________________________ Name:____________________________ Title:___________________________ EX-4.13.16 17 b406530ex4_13-16.txt EXHIBIT 4.13.16 EXHIBIT 4.13.16 THIS NOTE (THE "NOTE") AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO EPIXTAR CORP. AND/OR VOXX CORPORATION, AS APPLICABLE, THAT SUCH REGISTRATION IS NOT REQUIRED. SECURED CONVERTIBLE TERM NOTE FOR VALUE RECEIVED, EPIXTAR CORP., a Florida corporation ("EPXR"), and VOXX CORPORATION, a Florida corporation ("VOXX") (EPXR and VOXX, collectively, the "BORROWER"), jointly and severally hereby promise to pay to Sands Brothers Venture Capital II LLC (the "HOLDER") or its registered assigns or successors in interest the sum of Fifty Thousand Dollars ($50,000), together with any accrued and unpaid interest hereon, on April 29, 2008 (the "MATURITY DATE") if not sooner paid. Capitalized terms used herein without definition shall have the meanings ascribed to such terms in that certain Securities Purchase Agreement dated as of the date hereof between the Borrower and the Holder (the "PURCHASE AGREEMENT"). The following terms shall apply to this Note: ARTICLE I INTEREST & AMORTIZATION 1.1 Interest Rate. Subject to Sections 4.11 and 5.6 hereof, interest payable on this Note shall accrue at a rate per annum (the "Interest Rate") equal to the "prime rate" published in The Wall Street Journal from time to time, plus two percent (2.00%). The prime rate shall be increased or decreased as the case may be for each increase or decrease in the prime rate in an amount equal to such increase or decrease in the prime rate; each change to be effective as of the day of the change in such rate. Interest shall be (i) calculated on the basis of a 360 day year and payable monthly, in arrears, commencing on June 1, 2005 and on the first business day of each consecutive calendar month thereafter until the Maturity Date (and on the Maturity Date), whether by acceleration or otherwise (each, a "REPAYMENT DATE"). 1.2 Minimum Monthly Principal Payments. Amortizing payments of the aggregate principal amount outstanding under this Note at any time (the "PRINCIPAL AMOUNT") shall begin on November 1, 2005 and shall recur on the first business day of each succeeding month thereafter until the Maturity Date (each, an "AMORTIZATION DATE"). Subject to Article 3 below, beginning on the first Amortization Date, the Borrower shall make monthly payments to the Holder on each Repayment Date, each in the amount of $1,190.48 (the "MONTHLY PRINCIPAL AMOUNT"), together with any accrued and unpaid interest to date on such portion of the Principal Amount (as defined below) plus any and all other amounts which are then owing under this Note, the Purchase Agreement or any other Related Agreement but have not been paid (the Monthly Principal Amount, together with such accrued and unpaid interest and such other amounts, collectively, the "MONTHLY AMOUNT"). Any Principal Amount that remains outstanding on the Maturity Date shall be due and payable on the Maturity Date. ARTICLE II CONVERSION REPAYMENT 2.1 Payment of Monthly Amount in Cash or Common Stock. (a) If the Monthly Amount is required to be paid in shares of Common Stock (as defined below) pursuant to Section 2.1(b), each month by the fifth (5th) business day prior to each Amortization Date (the "NOTICE DATE"), the Holder shall, subject to Section 2.2 below and the other provisions of this Note, deliver to Borrower a written notice in the form of Exhibit B attached hereto converting the Monthly Amount payable on the next Amortization Date or Repayment Date, as the case may be, into freely tradable unrestricted shares of common stock of EPXR ("EPXR Common Stock") or, following the satisfaction of each of the conditions set forth in clause (i) of Section 2.2 below, into freely tradable unrestricted shares of common stock of VOXX ("VOXX Common Stock") (EPXR Common Stock and VOXX Common Stock, collectively, the "Common Stock")(each, a "REPAYMENT NOTICE"). If a Repayment Notice is not delivered by the Holder on or before the applicable Notice Date for such Amortization Date (or is not required to be delivered in accordance with Section 2.1(b)), then the Borrower shall pay the Monthly Amount due on such Amortization Date in cash. Any portion of the Monthly Amount paid in cash on an Amortization Date or Repayment Date, as the case may be, shall be paid to the Holder in an amount equal to 102% of the principal portion of the Monthly Amount otherwise due and owing to Holder on such Amortization Date or Repayment Date. If the Holder converts all or a portion of the Monthly Amount in shares of Common Stock as provided herein, the number of such shares to be issued by the Borrower to the Holder on such Amortization Date or Repayment Date, as the case may be, shall be the number determined by dividing (x) the portion of the Monthly Amount to be paid in shares of Common Stock, by (y) the then applicable Fixed Conversion Price. For purposes hereof, the "FIXED CONVERSION PRICE" shall, subject to further adjustment as provided herein, mean (x) in the case of a conversion into EPXR Common Stock, $1.00 and (y) in the case of a conversion into VOXX Common Stock on or after the date of the consummation of an initial public offering of the VOXX Common Stock (the "VOXX IPO Date"), a price equal to 85% of the offering price of the VOXX Common Stock on the VOXX IPO Date (after giving effect thereto). (b) Monthly Amount Conversion Guidelines. Subject to Sections 2.1(a), 2.2, and 3.2 hereof, the Holder shall convert all or a portion of the Monthly Amount due on each Repayment Date in shares of Common Stock if the average closing price of the Common Stock as reported by Bloomberg, L.P. on the Principal Market for the five (5) trading days immediately preceding such Repayment Date was greater than or equal to 110% of the Fixed Conversion Price, provided, however, that such conversions shall not exceed twenty five percent (25%) of the aggregate dollar trading volume of the Common Stock for the five (5) day trading period immediately preceding delivery of a Notice of Conversion to the Borrower. Any part of the Monthly Amount due on a Amortization Date or Repayment Date, as the case may be, that the Holder has not converted into shares of Common Stock shall be paid by the Borrower in cash on such Amortization Date or Repayment Date. Any part of the Monthly Amount due on such Amortization Date or Repayment Date which must be paid in cash (as a result of the closing price of the Common Stock on one or more of the five (5) trading days preceding the applicable Amortization Date or Repayment Date being less than 110% of the Fixed Conversion Price) shall be paid in cash at the rate of 102% of the Monthly Amount otherwise due on such Amortization Date or Repayment Date, within three (3) business days of the applicable Amortization Date or Repayment Date. 2.2 No Effective Registration. Notwithstanding anything to the contrary herein, unless the Holder, in its sole discretion, shall request otherwise, none of the Borrower's obligations to pay the Monthly Amount to the Holder may be converted into VOXX Common Stock or EPXR Common Stock unless and until (i) in the case of conversion into VOXX Common Stock, either (I) (a) VOXX shall have consummated an initial public offering, (b) VOXX Common Stock shall be publicly traded on a nationally recognized exchange; and (c) the shares underlying the conversion of this Note into VOXX Common Stock pursuant to the terms hereof shall have been registered on an effective, current Registration Statement (as defined in the Registration Rights Agreement) or (II) an exemption from registration of the EPXR Common Stock (with respect to the resale of such common stock) is available to pursuant to Rule 144 of the Securities Act; (ii) in the case of conversion into EPXR Common Stock, (a) the shares underlying the conversion of this Note into EPXR Common Stock pursuant to the terms hereof shall have been registered on an effective, current Registration Statement; or (b) an exemption from registration of the EPXR Common Stock (with respect to the resale of such common stock) is available to pursuant to Rule 144 of the Securities Act and (III) in each of the foregoing cases, no Event of Default hereunder or under any Related Agreement exists and is continuing, unless such Event of Default is cured within any applicable cure period or is otherwise waived in writing by the Holder in whole or in part at the Holder's option. 2.3 Optional Redemption in Cash. The Borrower will have the option of prepaying this Note ("OPTIONAL REDEMPTION") by paying to the Holder a sum of money equal to one hundred thirty percent (130%) of the outstanding principal amount of this Note at the time of prepayment, together with accrued but unpaid interest thereon and any and all other sums due, accrued or payable to the Holder arising under this Note, the Purchase Agreement or any Related Agreement (the "REDEMPTION AMOUNT") outstanding on the day written notice of redemption (the "NOTICE OF REDEMPTION") is given to the Holder. The Notice of Redemption shall specify the date for such Optional Redemption (the "REDEMPTION PAYMENT DATE") which date shall be seven (7) business days after the date of the Notice of Redemption (the "REDEMPTION PERIOD"). A Notice of Redemption shall not be effective with respect to any portion of this Note for which the Holder has a pending election to convert pursuant to Section 3.1, or for conversions initiated or made by the Holder pursuant to Section 3.1 during the Redemption Period. The Redemption Amount shall be determined as if such Holder's conversion elections had been completed immediately prior to the date of the Notice of Redemption. On the Redemption Payment Date, the Redemption Amount must be paid in good funds to the Holder. In the event the Borrower fails to pay the Redemption Amount on the Redemption Payment Date as set forth herein, then such Redemption Notice will be null and void. ARTICLE III CONVERSION RIGHTS 3.1. Holder's Conversion Rights. The Holder shall have the right, but not the obligation, to convert at any time all or any portion of the then aggregate outstanding principal amount of this Note, together with interest and fees due hereon, into shares of Common Stock subject to the terms and conditions set forth in this Article III. The Holder may exercise such right by delivery to the Borrower of a written notice of conversion not less than one (1) day prior to the date upon which such conversion shall occur. 73.1. 3.2 This Section left intentionally blank. 73.2 73.3 3.3 Mechanics of Holder's Conversion. (a) In the event that the Holder elects to convert this Note into Common Stock, the Holder shall give notice of such election by delivering an executed and completed notice of conversion ("NOTICE OF CONVERSION") to the Borrower and such Notice of Conversion shall provide a breakdown in reasonable detail of the Principal Amount, accrued interest and fees being converted. On each Conversion Date (as hereinafter defined) and in accordance with its Notice of Conversion, the Holder shall make the appropriate reduction to the Principal Amount, accrued interest and fees as entered in its records and shall provide written notice thereof to the Borrower within two (2) business days after the Conversion Date. Each date on which a Notice of Conversion is delivered or telecopied to the Borrower in accordance with the provisions hereof shall be deemed a Conversion Date (the "CONVERSION DATE"). A form of Notice of Conversion to be employed by the Holder is annexed hereto as Exhibit A. 73.4 (b) Pursuant to the terms of the Notice of Conversion, the Borrower will issue instructions to the transfer agent accompanied by an opinion of counsel within two (2) business day of the date of the delivery to Borrower of the Notice of Conversion and shall cause the transfer agent to transmit the certificates representing the Conversion Shares to the Holder by crediting the account of the Holder's designated broker with the Depository Trust Corporation ("DTC") through its Deposit Withdrawal Agent Commission ("DWAC") system within three (3) business days after receipt by the Borrower of the Notice of Conversion (the "DELIVERY DATE"). In the case of the exercise of the conversion rights set forth herein the conversion privilege shall be deemed to have been exercised and the Conversion Shares issuable upon such conversion shall be deemed to have been issued upon the date of receipt by the Borrower of the Notice of Conversion. The Holder shall be treated for all purposes as the record holder of such Common Stock, unless the Holder provides the Borrower written instructions to the contrary. 3.4 Conversion Mechanics. (a) The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing that portion of the principal and interest and fees to be converted, if any, by the then applicable Fixed Conversion Price. In the event of any conversions of outstanding principal amount under this Note in part pursuant to this Article III, such conversions shall be deemed to constitute conversions of outstanding principal amount applying to Monthly Amounts for the remaining Amortization Dates in chronological order. (b) The Fixed Conversion Price and number and kind of shares or other securities to be issued upon conversion is subject to adjustment from time to time upon the occurrence of certain events, as follows: A. Stock Splits, Combinations and Dividends. If the shares of Common Stock are subdivided or combined into a greater or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock in shares of Common Stock, the Fixed Conversion Price shall be proportionately reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event. B. During the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the full conversion of this Note. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. The Borrower agrees that its issuance of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note. C. Share Issuances. Subject to the provisions of this Section 3.4, if the Borrower shall (x) in the case of EPXR Common Stock, at any time prior to the conversion or repayment in full of the Principal Amount and (y) in the case of VOXX Common Stock at any time after the consummation of an initial public offering of the VOXX Common Stock and prior to the conversion or repayment in full of the Principal Amount, issue any shares of Common Stock or securities convertible into Common Stock to a person other than the Holder (except (i) pursuant to Subsections A or B above; (ii) pursuant to options, warrants, or other obligations to issue shares outstanding on the date hereof as disclosed to Holder in writing; or (iii) pursuant to options that may be issued under any employee incentive stock option and/or any qualified stock option plan adopted by the Borrower) for a consideration per share (the "Offer Price") less than the Fixed Conversion Price in effect at the time of such issuance (and such issuance, an "Offering"), then the Fixed Conversion Price shall be immediately reset to such lower Offer Price at the time of issuance of such securities pursuant to the formula below. For purposes hereof, the issuance of any security of the Borrower convertible into or exercisable or exchangeable for Common Stock shall result in an adjustment to the Fixed Conversion Price at the time of issuance of such securities. If the Borrower issues any additional shares pursuant to Section 3.4 above then, and thereafter successively upon each such issue, the Fixed Conversion Price shall be adjusted by multiplying the then applicable Fixed Conversion Price by the following fraction: ---------------------------------------- A + B ---------------------------------------- (A + B) + [((C - D) x B) /C] ---------------------------------------- A = Total amount of shares convertible pursuant to this Note, the Purchase Agreement and the Related Agreements. B = Actual shares sold in the Offering C = Fixed Conversion Price D = Offering price D. Reclassification, etc. If the Borrower at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes, this Note, as to the unpaid Principal Amount and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change. 3.5 Issuance of New Note. Upon any partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Borrower to the Holder for the principal balance of this Note and interest which shall not have been converted or paid. The Borrower will pay no costs, fees or any other consideration to the Holder for the production and issuance of a new Note. ARTICLE IV EVENTS OF DEFAULT Upon the occurrence and continuance of an Event of Default beyond any applicable grace period, the Holder may make all sums of principal, interest and other fees then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable. In the event of such an acceleration, the amount due and owing to the Holder shall be 110% of the outstanding principal amount of the Note (plus accrued and unpaid interest and fees, if any) (the "DEFAULT PAYMENT"). If, with respect to any Event of Default, the Borrower cures the Event of Default, the Event of Default will be deemed to no longer exist and any rights and remedies of Holder pertaining to such Event of Default will be of no further force or effect. The Default Payment shall be applied first to any fees due and payable to Holder pursuant to this Note, the Purchase Agreement or the other Related Agreements, then to accrued and unpaid interest due on this Note and then to outstanding principal balance of this Note. The occurrence of any of the following events set forth in Sections 4.1 through 4.12, inclusive, is an "EVENT OF DEFAULT": 4.1 Failure to Pay Principal, Interest or other Fees. The Borrower fails to pay when due any installment of principal, interest or other fees hereon in accordance herewith, and in any such case, such failure shall continue for a period of five (5) days following the date upon which any such payment was due. 4.2 Breach of Covenant. The Borrower breaches any covenant or any other term or condition of this Note or the Purchase Agreement in any material respect, or the Borrower or any of its Subsidiaries breaches any covenant or any other term or condition of any Related Agreement in any material respect and, any such case, such breach, if subject to cure, continues for a period of thirty (30) days after the occurrence thereof. 4.3 Breach of Representations and Warranties. Any representation or warranty made by the Borrower in this Note or the Purchase Agreement, or by the Borrower or any of its Subsidiaries in any Related Agreement, shall, in any such case, be false or misleading in any material respect on the date that such representation or warranty was made or deemed made. 4.4 Receiver or Trustee. The Borrower or any of its Subsidiaries shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed. 4.5 Judgments. Any money judgment, writ or similar final process shall be entered or filed against the Borrower or any of its Subsidiaries or any of their respective property or other assets for more than $150,000, and shall remain unvacated, unbonded or unstayed for a period of thirty (30) days. 4.6 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any of its Subsidiaries and if commenced against the Borrower or any such Subsidiary shall not be dismissed within forty-five (45) days. 4.7 Stop Trade. An SEC stop trade order or Principal Market trading suspension of the Common Stock shall be in effect for five (5) consecutive days or five (5) days during a period of ten (10) consecutive days, excluding in all cases a suspension of all trading on a Principal Market, provided that the Borrower shall not have been able to cure such trading suspension within thirty (30) days of the notice thereof or list the Common Stock on another Principal Market within sixty (60) days of such notice. The "Principal Market" for the Common Stock shall include the NASD OTC Bulletin Board, NASDAQ SmallCap Market, NASDAQ National Market System, American Stock Exchange, or New York Stock Exchange (whichever of the foregoing is at the time the principal trading exchange or market for the Common Stock, or any securities exchange or other securities market on which the Common Stock is then being listed or traded. 4.8 Failure to Deliver Common Stock or Replacement Note. The Borrower shall fail (i) to timely deliver Common Stock to the Holder pursuant to and in the form required by this Note, and Section 9 of the Purchase Agreement, if such failure to timely deliver Common Stock shall not be cured within two (2) business days or (ii) to deliver a replacement Note to Holder within seven (7) business days following the required date of such issuance pursuant to this Note, the Purchase Agreement or any Related Agreement (to the extent required under such agreements). 4.17 Default Under Related Agreements or Other Agreements. The occurrence and continuance of any Event of Default (as defined in any Related Agreement) or any event of default (or similar term) under any other indebtedness. 4.18 Change in Control. A Change of Control (as defined below) shall occur with respect to the Company, unless Holder shall have expressly consented to such Change of Control in writing. A "Change of Control" shall mean any event or circumstance as a result of which (i) any "Person" or "group" (as such terms are defined in Sections 13(d) and 14(d) of the Exchange Act, as in effect on the date hereof), other than the Holder, is or becomes the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 35% or more on a fully diluted basis of the then outstanding voting equity interest of EPXR, (ii) the Board of Directors of EPXR shall cease to consist of a majority of the Board of Directors of EPXR on the date hereof (or directors appointed by a majority of the Board of Directors of EPXR in effect immediately prior to such appointment), (iii) EPXR sells all or any part of the equity interests of, or all or substantially all of the assets of, Voxx or any of its Subsidiaries prior to the consummation of an initial public offering of the VOXX Common Stock or (iv) Voxx or any of its Subsidiaries merges or consolidates with, or sells or transfers all or substantially all of its assets to, any other person or entity; provided that (i) any Subsidiary of Voxx may merge or consolidate with any other Subsidiary of Voxx so long as the surviving entity in any such merger or consolidation is a Subsidiary of Voxx that is party to the Master Security Agreement, the Guaranty and the Stock Pledge Agreement and (ii) any Subsidiary of Voxx may sell or transfer all or substantially all of its assets to any person or entity that is party to the Master Security Agreement, the Guaranty and the Stock Pledge Agreement. Notwithstanding the foregoing contained in this Section 4.10, it is contemplated that Voxx and its subsidiaries will consummate an initial public offering of its common stock and it is hereby acknowledged and agreed to by Holder that such an initial public offering will not constitute an Event of Default under this 4.10. 4.19 Federal Trade Commission Action. The Federal Trade Commission or any other governmental agency shall commence any action against the Borrower or any or its Subsidiaries, the effect of any such action, or any judgment, order or settlement resulting therefrom, on the Borrower or any such Subsidiary is to restrain or deprive the Borrower and its Subsidiaries from utilizing any substantial portion of their assets determined on a consolidated basis. 4.20 Cross-Default. An Event of Default, under and as defined in any of (i) any Secured Convertible Term Note, dated the date hereof, issued by EPXR and Voxx to Laurus (as amended, modified or supplemented from time to time, the "2005 Notes"), (ii) the Laurus Securities Purchase Agreement or (iii) the Related Agreements referred to in the Laurus Securities Purchase Agreement, shall have occurred and be continuing. DEFAULT RELATED PROVISIONS 4.12 Payment Grace Period. Following the occurrence and continuance of an Event of Default beyond any applicable cure period hereunder, the Borrower shall pay the Holder a default interest rate of two percent (2%) per month on all amounts due and owing under the Note, which default interest shall be payable upon demand. 4.13 Conversion Privileges. The conversion privileges set forth in Article III shall remain in full force and effect immediately from the date hereof and until this Note is paid in full. 4.14 Cumulative Remedies. The remedies under this Note shall be cumulative. ARTICLE V MISCELLANEOUS 5.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available. 5.2 Notices. Any notice herein required or permitted to be given shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Borrower at the address provided in the Purchase Agreement executed in connection herewith, and to the Holder at the address provided in the Purchase Agreement for such Holder, with a copy to John E. Tucker, Esq., 825 Third Avenue, 14th Floor, New York, New York 10022, facsimile number (212) 541-4434, or at such other address as the Borrower or the Holder may designate by ten days advance written notice to the other parties hereto. A Notice of Conversion shall be deemed given when made to the Borrower pursuant to the Purchase Agreement. 5.3 Amendment Provision. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented, and any successor instrument issued pursuant to Section 3.5 hereof, as it may be amended or supplemented. 5.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns, and may be assigned by the Holder in accordance with the requirements of the Purchase Agreement. This Note shall not be assigned by the Borrower without the consent of the Holder. 5.5 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. Except as set forth below in this Section 5.5, any and all disputes, controversies and claims that the Borrower or any of its Subsidiaries may assert against the Holder arising out of or relating to this Note, the Purchase Agreement or any other Related Agreement shall be determined exclusively by arbitration (each such arbitration, an "Arbitration") in New York City before a panel of three neutral arbitrators agreed to by the Holder and the Borrower (collectively, the "Arbitrators") in accordance with and pursuant to the then existing commercial arbitration rules of the American Arbitration Association. The Borrower (on its behalf and on behalf of its subsidiaries) hereby irrevocably waives any right to assert such claims in any other forum. The Arbitrators shall have the power in their discretion to award specific performance or injunctive relief (but shall not have the power to render any incidental, special or punitive damages) and reasonable attorneys' fees and expenses to any party in any arbitration. The Arbitrators may not change, modify or alter any express condition, term or provision of this Note, the Purchase Agreement or of any other Related Agreement nor shall they have the power to render any award against the Holder that would have such effect. Each Arbitration award shall be final and binding upon the parties subject thereto and judgment may be entered thereon in any court of competent jurisdiction. The service of any notice, process, motion or other document in connection with an Arbitration or for the enforcement of any Arbitration award may be made in the same manner as communications may be given under Section 5.2 hereof. Notwithstanding the foregoing, the provisions of this Section 5.5 nor any other provision contained in this Note, the Purchase Agreement or in any other Related Agreement shall limit in any manner whatsoever the Holder's right to commence an action against or in connection with the Borrower, any of its Subsidiaries or their respective properties in any court of competent jurisdiction or otherwise utilize judicial process in connection with or arising out of the Holder's rights and remedies under this Note, the Purchase Agreement and/or any Related Agreement or otherwise (any such action, a "Court Action"). Court Actions may be brought by the Holder in any state or federal court of competent jurisdiction and the Borrower (on its behalf and on behalf of its Subsidiaries) irrevocably submits to the jurisdiction of such state and federal courts and irrevocably waives any claim or defense of inconvenient forum or lack of personal jurisdiction in such forum or right of removal or right to jury trial under any applicable law or decision or otherwise. Service of any notice, process, motion or other document in connection with a Court Action may be made in the same manner as communications may be given under Section 5.2. In addition, the Holder may serve process in any other manner permitted under applicable law. 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 Note 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 unenforceability of any other provision of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Borrower in any other jurisdiction to collect on the Borrower's obligations to Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court in favor of the Holder. 5.6 Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower. 5.7 Security Interest and Guarantee. The Holder has been granted a security interest (i) in certain assets of VOXX and its Subsidiaries as more fully described in the Master Security Agreement dated as of the date hereof and (ii) pursuant to the Stock Pledge Agreement dated as of the date hereof. The Obligations of the Borrower under this Note are guaranteed pursuant to the Guaranty dated as of the date hereof. 5.14 Construction. Each party acknowledges that its legal counsel participated in the preparation of this Note 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 Note to favor any party against the other. 5.15 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay to Holder reasonable costs of collection, including reasonable attorney's fees. 5.16 Joint and Several Obligations. All obligations of VOXX and EPXR as co-borrowers under this Note and the Related Agreements (the "Obligations") shall be joint and several obligations, and the Borrower shall make payment upon the maturity of the Obligations by acceleration or otherwise, and such obligation and liability on the part of the Borrower shall in no way be affected by any extensions, renewals and forbearance granted by the Holder to the Borrower, failure of Holder to give either EPXR or VOXX any notice, any failure of Holder to pursue to preserve its rights against either EPXR and/or VOXX, the release by Holder of any collateral now or thereafter acquired from either EPXR, VOXX and/or any other subsidiary of EPXR, and such agreement by each of EPXR and VOXX to pay upon any notice issued pursuant thereto is unconditional and unaffected by prior recourse by Holder to either EPXR, VOXX, or any other subsidiary of EPXR or any collateral for the Obligations or the lack thereof. Each of EPXR and VOXX expressly waives any and all rights of subrogation, reimbursement, indemnity, exoneration, contribution or any other claim which each of EPXR and/or VOXX may now or hereafter have against the other or other person or entity directly or contingently liable for the Obligations, or against or with respect to any other's property (including, without limitation, any property which is collateral for the Obligations), arising from the existence or performance of this Note, the Purchase Agreement or any other Related Agreement, until all Obligations have been indefeasibly paid in full and this Note, the Purchase Agreement and the other Related Agreements have been irrevocably terminated. [Balance of page intentionally left blank; signature page follows.] IN WITNESS WHEREOF, the Borrower has caused this Convertible Term Note to be signed in its name effective as of this ___ day of April, 2005. EPIXTAR CORP. By: /s/ Ilene Kaminsky ------------------ Name: Ilene Kaminsky -------------- Title: CEO --- WITNESS: /s/ Witness - ----------- VOXX CORPORATION By: /s/ Ilene Kaminsky ------------------ Name: Ilene Kaminsky -------------- Title: CEO --- WITNESS: /s/ Witness - ----------- EXHIBIT A NOTICE OF CONVERSION (To be executed by the Holder in order to convert all or part of the Note into Common Stock [Name and Address of Holder] The Undersigned hereby converts $_________ of the principal due on [specify applicable Repayment Date] under the Convertible Term Note issued by Epixtar Corp. and Voxx Corporation dated __________ __, 2005 by delivery of Shares of Common Stock of Epixtar Corp. or Voxx Corporation, as applicable, on and subject to the conditions set forth in Article III of such Note. 1. Date of Conversion _______________________ 2. Shares To Be Delivered: _______________________ By:____________________________ Name:__________________________ Title:_________________________ EXHIBIT B CONVERSION NOTICE (To be executed by the Holder in order to convert all or part of a Monthly Amount into Common Stock) [Name and Address of Holder] Holder hereby converts $_________ of the Monthly Amount due on [specify applicable Repayment Date] under the Convertible Term Note issued by Epixtar Corp. and Voxx Corporation dated ____________ __, 2005 by delivery of Shares of Common Stock of Epixtar Corp. or Voxx Corporation, as applicable, on and subject to the conditions set forth in Article III of such Note. 1. Fixed Conversion Price: $_______________________ 2. Amount to be paid: $_______________________ 3. Shares To Be Delivered (2 divided by 1): __________________ 4. Cash payment to be made by Borrower : $_____________________ Date: ____________ Sands Brothers Venture Capital II LLC By:_____________________________ Name:___________________________ Title:__________________________ EX-4.13.17 18 b406530ex4_13-17.txt EXHIBIT 4.13.17 EXHIBIT 4.13.17 THIS NOTE (THE "NOTE") AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO EPIXTAR CORP. AND/OR VOXX CORPORATION, AS APPLICABLE, THAT SUCH REGISTRATION IS NOT REQUIRED. SECURED CONVERTIBLE TERM NOTE FOR VALUE RECEIVED, EPIXTAR CORP., a Florida corporation ("EPXR"), and VOXX CORPORATION, a Florida corporation ("VOXX") (EPXR and VOXX, collectively, the "BORROWER"), jointly and severally hereby promise to pay to Sands Brothers Venture Capital III LLC (the "HOLDER") or its registered assigns or successors in interest the sum of One Million Two Hundred Thousand Dollars ($1,200,000), together with any accrued and unpaid interest hereon, on April 29, 2008 (the "MATURITY DATE") if not sooner paid. Capitalized terms used herein without definition shall have the meanings ascribed to such terms in that certain Securities Purchase Agreement dated as of the date hereof between the Borrower and the Holder (the "PURCHASE AGREEMENT"). The following terms shall apply to this Note: ARTICLE I INTEREST & AMORTIZATION 1.1 Interest Rate. Subject to Sections 4.11 and 5.6 hereof, interest payable on this Note shall accrue at a rate per annum (the "Interest Rate") equal to the "prime rate" published in The Wall Street Journal from time to time, plus two percent (2.00%). The prime rate shall be increased or decreased as the case may be for each increase or decrease in the prime rate in an amount equal to such increase or decrease in the prime rate; each change to be effective as of the day of the change in such rate. Interest shall be (i) calculated on the basis of a 360 day year and payable monthly, in arrears, commencing on June 1, 2005 and on the first business day of each consecutive calendar month thereafter until the Maturity Date (and on the Maturity Date), whether by acceleration or otherwise (each, a "REPAYMENT DATE"). 1.2 Minimum Monthly Principal Payments. Amortizing payments of the aggregate principal amount outstanding under this Note at any time (the "PRINCIPAL AMOUNT") shall begin on November 1, 2005 and shall recur on the first business day of each succeeding month thereafter until the Maturity Date (each, an "AMORTIZATION DATE"). Subject to Article 3 below, beginning on the first Amortization Date, the Borrower shall make monthly payments to the Holder on each Repayment Date, each in the amount of $28,571.43 (the "MONTHLY PRINCIPAL AMOUNT"), together with any accrued and unpaid interest to date on such portion of the Principal Amount (as defined below) plus any and all other amounts which are then owing under this Note, the Purchase Agreement or any other Related Agreement but have not been paid (the Monthly Principal Amount, together with such accrued and unpaid interest and such other amounts, collectively, the "MONTHLY AMOUNT"). Any Principal Amount that remains outstanding on the Maturity Date shall be due and payable on the Maturity Date. ARTICLE II CONVERSION REPAYMENT 2.1 Payment of Monthly Amount in Cash or Common Stock. (a) If the Monthly Amount is required to be paid in shares of Common Stock (as defined below) pursuant to Section 2.1(b), each month by the fifth (5th) business day prior to each Amortization Date (the "NOTICE DATE"), the Holder shall, subject to Section 2.2 below and the other provisions of this Note, deliver to Borrower a written notice in the form of Exhibit B attached hereto converting the Monthly Amount payable on the next Amortization Date or Repayment Date, as the case may be, into freely tradable unrestricted shares of common stock of EPXR ("EPXR Common Stock") or, following the satisfaction of each of the conditions set forth in clause (i) of Section 2.2 below, into freely tradable unrestricted shares of common stock of VOXX ("VOXX Common Stock") (EPXR Common Stock and VOXX Common Stock, collectively, the "Common Stock")(each, a "REPAYMENT NOTICE"). If a Repayment Notice is not delivered by the Holder on or before the applicable Notice Date for such Amortization Date (or is not required to be delivered in accordance with Section 2.1(b)), then the Borrower shall pay the Monthly Amount due on such Amortization Date in cash. Any portion of the Monthly Amount paid in cash on an Amortization Date or Repayment Date, as the case may be, shall be paid to the Holder in an amount equal to 102% of the principal portion of the Monthly Amount otherwise due and owing to Holder on such Amortization Date or Repayment Date. If the Holder converts all or a portion of the Monthly Amount in shares of Common Stock as provided herein, the number of such shares to be issued by the Borrower to the Holder on such Amortization Date or Repayment Date, as the case may be, shall be the number determined by dividing (x) the portion of the Monthly Amount to be paid in shares of Common Stock, by (y) the then applicable Fixed Conversion Price. For purposes hereof, the "FIXED CONVERSION PRICE" shall, subject to further adjustment as provided herein, mean (x) in the case of a conversion into EPXR Common Stock, $1.00 and (y) in the case of a conversion into VOXX Common Stock on or after the date of the consummation of an initial public offering of the VOXX Common Stock (the "VOXX IPO Date"), a price equal to 85% of the offering price of the VOXX Common Stock on the VOXX IPO Date (after giving effect thereto). (b) Monthly Amount Conversion Guidelines. Subject to Sections 2.1(a), 2.2, and 3.2 hereof, the Holder shall convert all or a portion of the Monthly Amount due on each Repayment Date in shares of Common Stock if the average closing price of the Common Stock as reported by Bloomberg, L.P. on the Principal Market for the five (5) trading days immediately preceding such Repayment Date was greater than or equal to 110% of the Fixed Conversion Price, provided, however, that such conversions shall not exceed twenty five percent (25%) of the aggregate dollar trading volume of the Common Stock for the five (5) day trading period immediately preceding delivery of a Notice of Conversion to the Borrower. Any part of the Monthly Amount due on a Amortization Date or Repayment Date, as the case may be, that the Holder has not converted into shares of Common Stock shall be paid by the Borrower in cash on such Amortization Date or Repayment Date. Any part of the Monthly Amount due on such Amortization Date or Repayment Date which must be paid in cash (as a result of the closing price of the Common Stock on one or more of the five (5) trading days preceding the applicable Amortization Date or Repayment Date being less than 110% of the Fixed Conversion Price) shall be paid in cash at the rate of 102% of the Monthly Amount otherwise due on such Amortization Date or Repayment Date, within three (3) business days of the applicable Amortization Date or Repayment Date. 2.2 No Effective Registration. Notwithstanding anything to the contrary herein, unless the Holder, in its sole discretion, shall request otherwise, none of the Borrower's obligations to pay the Monthly Amount to the Holder may be converted into VOXX Common Stock or EPXR Common Stock unless and until (i) in the case of conversion into VOXX Common Stock, either (I) (a) VOXX shall have consummated an initial public offering, (b) VOXX Common Stock shall be publicly traded on a nationally recognized exchange; and (c) the shares underlying the conversion of this Note into VOXX Common Stock pursuant to the terms hereof shall have been registered on an effective, current Registration Statement (as defined in the Registration Rights Agreement) or (II) an exemption from registration of the EPXR Common Stock (with respect to the resale of such common stock) is available to pursuant to Rule 144 of the Securities Act; (ii) in the case of conversion into EPXR Common Stock, (a) the shares underlying the conversion of this Note into EPXR Common Stock pursuant to the terms hereof shall have been registered on an effective, current Registration Statement; or (b) an exemption from registration of the EPXR Common Stock (with respect to the resale of such common stock) is available to pursuant to Rule 144 of the Securities Act and (III) in each of the foregoing cases, no Event of Default hereunder or under any Related Agreement exists and is continuing, unless such Event of Default is cured within any applicable cure period or is otherwise waived in writing by the Holder in whole or in part at the Holder's option. 2.3 Optional Redemption in Cash. The Borrower will have the option of prepaying this Note ("OPTIONAL REDEMPTION") by paying to the Holder a sum of money equal to one hundred thirty percent (130%) of the outstanding principal amount of this Note at the time of prepayment, together with accrued but unpaid interest thereon and any and all other sums due, accrued or payable to the Holder arising under this Note, the Purchase Agreement or any Related Agreement (the "REDEMPTION AMOUNT") outstanding on the day written notice of redemption (the "NOTICE OF REDEMPTION") is given to the Holder. The Notice of Redemption shall specify the date for such Optional Redemption (the "REDEMPTION PAYMENT DATE") which date shall be seven (7) business days after the date of the Notice of Redemption (the "REDEMPTION PERIOD"). A Notice of Redemption shall not be effective with respect to any portion of this Note for which the Holder has a pending election to convert pursuant to Section 3.1, or for conversions initiated or made by the Holder pursuant to Section 3.1 during the Redemption Period. The Redemption Amount shall be determined as if such Holder's conversion elections had been completed immediately prior to the date of the Notice of Redemption. On the Redemption Payment Date, the Redemption Amount must be paid in good funds to the Holder. In the event the Borrower fails to pay the Redemption Amount on the Redemption Payment Date as set forth herein, then such Redemption Notice will be null and void. ARTICLE III CONVERSION RIGHTS 3.1. Holder's Conversion Rights. The Holder shall have the right, but not the obligation, to convert at any time all or any portion of the then aggregate outstanding principal amount of this Note, together with interest and fees due hereon, into shares of Common Stock subject to the terms and conditions set forth in this Article III. The Holder may exercise such right by delivery to the Borrower of a written notice of conversion not less than one (1) day prior to the date upon which such conversion shall occur. 73.5 3.2 This Section left intentionally blank. 73.6 73.7 3.3 Mechanics of Holder's Conversion. (a) In the event that the Holder elects to convert this Note into Common Stock, the Holder shall give notice of such election by delivering an executed and completed notice of conversion ("NOTICE OF CONVERSION") to the Borrower and such Notice of Conversion shall provide a breakdown in reasonable detail of the Principal Amount, accrued interest and fees being converted. On each Conversion Date (as hereinafter defined) and in accordance with its Notice of Conversion, the Holder shall make the appropriate reduction to the Principal Amount, accrued interest and fees as entered in its records and shall provide written notice thereof to the Borrower within two (2) business days after the Conversion Date. Each date on which a Notice of Conversion is delivered or telecopied to the Borrower in accordance with the provisions hereof shall be deemed a Conversion Date (the "CONVERSION DATE"). A form of Notice of Conversion to be employed by the Holder is annexed hereto as Exhibit A. 73.8 (b) Pursuant to the terms of the Notice of Conversion, the Borrower will issue instructions to the transfer agent accompanied by an opinion of counsel within two (2) business day of the date of the delivery to Borrower of the Notice of Conversion and shall cause the transfer agent to transmit the certificates representing the Conversion Shares to the Holder by crediting the account of the Holder's designated broker with the Depository Trust Corporation ("DTC") through its Deposit Withdrawal Agent Commission ("DWAC") system within three (3) business days after receipt by the Borrower of the Notice of Conversion (the "DELIVERY DATE"). In the case of the exercise of the conversion rights set forth herein the conversion privilege shall be deemed to have been exercised and the Conversion Shares issuable upon such conversion shall be deemed to have been issued upon the date of receipt by the Borrower of the Notice of Conversion. The Holder shall be treated for all purposes as the record holder of such Common Stock, unless the Holder provides the Borrower written instructions to the contrary. 3.4 Conversion Mechanics. (a) The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing that portion of the principal and interest and fees to be converted, if any, by the then applicable Fixed Conversion Price. In the event of any conversions of outstanding principal amount under this Note in part pursuant to this Article III, such conversions shall be deemed to constitute conversions of outstanding principal amount applying to Monthly Amounts for the remaining Amortization Dates in chronological order. (b) The Fixed Conversion Price and number and kind of shares or other securities to be issued upon conversion is subject to adjustment from time to time upon the occurrence of certain events, as follows: A. Stock Splits, Combinations and Dividends. If the shares of Common Stock are subdivided or combined into a greater or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock in shares of Common Stock, the Fixed Conversion Price shall be proportionately reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event. B. During the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the full conversion of this Note. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. The Borrower agrees that its issuance of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note. C. Share Issuances. Subject to the provisions of this Section 3.4, if the Borrower shall (x) in the case of EPXR Common Stock, at any time prior to the conversion or repayment in full of the Principal Amount and (y) in the case of VOXX Common Stock at any time after the consummation of an initial public offering of the VOXX Common Stock and prior to the conversion or repayment in full of the Principal Amount, issue any shares of Common Stock or securities convertible into Common Stock to a person other than the Holder (except (i) pursuant to Subsections A or B above; (ii) pursuant to options, warrants, or other obligations to issue shares outstanding on the date hereof as disclosed to Holder in writing; or (iii) pursuant to options that may be issued under any employee incentive stock option and/or any qualified stock option plan adopted by the Borrower) for a consideration per share (the "Offer Price") less than the Fixed Conversion Price in effect at the time of such issuance (and such issuance, an "Offering"), then the Fixed Conversion Price shall be immediately reset to such lower Offer Price at the time of issuance of such securities pursuant to the formula below. For purposes hereof, the issuance of any security of the Borrower convertible into or exercisable or exchangeable for Common Stock shall result in an adjustment to the Fixed Conversion Price at the time of issuance of such securities. If the Borrower issues any additional shares pursuant to Section 3.4 above then, and thereafter successively upon each such issue, the Fixed Conversion Price shall be adjusted by multiplying the then applicable Fixed Conversion Price by the following fraction: --------------------------- A + B --------------------------- (A + B) + [((C - D) x B)/C] --------------------------- A = Total amount of shares convertible pursuant to this Note, the Purchase Agreement and the Related Agreements. B = Actual shares sold in the Offering C = Fixed Conversion Price D = Offering price D. Reclassification, etc. If the Borrower at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes, this Note, as to the unpaid Principal Amount and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change. 3.5 Issuance of New Note. Upon any partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Borrower to the Holder for the principal balance of this Note and interest which shall not have been converted or paid. The Borrower will pay no costs, fees or any other consideration to the Holder for the production and issuance of a new Note. ARTICLE IV EVENTS OF DEFAULT Upon the occurrence and continuance of an Event of Default beyond any applicable grace period, the Holder may make all sums of principal, interest and other fees then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable. In the event of such an acceleration, the amount due and owing to the Holder shall be 110% of the outstanding principal amount of the Note (plus accrued and unpaid interest and fees, if any) (the "DEFAULT PAYMENT"). If, with respect to any Event of Default, the Borrower cures the Event of Default, the Event of Default will be deemed to no longer exist and any rights and remedies of Holder pertaining to such Event of Default will be of no further force or effect. The Default Payment shall be applied first to any fees due and payable to Holder pursuant to this Note, the Purchase Agreement or the other Related Agreements, then to accrued and unpaid interest due on this Note and then to outstanding principal balance of this Note. The occurrence of any of the following events set forth in Sections 4.1 through 4.12, inclusive, is an "EVENT OF DEFAULT": 4.1 Failure to Pay Principal, Interest or other Fees. The Borrower fails to pay when due any installment of principal, interest or other fees hereon in accordance herewith, and in any such case, such failure shall continue for a period of five (5) days following the date upon which any such payment was due. 4.2 Breach of Covenant. The Borrower breaches any covenant or any other term or condition of this Note or the Purchase Agreement in any material respect, or the Borrower or any of its Subsidiaries breaches any covenant or any other term or condition of any Related Agreement in any material respect and, any such case, such breach, if subject to cure, continues for a period of thirty (30) days after the occurrence thereof. 4.3 Breach of Representations and Warranties. Any representation or warranty made by the Borrower in this Note or the Purchase Agreement, or by the Borrower or any of its Subsidiaries in any Related Agreement, shall, in any such case, be false or misleading in any material respect on the date that such representation or warranty was made or deemed made. 4.4 Receiver or Trustee. The Borrower or any of its Subsidiaries shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed. 4.5 Judgments. Any money judgment, writ or similar final process shall be entered or filed against the Borrower or any of its Subsidiaries or any of their respective property or other assets for more than $150,000, and shall remain unvacated, unbonded or unstayed for a period of thirty (30) days. 4.6 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any of its Subsidiaries and if commenced against the Borrower or any such Subsidiary shall not be dismissed within forty-five (45) days. 4.7 Stop Trade. An SEC stop trade order or Principal Market trading suspension of the Common Stock shall be in effect for five (5) consecutive days or five (5) days during a period of ten (10) consecutive days, excluding in all cases a suspension of all trading on a Principal Market, provided that the Borrower shall not have been able to cure such trading suspension within thirty (30) days of the notice thereof or list the Common Stock on another Principal Market within sixty (60) days of such notice. The "Principal Market" for the Common Stock shall include the NASD OTC Bulletin Board, NASDAQ SmallCap Market, NASDAQ National Market System, American Stock Exchange, or New York Stock Exchange (whichever of the foregoing is at the time the principal trading exchange or market for the Common Stock, or any securities exchange or other securities market on which the Common Stock is then being listed or traded. 4.8 Failure to Deliver Common Stock or Replacement Note. The Borrower shall fail (i) to timely deliver Common Stock to the Holder pursuant to and in the form required by this Note, and Section 9 of the Purchase Agreement, if such failure to timely deliver Common Stock shall not be cured within two (2) business days or (ii) to deliver a replacement Note to Holder within seven (7) business days following the required date of such issuance pursuant to this Note, the Purchase Agreement or any Related Agreement (to the extent required under such agreements). 4.21 Default Under Related Agreements or Other Agreements. The occurrence and continuance of any Event of Default (as defined in any Related Agreement) or any event of default (or similar term) under any other indebtedness. 4.22 Change in Control. A Change of Control (as defined below) shall occur with respect to the Company, unless Holder shall have expressly consented to such Change of Control in writing. A "Change of Control" shall mean any event or circumstance as a result of which (i) any "Person" or "group" (as such terms are defined in Sections 13(d) and 14(d) of the Exchange Act, as in effect on the date hereof), other than the Holder, is or becomes the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 35% or more on a fully diluted basis of the then outstanding voting equity interest of EPXR, (ii) the Board of Directors of EPXR shall cease to consist of a majority of the Board of Directors of EPXR on the date hereof (or directors appointed by a majority of the Board of Directors of EPXR in effect immediately prior to such appointment), (iii) EPXR sells all or any part of the equity interests of, or all or substantially all of the assets of, Voxx or any of its Subsidiaries prior to the consummation of an initial public offering of the VOXX Common Stock or (iv) Voxx or any of its Subsidiaries merges or consolidates with, or sells or transfers all or substantially all of its assets to, any other person or entity; provided that (i) any Subsidiary of Voxx may merge or consolidate with any other Subsidiary of Voxx so long as the surviving entity in any such merger or consolidation is a Subsidiary of Voxx that is party to the Master Security Agreement, the Guaranty and the Stock Pledge Agreement and (ii) any Subsidiary of Voxx may sell or transfer all or substantially all of its assets to any person or entity that is party to the Master Security Agreement, the Guaranty and the Stock Pledge Agreement. Notwithstanding the foregoing contained in this Section 4.10, it is contemplated that Voxx and its subsidiaries will consummate an initial public offering of its common stock and it is hereby acknowledged and agreed to by Holder that such an initial public offering will not constitute an Event of Default under this 4.10. 4.23 Federal Trade Commission Action. The Federal Trade Commission or any other governmental agency shall commence any action against the Borrower or any or its Subsidiaries, the effect of any such action, or any judgment, order or settlement resulting therefrom, on the Borrower or any such Subsidiary is to restrain or deprive the Borrower and its Subsidiaries from utilizing any substantial portion of their assets determined on a consolidated basis. 4.24 Cross-Default. An Event of Default, under and as defined in any of (i) any Secured Convertible Term Note, dated the date hereof, issued by EPXR and Voxx to Laurus (as amended, modified or supplemented from time to time, the "2005 Notes"), (ii) the Laurus Securities Purchase Agreement or (iii) the Related Agreements referred to in the Laurus Securities Purchase Agreement, shall have occurred and be continuing. DEFAULT RELATED PROVISIONS 4.12 Payment Grace Period. Following the occurrence and continuance of an Event of Default beyond any applicable cure period hereunder, the Borrower shall pay the Holder a default interest rate of two percent (2%) per month on all amounts due and owing under the Note, which default interest shall be payable upon demand. 4.13 Conversion Privileges. The conversion privileges set forth in Article III shall remain in full force and effect immediately from the date hereof and until this Note is paid in full. 4.14 Cumulative Remedies. The remedies under this Note shall be cumulative. ARTICLE V MISCELLANEOUS 5.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available. 5.2 Notices. Any notice herein required or permitted to be given shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Borrower at the address provided in the Purchase Agreement executed in connection herewith, and to the Holder at the address provided in the Purchase Agreement for such Holder, with a copy to John E. Tucker, Esq., 825 Third Avenue, 14th Floor, New York, New York 10022, facsimile number (212) 541-4434, or at such other address as the Borrower or the Holder may designate by ten days advance written notice to the other parties hereto. A Notice of Conversion shall be deemed given when made to the Borrower pursuant to the Purchase Agreement. 5.3 Amendment Provision. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented, and any successor instrument issued pursuant to Section 3.5 hereof, as it may be amended or supplemented. 5.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns, and may be assigned by the Holder in accordance with the requirements of the Purchase Agreement. This Note shall not be assigned by the Borrower without the consent of the Holder. 5.5 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. Except as set forth below in this Section 5.5, any and all disputes, controversies and claims that the Borrower or any of its Subsidiaries may assert against the Holder arising out of or relating to this Note, the Purchase Agreement or any other Related Agreement shall be determined exclusively by arbitration (each such arbitration, an "Arbitration") in New York City before a panel of three neutral arbitrators agreed to by the Holder and the Borrower (collectively, the "Arbitrators") in accordance with and pursuant to the then existing commercial arbitration rules of the American Arbitration Association. The Borrower (on its behalf and on behalf of its subsidiaries) hereby irrevocably waives any right to assert such claims in any other forum. The Arbitrators shall have the power in their discretion to award specific performance or injunctive relief (but shall not have the power to render any incidental, special or punitive damages) and reasonable attorneys' fees and expenses to any party in any arbitration. The Arbitrators may not change, modify or alter any express condition, term or provision of this Note, the Purchase Agreement or of any other Related Agreement nor shall they have the power to render any award against the Holder that would have such effect. Each Arbitration award shall be final and binding upon the parties subject thereto and judgment may be entered thereon in any court of competent jurisdiction. The service of any notice, process, motion or other document in connection with an Arbitration or for the enforcement of any Arbitration award may be made in the same manner as communications may be given under Section 5.2 hereof. Notwithstanding the foregoing, the provisions of this Section 5.5 nor any other provision contained in this Note, the Purchase Agreement or in any other Related Agreement shall limit in any manner whatsoever the Holder's right to commence an action against or in connection with the Borrower, any of its Subsidiaries or their respective properties in any court of competent jurisdiction or otherwise utilize judicial process in connection with or arising out of the Holder's rights and remedies under this Note, the Purchase Agreement and/or any Related Agreement or otherwise (any such action, a "Court Action"). Court Actions may be brought by the Holder in any state or federal court of competent jurisdiction and the Borrower (on its behalf and on behalf of its Subsidiaries) irrevocably submits to the jurisdiction of such state and federal courts and irrevocably waives any claim or defense of inconvenient forum or lack of personal jurisdiction in such forum or right of removal or right to jury trial under any applicable law or decision or otherwise. Service of any notice, process, motion or other document in connection with a Court Action may be made in the same manner as communications may be given under Section 5.2. In addition, the Holder may serve process in any other manner permitted under applicable law. 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 Note 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 unenforceability of any other provision of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Borrower in any other jurisdiction to collect on the Borrower's obligations to Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court in favor of the Holder. 5.6 Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower. 5.7 Security Interest and Guarantee. The Holder has been granted a security interest (i) in certain assets of VOXX and its Subsidiaries as more fully described in the Master Security Agreement dated as of the date hereof and (ii) pursuant to the Stock Pledge Agreement dated as of the date hereof. The Obligations of the Borrower under this Note are guaranteed pursuant to the Guaranty dated as of the date hereof. 5.17 Construction. Each party acknowledges that its legal counsel participated in the preparation of this Note 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 Note to favor any party against the other. 5.18 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay to Holder reasonable costs of collection, including reasonable attorney's fees. 5.19 Joint and Several Obligations. All obligations of VOXX and EPXR as co-borrowers under this Note and the Related Agreements (the "Obligations") shall be joint and several obligations, and the Borrower shall make payment upon the maturity of the Obligations by acceleration or otherwise, and such obligation and liability on the part of the Borrower shall in no way be affected by any extensions, renewals and forbearance granted by the Holder to the Borrower, failure of Holder to give either EPXR or VOXX any notice, any failure of Holder to pursue to preserve its rights against either EPXR and/or VOXX, the release by Holder of any collateral now or thereafter acquired from either EPXR, VOXX and/or any other subsidiary of EPXR, and such agreement by each of EPXR and VOXX to pay upon any notice issued pursuant thereto is unconditional and unaffected by prior recourse by Holder to either EPXR, VOXX, or any other subsidiary of EPXR or any collateral for the Obligations or the lack thereof. Each of EPXR and VOXX expressly waives any and all rights of subrogation, reimbursement, indemnity, exoneration, contribution or any other claim which each of EPXR and/or VOXX may now or hereafter have against the other or other person or entity directly or contingently liable for the Obligations, or against or with respect to any other's property (including, without limitation, any property which is collateral for the Obligations), arising from the existence or performance of this Note, the Purchase Agreement or any other Related Agreement, until all Obligations have been indefeasibly paid in full and this Note, the Purchase Agreement and the other Related Agreements have been irrevocably terminated. [Balance of page intentionally left blank; signature page follows.] IN WITNESS WHEREOF, the Borrower has caused this Convertible Term Note to be signed in its name effective as of this ___ day of April, 2005. EPIXTAR CORP. By: /s/ Ilene Kaminsky ------------------------------- Name: Ilene Kaminsky Title: CEO WITNESS: /s/ Witness - ------------------------------- VOXX CORPORATION By: /s/ Ilene Kaminsky ------------------------------- Name: Ilene Kaminsky Title: CEO WITNESS: /s/ Witness - ------------------------------- EXHIBIT A NOTICE OF CONVERSION (To be executed by the Holder in order to convert all or part of the Note into Common Stock [Name and Address of Holder] The Undersigned hereby converts $_________ of the principal due on [specify applicable Repayment Date] under the Convertible Term Note issued by Epixtar Corp. and Voxx Corporation dated __________ __, 2005 by delivery of Shares of Common Stock of Epixtar Corp. or Voxx Corporation, as applicable, on and subject to the conditions set forth in Article III of such Note. 1. Date of Conversion ----------------------- 2. Shares To Be Delivered: ----------------------- By: -------------------------------- Name: ------------------------------ Title: ----------------------------- EXHIBIT B CONVERSION NOTICE (To be executed by the Holder in order to convert all or part of a Monthly Amount into Common Stock) [Name and Address of Holder] Holder hereby converts $_________ of the Monthly Amount due on [specify applicable Repayment Date] under the Convertible Term Note issued by Epixtar Corp. and Voxx Corporation dated ____________ __, 2005 by delivery of Shares of Common Stock of Epixtar Corp. or Voxx Corporation, as applicable, on and subject to the conditions set forth in Article III of such Note. 1. Fixed Conversion Price: $_______________________ 2. Amount to be paid: $_______________________ 3. Shares To Be Delivered (2 divided by 1): _____________________ 4. Cash payment to be made by Borrower: $_____________________ Date: ____________ Sands Brothers Venture Capital III LLC By: ----------------------------------- Name: --------------------------------- Title: -------------------------------- EX-4.13.18 19 b406530ex4_13-18.txt EXHIBIT 4.13.18 EXHIBIT 4.13.18 THIS NOTE (THE "NOTE") AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO EPIXTAR CORP. AND/OR VOXX CORPORATION, AS APPLICABLE, THAT SUCH REGISTRATION IS NOT REQUIRED. SECURED CONVERTIBLE TERM NOTE FOR VALUE RECEIVED, EPIXTAR CORP., a Florida corporation ("EPXR"), and VOXX CORPORATION, a Florida corporation ("VOXX") (EPXR and VOXX, collectively, the "BORROWER"), jointly and severally hereby promise to pay to Sands Brothers Venture Capital IV LLC (the "HOLDER") or its registered assigns or successors in interest the sum of One Hundred Fifty Thousand Dollars ($150,000), together with any accrued and unpaid interest hereon, on April 29, 2008 (the "MATURITY DATE") if not sooner paid. Capitalized terms used herein without definition shall have the meanings ascribed to such terms in that certain Securities Purchase Agreement dated as of the date hereof between the Borrower and the Holder (the "PURCHASE AGREEMENT"). The following terms shall apply to this Note: ARTICLE I INTEREST & AMORTIZATION 1.1 Interest Rate. Subject to Sections 4.11 and 5.6 hereof, interest payable on this Note shall accrue at a rate per annum (the "Interest Rate") equal to the "prime rate" published in The Wall Street Journal from time to time, plus two percent (2.00%). The prime rate shall be increased or decreased as the case may be for each increase or decrease in the prime rate in an amount equal to such increase or decrease in the prime rate; each change to be effective as of the day of the change in such rate. Interest shall be (i) calculated on the basis of a 360 day year and payable monthly, in arrears, commencing on June 1, 2005 and on the first business day of each consecutive calendar month thereafter until the Maturity Date (and on the Maturity Date), whether by acceleration or otherwise (each, a "REPAYMENT DATE"). 1.2 Minimum Monthly Principal Payments. Amortizing payments of the aggregate principal amount outstanding under this Note at any time (the "PRINCIPAL AMOUNT") shall begin on November 1, 2005 and shall recur on the first business day of each succeeding month thereafter until the Maturity Date (each, an "AMORTIZATION DATE"). Subject to Article 3 below, beginning on the first Amortization Date, the Borrower shall make monthly payments to the Holder on each Repayment Date, each in the amount of $3,571.43 (the "MONTHLY PRINCIPAL AMOUNT"), together with any accrued and unpaid interest to date on such portion of the Principal Amount (as defined below) plus any and all other amounts which are then owing under this Note, the Purchase Agreement or any other Related Agreement but have not been paid (the Monthly Principal Amount, together with such accrued and unpaid interest and such other amounts, collectively, the "MONTHLY AMOUNT"). Any Principal Amount that remains outstanding on the Maturity Date shall be due and payable on the Maturity Date. ARTICLE II CONVERSION REPAYMENT 2.1 Payment of Monthly Amount in Cash or Common Stock. (a) If the Monthly Amount is required to be paid in shares of Common Stock (as defined below) pursuant to Section 2.1(b), each month by the fifth (5th) business day prior to each Amortization Date (the "NOTICE DATE"), the Holder shall, subject to Section 2.2 below and the other provisions of this Note, deliver to Borrower a written notice in the form of Exhibit B attached hereto converting the Monthly Amount payable on the next Amortization Date or Repayment Date, as the case may be, into freely tradable unrestricted shares of common stock of EPXR ("EPXR Common Stock") or, following the satisfaction of each of the conditions set forth in clause (i) of Section 2.2 below, into freely tradable unrestricted shares of common stock of VOXX ("VOXX Common Stock") (EPXR Common Stock and VOXX Common Stock, collectively, the "Common Stock")(each, a "REPAYMENT NOTICE"). If a Repayment Notice is not delivered by the Holder on or before the applicable Notice Date for such Amortization Date (or is not required to be delivered in accordance with Section 2.1(b)), then the Borrower shall pay the Monthly Amount due on such Amortization Date in cash. Any portion of the Monthly Amount paid in cash on an Amortization Date or Repayment Date, as the case may be, shall be paid to the Holder in an amount equal to 102% of the principal portion of the Monthly Amount otherwise due and owing to Holder on such Amortization Date or Repayment Date. If the Holder converts all or a portion of the Monthly Amount in shares of Common Stock as provided herein, the number of such shares to be issued by the Borrower to the Holder on such Amortization Date or Repayment Date, as the case may be, shall be the number determined by dividing (x) the portion of the Monthly Amount to be paid in shares of Common Stock, by (y) the then applicable Fixed Conversion Price. For purposes hereof, the "FIXED CONVERSION PRICE" shall, subject to further adjustment as provided herein, mean (x) in the case of a conversion into EPXR Common Stock, $1.00 and (y) in the case of a conversion into VOXX Common Stock on or after the date of the consummation of an initial public offering of the VOXX Common Stock (the "VOXX IPO Date"), a price equal to 85% of the offering price of the VOXX Common Stock on the VOXX IPO Date (after giving effect thereto). (b) Monthly Amount Conversion Guidelines. Subject to Sections 2.1(a), 2.2, and 3.2 hereof, the Holder shall convert all or a portion of the Monthly Amount due on each Repayment Date in shares of Common Stock if the average closing price of the Common Stock as reported by Bloomberg, L.P. on the Principal Market for the five (5) trading days immediately preceding such Repayment Date was greater than or equal to 110% of the Fixed Conversion Price, provided, however, that such conversions shall not exceed twenty five percent (25%) of the aggregate dollar trading volume of the Common Stock for the five (5) day trading period immediately preceding delivery of a Notice of Conversion to the Borrower. Any part of the Monthly Amount due on a Amortization Date or Repayment Date, as the case may be, that the Holder has not converted into shares of Common Stock shall be paid by the Borrower in cash on such Amortization Date or Repayment Date. Any part of the Monthly Amount due on such Amortization Date or Repayment Date which must be paid in cash (as a result of the closing price of the Common Stock on one or more of the five (5) trading days preceding the applicable Amortization Date or Repayment Date being less than 110% of the Fixed Conversion Price) shall be paid in cash at the rate of 102% of the Monthly Amount otherwise due on such Amortization Date or Repayment Date, within three (3) business days of the applicable Amortization Date or Repayment Date. 2.2 No Effective Registration. Notwithstanding anything to the contrary herein, unless the Holder, in its sole discretion, shall request otherwise, none of the Borrower's obligations to pay the Monthly Amount to the Holder may be converted into VOXX Common Stock or EPXR Common Stock unless and until (i) in the case of conversion into VOXX Common Stock, either (I) (a) VOXX shall have consummated an initial public offering, (b) VOXX Common Stock shall be publicly traded on a nationally recognized exchange; and (c) the shares underlying the conversion of this Note into VOXX Common Stock pursuant to the terms hereof shall have been registered on an effective, current Registration Statement (as defined in the Registration Rights Agreement) or (II) an exemption from registration of the EPXR Common Stock (with respect to the resale of such common stock) is available to pursuant to Rule 144 of the Securities Act; (ii) in the case of conversion into EPXR Common Stock, (a) the shares underlying the conversion of this Note into EPXR Common Stock pursuant to the terms hereof shall have been registered on an effective, current Registration Statement; or (b) an exemption from registration of the EPXR Common Stock (with respect to the resale of such common stock) is available to pursuant to Rule 144 of the Securities Act and (III) in each of the foregoing cases, no Event of Default hereunder or under any Related Agreement exists and is continuing, unless such Event of Default is cured within any applicable cure period or is otherwise waived in writing by the Holder in whole or in part at the Holder's option. 2.3 Optional Redemption in Cash. The Borrower will have the option of prepaying this Note ("OPTIONAL REDEMPTION") by paying to the Holder a sum of money equal to one hundred thirty percent (130%) of the outstanding principal amount of this Note at the time of prepayment, together with accrued but unpaid interest thereon and any and all other sums due, accrued or payable to the Holder arising under this Note, the Purchase Agreement or any Related Agreement (the "REDEMPTION AMOUNT") outstanding on the day written notice of redemption (the "NOTICE OF REDEMPTION") is given to the Holder. The Notice of Redemption shall specify the date for such Optional Redemption (the "REDEMPTION PAYMENT DATE") which date shall be seven (7) business days after the date of the Notice of Redemption (the "REDEMPTION PERIOD"). A Notice of Redemption shall not be effective with respect to any portion of this Note for which the Holder has a pending election to convert pursuant to Section 3.1, or for conversions initiated or made by the Holder pursuant to Section 3.1 during the Redemption Period. The Redemption Amount shall be determined as if such Holder's conversion elections had been completed immediately prior to the date of the Notice of Redemption. On the Redemption Payment Date, the Redemption Amount must be paid in good funds to the Holder. In the event the Borrower fails to pay the Redemption Amount on the Redemption Payment Date as set forth herein, then such Redemption Notice will be null and void. ARTICLE III CONVERSION RIGHTS 3.1. Holder's Conversion Rights. The Holder shall have the right, but not the obligation, to convert at any time all or any portion of the then aggregate outstanding principal amount of this Note, together with interest and fees due hereon, into shares of Common Stock subject to the terms and conditions set forth in this Article III. The Holder may exercise such right by delivery to the Borrower of a written notice of conversion not less than one (1) day prior to the date upon which such conversion shall occur. 73.9 3.2 This Section left intentionally blank. (142.14) 73.10 73.11 3.3 Mechanics of Holder's Conversion. (a) In the event that the Holder elects to convert this Note into Common Stock, the Holder shall give notice of such election by delivering an executed and completed notice of conversion ("NOTICE OF CONVERSION") to the Borrower and such Notice of Conversion shall provide a breakdown in reasonable detail of the Principal Amount, accrued interest and fees being converted. On each Conversion Date (as hereinafter defined) and in accordance with its Notice of Conversion, the Holder shall make the appropriate reduction to the Principal Amount, accrued interest and fees as entered in its records and shall provide written notice thereof to the Borrower within two (2) business days after the Conversion Date. Each date on which a Notice of Conversion is delivered or telecopied to the Borrower in accordance with the provisions hereof shall be deemed a Conversion Date (the "CONVERSION DATE"). A form of Notice of Conversion to be employed by the Holder is annexed hereto as Exhibit A. 73.12 (b) Pursuant to the terms of the Notice of Conversion, the Borrower will issue instructions to the transfer agent accompanied by an opinion of counsel within two (2) business day of the date of the delivery to Borrower of the Notice of Conversion and shall cause the transfer agent to transmit the certificates representing the Conversion Shares to the Holder by crediting the account of the Holder's designated broker with the Depository Trust Corporation ("DTC") through its Deposit Withdrawal Agent Commission ("DWAC") system within three (3) business days after receipt by the Borrower of the Notice of Conversion (the "DELIVERY DATE"). In the case of the exercise of the conversion rights set forth herein the conversion privilege shall be deemed to have been exercised and the Conversion Shares issuable upon such conversion shall be deemed to have been issued upon the date of receipt by the Borrower of the Notice of Conversion. The Holder shall be treated for all purposes as the record holder of such Common Stock, unless the Holder provides the Borrower written instructions to the contrary. 3.4 Conversion Mechanics(.) (a) The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined by dividing that portion of the principal and interest and fees to be converted, if any, by the then applicable Fixed Conversion Price. In the event of any conversions of outstanding principal amount under this Note in part pursuant to this Article III, such conversions shall be deemed to constitute conversions of outstanding principal amount applying to Monthly Amounts for the remaining Amortization Dates in chronological order. (b) The Fixed Conversion Price and number and kind of shares or other securities to be issued upon conversion is subject to adjustment from time to time upon the occurrence of certain events, as follows: A. Stock Splits, Combinations and Dividends. If the shares of Common Stock are subdivided or combined into a greater or smaller number of shares of Common Stock, or if a dividend is paid on the Common Stock in shares of Common Stock, the Fixed Conversion Price shall be proportionately reduced in case of subdivision of shares or stock dividend or proportionately increased in the case of combination of shares, in each such case by the ratio which the total number of shares of Common Stock outstanding immediately after such event bears to the total number of shares of Common Stock outstanding immediately prior to such event. B. During the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the full conversion of this Note. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. The Borrower agrees that its issuance of this Note shall constitute full authority to its officers, agents, and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note. C. Share Issuances. Subject to the provisions of this Section 3.4, if the Borrower shall (x) in the case of EPXR Common Stock, at any time prior to the conversion or repayment in full of the Principal Amount and (y) in the case of VOXX Common Stock at any time after the consummation of an initial public offering of the VOXX Common Stock and prior to the conversion or repayment in full of the Principal Amount, issue any shares of Common Stock or securities convertible into Common Stock to a person other than the Holder (except (i) pursuant to Subsections A or B above; (ii) pursuant to options, warrants, or other obligations to issue shares outstanding on the date hereof as disclosed to Holder in writing; or (iii) pursuant to options that may be issued under any employee incentive stock option and/or any qualified stock option plan adopted by the Borrower) for a consideration per share (the "Offer Price") less than the Fixed Conversion Price in effect at the time of such issuance (and such issuance, an "Offering"), then the Fixed Conversion Price shall be immediately reset to such lower Offer Price at the time of issuance of such securities pursuant to the formula below. For purposes hereof, the issuance of any security of the Borrower convertible into or exercisable or exchangeable for Common Stock shall result in an adjustment to the Fixed Conversion Price at the time of issuance of such securities. If the Borrower issues any additional shares pursuant to Section 3.4 above then, and thereafter successively upon each such issue, the Fixed Conversion Price shall be adjusted by multiplying the then applicable Fixed Conversion Price by the following fraction: --------------------------- A + B --------------------------- (A + B) + [((C - D) x B)/C] --------------------------- A = Total amount of shares convertible pursuant to this Note, the Purchase Agreement and the Related Agreements. B = Actual shares sold in the Offering C = Fixed Conversion Price D = Offering price D. Reclassification, etc. If the Borrower at any time shall, by reclassification or otherwise, change the Common Stock into the same or a different number of securities of any class or classes, this Note, as to the unpaid Principal Amount and accrued interest thereon, shall thereafter be deemed to evidence the right to purchase an adjusted number of such securities and kind of securities as would have been issuable as the result of such change with respect to the Common Stock immediately prior to such reclassification or other change. 3.5 Issuance of New Note. Upon any partial conversion of this Note, a new Note containing the same date and provisions of this Note shall, at the request of the Holder, be issued by the Borrower to the Holder for the principal balance of this Note and interest which shall not have been converted or paid. The Borrower will pay no costs, fees or any other consideration to the Holder for the production and issuance of a new Note. ARTICLE IV EVENTS OF DEFAULT Upon the occurrence and continuance of an Event of Default beyond any applicable grace period, the Holder may make all sums of principal, interest and other fees then remaining unpaid hereon and all other amounts payable hereunder immediately due and payable. In the event of such an acceleration, the amount due and owing to the Holder shall be 110% of the outstanding principal amount of the Note (plus accrued and unpaid interest and fees, if any) (the "DEFAULT PAYMENT"). If, with respect to any Event of Default, the Borrower cures the Event of Default, the Event of Default will be deemed to no longer exist and any rights and remedies of Holder pertaining to such Event of Default will be of no further force or effect. The Default Payment shall be applied first to any fees due and payable to Holder pursuant to this Note, the Purchase Agreement or the other Related Agreements, then to accrued and unpaid interest due on this Note and then to outstanding principal balance of this Note. The occurrence of any of the following events set forth in Sections 4.1 through 4.12, inclusive, is an "EVENT OF DEFAULT": 4.1 Failure to Pay Principal, Interest or other Fees. The Borrower fails to pay when due any installment of principal, interest or other fees hereon in accordance herewith, and in any such case, such failure shall continue for a period of five (5) days following the date upon which any such payment was due. 4.2 Breach of Covenant. The Borrower breaches any covenant or any other term or condition of this Note or the Purchase Agreement in any material respect, or the Borrower or any of its Subsidiaries breaches any covenant or any other term or condition of any Related Agreement in any material respect and, any such case, such breach, if subject to cure, continues for a period of thirty (30) days after the occurrence thereof. 4.3 Breach of Representations and Warranties. Any representation or warranty made by the Borrower in this Note or the Purchase Agreement, or by the Borrower or any of its Subsidiaries in any Related Agreement, shall, in any such case, be false or misleading in any material respect on the date that such representation or warranty was made or deemed made. 4.4 Receiver or Trustee. The Borrower or any of its Subsidiaries shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed. 4.5 Judgments. Any money judgment, writ or similar final process shall be entered or filed against the Borrower or any of its Subsidiaries or any of their respective property or other assets for more than $150,000, and shall remain unvacated, unbonded or unstayed for a period of thirty (30) days. 4.6 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any of its Subsidiaries and if commenced against the Borrower or any such Subsidiary shall not be dismissed within forty-five (45) days. 4.7 Stop Trade. An SEC stop trade order or Principal Market trading suspension of the Common Stock shall be in effect for five (5) consecutive days or five (5) days during a period of ten (10) consecutive days, excluding in all cases a suspension of all trading on a Principal Market, provided that the Borrower shall not have been able to cure such trading suspension within thirty (30) days of the notice thereof or list the Common Stock on another Principal Market within sixty (60) days of such notice. The "Principal Market" for the Common Stock shall include the NASD OTC Bulletin Board, NASDAQ SmallCap Market, NASDAQ National Market System, American Stock Exchange, or New York Stock Exchange (whichever of the foregoing is at the time the principal trading exchange or market for the Common Stock, or any securities exchange or other securities market on which the Common Stock is then being listed or traded. 4.8 Failure to Deliver Common Stock or Replacement Note. The Borrower shall fail (i) to timely deliver Common Stock to the Holder pursuant to and in the form required by this Note, and Section 9 of the Purchase Agreement, if such failure to timely deliver Common Stock shall not be cured within two (2) business days or (ii) to deliver a replacement Note to Holder within seven (7) business days following the required date of such issuance pursuant to this Note, the Purchase Agreement or any Related Agreement (to the extent required under such agreements). 4.25 Default Under Related Agreements or Other Agreements. The occurrence and continuance of any Event of Default (as defined in any Related Agreement) or any event of default (or similar term) under any other indebtedness. 4.26 Change in Control. A Change of Control (as defined below) shall occur with respect to the Company, unless Holder shall have expressly consented to such Change of Control in writing. A "Change of Control" shall mean any event or circumstance as a result of which (i) any "Person" or "group" (as such terms are defined in Sections 13(d) and 14(d) of the Exchange Act, as in effect on the date hereof), other than the Holder, is or becomes the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 35% or more on a fully diluted basis of the then outstanding voting equity interest of EPXR, (ii) the Board of Directors of EPXR shall cease to consist of a majority of the Board of Directors of EPXR on the date hereof (or directors appointed by a majority of the Board of Directors of EPXR in effect immediately prior to such appointment), (iii) EPXR sells all or any part of the equity interests of, or all or substantially all of the assets of, Voxx or any of its Subsidiaries prior to the consummation of an initial public offering of the VOXX Common Stock or (iv) Voxx or any of its Subsidiaries merges or consolidates with, or sells or transfers all or substantially all of its assets to, any other person or entity; provided that (i) any Subsidiary of Voxx may merge or consolidate with any other Subsidiary of Voxx so long as the surviving entity in any such merger or consolidation is a Subsidiary of Voxx that is party to the Master Security Agreement, the Guaranty and the Stock Pledge Agreement and (ii) any Subsidiary of Voxx may sell or transfer all or substantially all of its assets to any person or entity that is party to the Master Security Agreement, the Guaranty and the Stock Pledge Agreement. Notwithstanding the foregoing contained in this Section 4.10, it is contemplated that Voxx and its subsidiaries will consummate an initial public offering of its common stock and it is hereby acknowledged and agreed to by Holder that such an initial public offering will not constitute an Event of Default under this 4.10. 4.27 Federal Trade Commission Action. The Federal Trade Commission or any other governmental agency shall commence any action against the Borrower or any or its Subsidiaries, the effect of any such action, or any judgment, order or settlement resulting therefrom, on the Borrower or any such Subsidiary is to restrain or deprive the Borrower and its Subsidiaries from utilizing any substantial portion of their assets determined on a consolidated basis. 4.28 Cross-Default. An Event of Default, under and as defined in any of (i) any Secured Convertible Term Note, dated the date hereof, issued by EPXR and Voxx to Laurus (as amended, modified or supplemented from time to time, the "2005 Notes"), (ii) the Laurus Securities Purchase Agreement or (iii) the Related Agreements referred to in the Laurus Securities Purchase Agreement, shall have occurred and be continuing. DEFAULT RELATED PROVISIONS 4.12 Payment Grace Period. Following the occurrence and continuance of an Event of Default beyond any applicable cure period hereunder, the Borrower shall pay the Holder a default interest rate of two percent (2%) per month on all amounts due and owing under the Note, which default interest shall be payable upon demand. 4.13 Conversion Privileges. The conversion privileges set forth in Article III shall remain in full force and effect immediately from the date hereof and until this Note is paid in full. 4.14 Cumulative Remedies. The remedies under this Note shall be cumulative. ARTICLE V MISCELLANEOUS 5.1 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available. 5.2 Notices. Any notice herein required or permitted to be given shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Borrower at the address provided in the Purchase Agreement executed in connection herewith, and to the Holder at the address provided in the Purchase Agreement for such Holder, with a copy to John E. Tucker, Esq., 825 Third Avenue, 14th Floor, New York, New York 10022, facsimile number (212) 541-4434, or at such other address as the Borrower or the Holder may designate by ten days advance written notice to the other parties hereto. A Notice of Conversion shall be deemed given when made to the Borrower pursuant to the Purchase Agreement. 5.3 Amendment Provision. The term "Note" and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented, and any successor instrument issued pursuant to Section 3.5 hereof, as it may be amended or supplemented. 5.4 Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns, and may be assigned by the Holder in accordance with the requirements of the Purchase Agreement. This Note shall not be assigned by the Borrower without the consent of the Holder. 5.5 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of New York, without regard to principles of conflicts of laws. Except as set forth below in this Section 5.5, any and all disputes, controversies and claims that the Borrower or any of its Subsidiaries may assert against the Holder arising out of or relating to this Note, the Purchase Agreement or any other Related Agreement shall be determined exclusively by arbitration (each such arbitration, an "Arbitration") in New York City before a panel of three neutral arbitrators agreed to by the Holder and the Borrower (collectively, the "Arbitrators") in accordance with and pursuant to the then existing commercial arbitration rules of the American Arbitration Association. The Borrower (on its behalf and on behalf of its subsidiaries) hereby irrevocably waives any right to assert such claims in any other forum. The Arbitrators shall have the power in their discretion to award specific performance or injunctive relief (but shall not have the power to render any incidental, special or punitive damages) and reasonable attorneys' fees and expenses to any party in any arbitration. The Arbitrators may not change, modify or alter any express condition, term or provision of this Note, the Purchase Agreement or of any other Related Agreement nor shall they have the power to render any award against the Holder that would have such effect. Each Arbitration award shall be final and binding upon the parties subject thereto and judgment may be entered thereon in any court of competent jurisdiction. The service of any notice, process, motion or other document in connection with an Arbitration or for the enforcement of any Arbitration award may be made in the same manner as communications may be given under Section 5.2 hereof. Notwithstanding the foregoing, the provisions of this Section 5.5 nor any other provision contained in this Note, the Purchase Agreement or in any other Related Agreement shall limit in any manner whatsoever the Holder's right to commence an action against or in connection with the Borrower, any of its Subsidiaries or their respective properties in any court of competent jurisdiction or otherwise utilize judicial process in connection with or arising out of the Holder's rights and remedies under this Note, the Purchase Agreement and/or any Related Agreement or otherwise (any such action, a "Court Action"). Court Actions may be brought by the Holder in any state or federal court of competent jurisdiction and the Borrower (on its behalf and on behalf of its Subsidiaries) irrevocably submits to the jurisdiction of such state and federal courts and irrevocably waives any claim or defense of inconvenient forum or lack of personal jurisdiction in such forum or right of removal or right to jury trial under any applicable law or decision or otherwise. Service of any notice, process, motion or other document in connection with a Court Action may be made in the same manner as communications may be given under Section 5.2. In addition, the Holder may serve process in any other manner permitted under applicable law. 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 Note 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 unenforceability of any other provision of this Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Borrower in any other jurisdiction to collect on the Borrower's obligations to Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court in favor of the Holder. 5.6 Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower. 5.7 Security Interest and Guarantee. The Holder has been granted a security interest (i) in certain assets of VOXX and its Subsidiaries as more fully described in the Master Security Agreement dated as of the date hereof and (ii) pursuant to the Stock Pledge Agreement dated as of the date hereof. The Obligations of the Borrower under this Note are guaranteed pursuant to the Guaranty dated as of the date hereof. 5.20 Construction. Each party acknowledges that its legal counsel participated in the preparation of this Note 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 Note to favor any party against the other. 5.21 Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay to Holder reasonable costs of collection, including reasonable attorney's fees. 5.22 Joint and Several Obligations. All obligations of VOXX and EPXR as co-borrowers under this Note and the Related Agreements (the "Obligations") shall be joint and several obligations, and the Borrower shall make payment upon the maturity of the Obligations by acceleration or otherwise, and such obligation and liability on the part of the Borrower shall in no way be affected by any extensions, renewals and forbearance granted by the Holder to the Borrower, failure of Holder to give either EPXR or VOXX any notice, any failure of Holder to pursue to preserve its rights against either EPXR and/or VOXX, the release by Holder of any collateral now or thereafter acquired from either EPXR, VOXX and/or any other subsidiary of EPXR, and such agreement by each of EPXR and VOXX to pay upon any notice issued pursuant thereto is unconditional and unaffected by prior recourse by Holder to either EPXR, VOXX, or any other subsidiary of EPXR or any collateral for the Obligations or the lack thereof. Each of EPXR and VOXX expressly waives any and all rights of subrogation, reimbursement, indemnity, exoneration, contribution or any other claim which each of EPXR and/or VOXX may now or hereafter have against the other or other person or entity directly or contingently liable for the Obligations, or against or with respect to any other's property (including, without limitation, any property which is collateral for the Obligations), arising from the existence or performance of this Note, the Purchase Agreement or any other Related Agreement, until all Obligations have been indefeasibly paid in full and this Note, the Purchase Agreement and the other Related Agreements have been irrevocably terminated. [Balance of page intentionally left blank; signature page follows.] IN WITNESS WHEREOF, the Borrower has caused this Convertible Term Note to be signed in its name effective as of this ___ day of April, 2005. EPIXTAR CORP. By: /s/ Ilene Kaminsky ------------------------------- Name: Ilene Kaminsky Title:CEO WITNESS: /s/ Witness - ------------------------------- VOXX CORPORATION By: /s/ Ilene Kaminsky ------------------------------- Name: Ilene Kaminsky Title: CEO WITNESS: /s/ Witness - ------------------------------- EXHIBIT A NOTICE OF CONVERSION (To be executed by the Holder in order to convert all or part of the Note into Common Stock [Name and Address of Holder] The Undersigned hereby converts $_________ of the principal due on [specify applicable Repayment Date] under the Convertible Term Note issued by Epixtar Corp. and Voxx Corporation dated __________ __, 2005 by delivery of Shares of Common Stock of Epixtar Corp. or Voxx Corporation, as applicable, on and subject to the conditions set forth in Article III of such Note. 1. Date of Conversion _______________________ 2. Shares To Be Delivered: _______________________ By: -------------------------------- Name: ------------------------------ Title: ----------------------------- EXHIBIT B CONVERSION NOTICE (To be executed by the Holder in order to convert all or part of a Monthly Amount into Common Stock) [Name and Address of Holder] Holder hereby converts $_________ of the Monthly Amount due on [specify applicable Repayment Date] under the Convertible Term Note issued by Epixtar Corp. and Voxx Corporation dated ____________ __, 2005 by delivery of Shares of Common Stock of Epixtar Corp. or Voxx Corporation, as applicable, on and subject to the conditions set forth in Article III of such Note. 1. Fixed Conversion Price: $_______________________ 2. Amount to be paid: $_______________________ 3. Shares To Be Delivered (2 divided by 1): _____________________ 4. Cash payment to be made by Borrower: $_____________________ Date: ____________ Sands Brothers Venture Capital IV LLC By: ---------------------------------- Name: -------------------------------- Title: ------------------------------- EX-4.13.19 20 b406530ex4_13-19.txt EXHIBIT 4.13.19 EXHIBIT 4.13.19 THIS OPTION AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS OPTION AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS OPTION MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS OPTION UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO VOXX CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. Right to Purchase up to 59,529 Shares of Common Stock of Voxx Corporation (subject to adjustment as provided herein) OPTION No. _________________ Issue Date: April 29, (2005) VOXX CORPORATION, a corporation organized under the laws of the State of Florida ("Company"), hereby certifies that, for value received, Sands Brothers Venture Capital LLC, 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 Option and at any time or from time to time, 59,529 fully paid and nonassessable shares of Common Stock (as hereinafter defined), $0.001 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: 2. The term "Company" shall include Voxx Corporation and any corporation that shall succeed, or assume the obligations of, Voxx Corporation hereunder. 3. The term "Common Stock" includes (i) the Company's Common Stock, $0.001 par value 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. 4. The "Exercise Price" applicable under this Option shall be a price of $0.001 per share. (5. 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 at any time shall be entitled to receive, or shall have received, on the exercise of the Option, in lieu of or in addition to Common Stock, or 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. 74. Exercise of Option. 74.1 Number of Shares Issuable upon Exercise. From and after the date hereof, the Holder shall be entitled to receive, upon exercise of this Option 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"), shares of Common Stock of the Company, subject to adjustment pursuant to Section 4. 74.2 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 quoted on the NASD Over The Counter 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 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 Option are outstanding at the Determination Date. 74.3 Company Acknowledgment. The Company will, at the time of the exercise of the Option, upon the request of the Holder hereof acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of the Option. If the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights. 74.4 Trustee for Option Holders. In the event that a bank or trust company shall have been appointed as trustee for the Holder of the Option pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of an option 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 Option pursuant to this Section (1.) 75. Procedure for Exercise(.) 75.1 Delivery of Stock Certificates, Etc., on Exercise. The Company agrees that the shares of Common Stock purchased upon exercise of this Option 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 Option shall have been surrendered and payment made for such shares in accordance herewith. As soon as practicable after the exercise of this Option 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. 75.2 Exercise. (a) Payment shall be made in cash or by certified or official bank check payable to the order of the Company equal to the applicable aggregate Exercise Price for the number of shares of Common Stock 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 Option) 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. 76. Effect of Reorganization, Etc.; Adjustment of Exercise Price. 76.1 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, 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 Option, immediately prior thereto, all subject to further adjustment thereafter as provided in Section (4.) 76.2 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 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 (the "Trustee"). 76.3 Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Option 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 Option 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 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 Option as provided in Section 4. In the event this Option 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 will be delivered to Holder or the Trustee as contemplated by Section (3.2.) 77. 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 or any preferred stock issued by the Company, (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 (each of the preceding clauses (a) through (c), inclusive, an "Event"), then, in each such event, the number of shares of Common Stock that the Holder shall thereafter, on the exercise hereof as provided in Section 1, be entitled to receive shall be increased or decreased to a number determined by multiplying the number of shares of Common Stock that would, immediately prior to such Event, be issuable upon the exercise of this Option by a fraction of which (a) the numerator is the number of issued and outstanding shares of Common Stock immediately prior to such Event, and (b) the denominator is the number of issued and outstanding shares of Common Stock immediately after such Event. 78. 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 Option, 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 Option 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 Option, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Option. The Company will forthwith mail a copy of each such certificate to the Holder and any Option agent of the Company (appointed pursuant to Section 10 hereof). 79. Reservation of Stock, Etc., Issuable on Exercise of Option. The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Option, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Option. 80. Assignment; Exchange of Option. Subject to compliance with applicable securities laws, this Option, 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 Option, 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 Option 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 Option so surrendered by the Transferor. 81. Replacement of Option. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Option and, in the case of any such loss, theft or destruction of this Option, 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 Option, the Company at its expense will execute and deliver, in lieu thereof, a new Option of like tenor. 82. Registration Rights. The Holder has been granted certain registration rights by the Company. These registration rights are set forth in a VOXX Registration Rights Agreement entered into by the Company and Holder dated as of even date of this Option. 83. Option Agent. The Company may, by written notice to each Holder of the Option, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Option pursuant to Section 1, exchanging this Option pursuant to Section 7, and replacing this Option pursuant to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 84. Transfer on the Company's Books. Until this Option 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. 85. Notices, Etc. All notices and other communications from the Company to the Holder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the Holder, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by first class registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt, 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 who has so furnished an address to the Company. 86. Miscellaneous. THIS OPTION 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 OPTION 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 Option 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 Option 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 Option 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 Option. The headings in this Option 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 acknowledges that legal counsel participated in the preparation of this Option 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 Option to favor any party against the other party. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.] IN WITNESS WHEREOF, the Company has executed this Option as of the date first written above. VOXX CORPORATION WITNESS: By: /s/ Ilene Kaminsky ------------------ Name: Ilene Kaminsky ------------------ /s/ Witness Title: CEO - ----------- ------------------ EXHIBIT A FORM OF SUBSCRIPTION (To Be Signed Only On Exercise Of Options) TO: VOXX Corporation Attention: Chief Financial Officer The undersigned, pursuant to the provisions set forth in the attached Option (No. ____), hereby irrevocably elects to purchase (check applicable box): ________ ________ shares of the Common Stock covered by such Option. The undersigned herewith makes payment of the full Exercise Price for such shares at the price per share provided for in such Option, which is $___________. Such payment takes the form of lawful money of the United States. 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 Option 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 Option) Address: -------------------------------------- -------------------------------------- EXHIBIT B FORM OF TRANSFEROR ENDORSEMENT (To Be Signed Only On Transfer Of Option) 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 Option to purchase the percentage and number of shares of Common Stock of VOXX CORPORATION into which the within Option 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 VOXX CORPORATION with full power of substitution in the premises. Percentage Number Transferees Address Transferred Transferred - --------------- ------------------- ----------------- --------------- - --------------- ------------------- ----------------- --------------- - --------------- ------------------- ----------------- --------------- - --------------- ------------------- ----------------- --------------- Dated: ------------------- ----------------------------------------------- (Signature must conform to name of Holder as specified on the face of the Option) Address: -------------------------------------- -------------------------------------- SIGNED IN THE PRESENCE OF: ----------------------------------------------- (Name) ACCEPTED AND AGREED: [TRANSFEREE] - ----------------------------- (Name) EX-4.13.20 21 b406530ex4_13-20.txt EXHIBIT 4.13.20 EXHIBIT 4.13.20 THIS OPTION AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS OPTION AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS OPTION MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS OPTION UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO VOXX CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. Right to Purchase up to 29,764 Shares of Common Stock of Voxx Corporation (subject to adjustment as provided herein) OPTION No. _________________ Issue Date: April 29, 2005 VOXX CORPORATION, a corporation organized under the laws of the State of Florida ("Company"), hereby certifies that, for value received, Sands Brothers Venture Capital II LLC, 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 Option and at any time or from time to time, 29,764 fully paid and nonassessable shares of Common Stock (as hereinafter defined), $0.001 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: 6. The term "Company" shall include Voxx Corporation and any corporation that shall succeed, or assume the obligations of, Voxx Corporation hereunder. 7. The term "Common Stock" includes (i) the Company's Common Stock, $0.001 par value 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. 8. The "Exercise Price" applicable under this Option shall be a price of $0.001 per share. 9. 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 at any time shall be entitled to receive, or shall have received, on the exercise of the Option, in lieu of or in addition to Common Stock, or 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. 87. Exercise of Option. 87.1 Number of Shares Issuable upon Exercise. From and after the date hereof, the Holder shall be entitled to receive, upon exercise of this Option 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"), shares of Common Stock of the Company, subject to adjustment pursuant to Section 4. 87.2 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 quoted on the NASD Over The Counter 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 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 Option are outstanding at the Determination Date. 87.3 Company Acknowledgment. The Company will, at the time of the exercise of the Option, upon the request of the Holder hereof acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of the Option. If the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights. 87.4 Trustee for Option Holders. In the event that a bank or trust company shall have been appointed as trustee for the Holder of the Option pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of an option 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 Option pursuant to this Section 1. 88. Procedure for Exercise. 88.1 Delivery of Stock Certificates, Etc., on Exercise. The Company agrees that the shares of Common Stock purchased upon exercise of this Option 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 Option shall have been surrendered and payment made for such shares in accordance herewith. As soon as practicable after the exercise of this Option 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. 88.2 Exercise. (a) Payment shall be made in cash or by certified or official bank check payable to the order of the Company equal to the applicable aggregate Exercise Price for the number of shares of Common Stock 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 Option) 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. 89. Effect of Reorganization, Etc.; Adjustment of Exercise Price. 89.1 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, 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 Option, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 4. 89.2 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 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 (the "Trustee"). 89.3 Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Option 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 Option 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 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 Option as provided in Section 4. In the event this Option 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 will be delivered to Holder or the Trustee as contemplated by Section 3.2. 90. 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 or any preferred stock issued by the Company, (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 (each of the preceding clauses (a) through (c), inclusive, an "Event"), then, in each such event, the number of shares of Common Stock that the Holder shall thereafter, on the exercise hereof as provided in Section 1, be entitled to receive shall be increased or decreased to a number determined by multiplying the number of shares of Common Stock that would, immediately prior to such Event, be issuable upon the exercise of this Option by a fraction of which (a) the numerator is the number of issued and outstanding shares of Common Stock immediately prior to such Event, and (b) the denominator is the number of issued and outstanding shares of Common Stock immediately after such Event. 91. 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 Option, 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 Option 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 Option, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Option. The Company will forthwith mail a copy of each such certificate to the Holder and any Option agent of the Company (appointed pursuant to Section 10 hereof). 92. Reservation of Stock, Etc., Issuable on Exercise of Option. The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Option, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Option. 93. Assignment; Exchange of Option. Subject to compliance with applicable securities laws, this Option, 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 Option, 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 Option 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 Option so surrendered by the Transferor. 94. Replacement of Option. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Option and, in the case of any such loss, theft or destruction of this Option, 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 Option, the Company at its expense will execute and deliver, in lieu thereof, a new Option of like tenor. 95. Registration Rights. The Holder has been granted certain registration rights by the Company. These registration rights are set forth in a VOXX Registration Rights Agreement entered into by the Company and Holder dated as of even date of this Option. 96. Option Agent. The Company may, by written notice to each Holder of the Option, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Option pursuant to Section 1, exchanging this Option pursuant to Section 7, and replacing this Option pursuant to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 97. Transfer on the Company's Books. Until this Option 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. 98. Notices, Etc. All notices and other communications from the Company to the Holder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the Holder, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by first class registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt, 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 who has so furnished an address to the Company. 99. Miscellaneous. THIS OPTION 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 OPTION 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 Option 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 Option 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 Option 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 Option. The headings in this Option 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 acknowledges that legal counsel participated in the preparation of this Option 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 Option to favor any party against the other party. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.] IN WITNESS WHEREOF, the Company has executed this Option as of the date first written above. VOXX CORPORATION WITNESS: By: /s/ Ilene Kaminsky ---------------------- Name: Ilene Kaminsky ---------------------- /s/ Witness Title: CEO - ----------------- ---------------------- EXHIBIT A FORM OF SUBSCRIPTION (To Be Signed Only On Exercise Of Options) TO: VOXX Corporation Attention: Chief Financial Officer The undersigned, pursuant to the provisions set forth in the attached Option (No. ____), hereby irrevocably elects to purchase (check applicable box): ________ ________ shares of the Common Stock covered by such Option. The undersigned herewith makes payment of the full Exercise Price for such shares at the price per share provided for in such Option, which is $___________. Such payment takes the form of lawful money of the United States. 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 Option 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 Option) Address: ------------------------------------- ------------------------------------- EXHIBIT B FORM OF TRANSFEROR ENDORSEMENT (To Be Signed Only On Transfer Of Option) 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 Option to purchase the percentage and number of shares of Common Stock of VOXX CORPORATION into which the within Option 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 VOXX CORPORATION with full power of substitution in the premises. Percentage Number Transferees Address Transferred Transferred - ----------- ------- ----------- ----------- - --------------- ------------------- ----------------- --------------- - --------------- ------------------- ----------------- --------------- - --------------- ------------------- ----------------- --------------- - --------------- ------------------- ----------------- --------------- Dated: ------------------- ----------------------------------------------- (Signature must conform to name of Holder as specified on the face of the Option) Address: -------------------------------------- -------------------------------------- SIGNED IN THE PRESENCE OF: ----------------------------------------------- (Name) ACCEPTED AND AGREED: [TRANSFEREE] - ---------------- (NAME) EX-4.13.21 22 b406530ex4_13-21.txt EXHIBIT 4.13.21 EXHIBIT 4.13.21 THIS OPTION AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS OPTION AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS OPTION MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS OPTION UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO VOXX CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. Right to Purchase up to 714,348 Shares of Common Stock of Voxx Corporation (subject to adjustment as provided herein) OPTION No. _________________ Issue Date: April 29, 2005 VOXX CORPORATION, a corporation organized under the laws of the State of Florida ("Company"), hereby certifies that, for value received, Sands Brothers Venture Capital III LLC, 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 Option and at any time or from time to time, 714,348 fully paid and nonassessable shares of Common Stock (as hereinafter defined), $0.001 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: 10. The term "Company" shall include Voxx Corporation and any corporation that shall succeed, or assume the obligations of, Voxx Corporation hereunder. 11. The term "Common Stock" includes (i) the Company's Common Stock, $0.001 par value 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. 12. The "Exercise Price" applicable under this Option shall be a price of $0.001 per share. 13. 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 at any time shall be entitled to receive, or shall have received, on the exercise of the Option, in lieu of or in addition to Common Stock, or 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. 100. Exercise of Option. 100.1 Number of Shares Issuable upon Exercise. From and after the date hereof, the Holder shall be entitled to receive, upon exercise of this Option 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"), shares of Common Stock of the Company, subject to adjustment pursuant to Section 4. 100.2 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 quoted on the NASD Over The Counter 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 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 Option are outstanding at the Determination Date. 100.3 Company Acknowledgment. The Company will, at the time of the exercise of the Option, upon the request of the Holder hereof acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of the Option. If the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights. 100.4 Trustee for Option Holders. In the event that a bank or trust company shall have been appointed as trustee for the Holder of the Option pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of an option 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 Option pursuant to this Section 1. 101. Procedure for Exercise. 101.1 Delivery of Stock Certificates, Etc., on Exercise. The Company agrees that the shares of Common Stock purchased upon exercise of this Option 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 Option shall have been surrendered and payment made for such shares in accordance herewith. As soon as practicable after the exercise of this Option 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. 101.2 Exercise. (a) Payment shall be made in cash or by certified or official bank check payable to the order of the Company equal to the applicable aggregate Exercise Price for the number of shares of Common Stock 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 Option) 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. 102. Effect of Reorganization, Etc.; Adjustment of Exercise Price. 102.1 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, 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 Option, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 4. 102.2 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 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 (the "Trustee"). 102.3 Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Option 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 Option 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 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 Option as provided in Section 4. In the event this Option 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 will be delivered to Holder or the Trustee as contemplated by Section 3.2. 103. 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 or any preferred stock issued by the Company, (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 (each of the preceding clauses (a) through (c), inclusive, an "Event"), then, in each such event, the number of shares of Common Stock that the Holder shall thereafter, on the exercise hereof as provided in Section 1, be entitled to receive shall be increased or decreased to a number determined by multiplying the number of shares of Common Stock that would, immediately prior to such Event, be issuable upon the exercise of this Option by a fraction of which (a) the numerator is the number of issued and outstanding shares of Common Stock immediately prior to such Event, and (b) the denominator is the number of issued and outstanding shares of Common Stock immediately after such Event. 104. 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 Option, 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 Option 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 Option, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Option. The Company will forthwith mail a copy of each such certificate to the Holder and any Option agent of the Company (appointed pursuant to Section 10 hereof). 105. Reservation of Stock, Etc., Issuable on Exercise of Option. The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Option, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Option. 106. Assignment; Exchange of Option. Subject to compliance with applicable securities laws, this Option, 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 Option, 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 Option 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 Option so surrendered by the Transferor. 107. Replacement of Option. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Option and, in the case of any such loss, theft or destruction of this Option, 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 Option, the Company at its expense will execute and deliver, in lieu thereof, a new Option of like tenor. 108. Registration Rights. The Holder has been granted certain registration rights by the Company. These registration rights are set forth in a VOXX Registration Rights Agreement entered into by the Company and Holder dated as of even date of this Option. 109. Option Agent. The Company may, by written notice to each Holder of the Option, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Option pursuant to Section 1, exchanging this Option pursuant to Section 7, and replacing this Option pursuant to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 110. Transfer on the Company's Books. Until this Option 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. 111. Notices, Etc. All notices and other communications from the Company to the Holder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the Holder, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by first class registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt, 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 who has so furnished an address to the Company. 112. Miscellaneous. THIS OPTION 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 OPTION 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 Option 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 Option 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 Option 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 Option. The headings in this Option 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 acknowledges that legal counsel participated in the preparation of this Option 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 Option to favor any party against the other party. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.] IN WITNESS WHEREOF, the Company has executed this Option as of the date first written above. VOXX CORPORATION WITNESS: By: /s/ Ilene Kaminsky Name: Ilene Kaminsky /s/ Witness Title: CEO EXHIBIT A FORM OF SUBSCRIPTION (To Be Signed Only On Exercise Of Options) TO: VOXX Corporation Attention: Chief Financial Officer The undersigned, pursuant to the provisions set forth in the attached Option (No. ____), hereby irrevocably elects to purchase (check applicable box): ________ ________ shares of the Common Stock covered by such Option. The undersigned herewith makes payment of the full Exercise Price for such shares at the price per share provided for in such Option, which is $___________. Such payment takes the form of lawful money of the United States. 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 Option 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 Option) Address: _________________________________ _________________________________ EXHIBIT B - -------------------------------------------------------------------------------- FORM OF TRANSFEROR ENDORSEMENT (To Be Signed Only On Transfer Of Option) 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 Option to purchase the percentage and number of shares of Common Stock of VOXX CORPORATION into which the within Option 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 VOXX CORPORATION with full power of substitution in the premises.
Percentage Number Transferees Address Transferred Transferred - ----------- ------- ----------- ----------- ______________________ ________________________ ______________ ________________ ______________________ ________________________ ______________ ________________ ______________________ ________________________ ______________ ________________ ______________________ ________________________ ______________ ________________
Dated:________________________ __________________________________________ (Signature must conform to name of Holder as specified on the face of the Option) Address: _________________________________ _________________________________ SIGNED IN THE PRESENCE OF: __________________________________________ (Name) ACCEPTED AND AGREED: [TRANSFEREE] __________________________________________ (Name) EX-4.13.22 23 b406530ex4_13-22.txt EXHIBIT 4.13.22 EXHIBIT 4.13.22 THIS OPTION AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS OPTION AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS OPTION MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS OPTION UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO VOXX CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. Right to Purchase up to 89,293 Shares of Common Stock of Voxx Corporation (subject to adjustment as provided herein) OPTION No. _________________ Issue Date: April 29, 2005 VOXX CORPORATION, a corporation organized under the laws of the State of Florida ("Company"), hereby certifies that, for value received, Sands Brothers Venture Capital IV LLC, 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 Option and at any time or from time to time, 89,293 fully paid and nonassessable shares of Common Stock (as hereinafter defined), $0.001 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: 14. The term "Company" shall include Voxx Corporation and any corporation that shall succeed, or assume the obligations of, Voxx Corporation hereunder. 15. The term "Common Stock" includes (i) the Company's Common Stock, $0.001 par value 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. 16. The "Exercise Price" applicable under this Option shall be a price of $0.001 per share. 17. 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 at any time shall be entitled to receive, or shall have received, on the exercise of the Option, in lieu of or in addition to Common Stock, or 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. 113. Exercise of Option. 113.1 Number of Shares Issuable upon Exercise. From and after the date hereof, the Holder shall be entitled to receive, upon exercise of this Option 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"), shares of Common Stock of the Company, subject to adjustment pursuant to Section 4. 113.2 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 quoted on the NASD Over The Counter 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 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 Option are outstanding at the Determination Date. 113.3 Company Acknowledgment. The Company will, at the time of the exercise of the Option, upon the request of the Holder hereof acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of the Option. If the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights. 113.4 Trustee for Option Holders. In the event that a bank or trust company shall have been appointed as trustee for the Holder of the Option pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of an option 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 Option pursuant to this Section 1. 114. Procedure for Exercise. 114.1 Delivery of Stock Certificates, Etc., on Exercise. The Company agrees that the shares of Common Stock purchased upon exercise of this Option 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 Option shall have been surrendered and payment made for such shares in accordance herewith. As soon as practicable after the exercise of this Option 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. 114.2 Exercise. (a) Payment shall be made in cash or by certified or official bank check payable to the order of the Company equal to the applicable aggregate Exercise Price for the number of shares of Common Stock 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 Option) 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. 115. Effect of Reorganization, Etc.; Adjustment of Exercise Price. 115.1 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, 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 Option, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 4. 115.2 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 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 (the "Trustee"). 115.3 Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Option 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 Option 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 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 Option as provided in Section 4. In the event this Option 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 will be delivered to Holder or the Trustee as contemplated by Section 3.2. 116. 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 or any preferred stock issued by the Company, (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 (each of the preceding clauses (a) through (c), inclusive, an "Event"), then, in each such event, the number of shares of Common Stock that the Holder shall thereafter, on the exercise hereof as provided in Section 1, be entitled to receive shall be increased or decreased to a number determined by multiplying the number of shares of Common Stock that would, immediately prior to such Event, be issuable upon the exercise of this Option by a fraction of which (a) the numerator is the number of issued and outstanding shares of Common Stock immediately prior to such Event, and (b) the denominator is the number of issued and outstanding shares of Common Stock immediately after such Event. 117. 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 Option, 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 Option 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 Option, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Option. The Company will forthwith mail a copy of each such certificate to the Holder and any Option agent of the Company (appointed pursuant to Section 10 hereof). 118. Reservation of Stock, Etc., Issuable on Exercise of Option. The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of the Option, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of the Option. 119. Assignment; Exchange of Option. Subject to compliance with applicable securities laws, this Option, 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 Option, 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 Option 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 Option so surrendered by the Transferor. 120. Replacement of Option. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Option and, in the case of any such loss, theft or destruction of this Option, 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 Option, the Company at its expense will execute and deliver, in lieu thereof, a new Option of like tenor. 121. Registration Rights. The Holder has been granted certain registration rights by the Company. These registration rights are set forth in a VOXX Registration Rights Agreement entered into by the Company and Holder dated as of even date of this Option. 122. Option Agent. The Company may, by written notice to each Holder of the Option, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Option pursuant to Section 1, exchanging this Option pursuant to Section 7, and replacing this Option pursuant to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 123. Transfer on the Company's Books. Until this Option 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. 124. Notices, Etc. All notices and other communications from the Company to the Holder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the Holder, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by first class registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt, 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 who has so furnished an address to the Company. 125. Miscellaneous. THIS OPTION 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 OPTION 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 Option 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 Option 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 Option 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 Option. The headings in this Option 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 acknowledges that legal counsel participated in the preparation of this Option 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 Option to favor any party against the other party. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS.] IN WITNESS WHEREOF, the Company has executed this Option as of the date first written above. VOXX CORPORATION WITNESS: By: /s/ Ilene Kaminsky Name: Ilene Kaminsky /s/ Witness Title: CEO EXHIBIT A FORM OF SUBSCRIPTION (To Be Signed Only On Exercise Of Options) TO: VOXX Corporation Attention: Chief Financial Officer The undersigned, pursuant to the provisions set forth in the attached Option (No. ____), hereby irrevocably elects to purchase (check applicable box): ________ ________ shares of the Common Stock covered by such Option. The undersigned herewith makes payment of the full Exercise Price for such shares at the price per share provided for in such Option, which is $___________. Such payment takes the form of lawful money of the United States. 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 Option 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 Option) Address: ____________________________________ ____________________________________ EXHIBIT B FORM OF TRANSFEROR ENDORSEMENT (To Be Signed Only On Transfer Of Option) 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 Option to purchase the percentage and number of shares of Common Stock of VOXX CORPORATION into which the within Option 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 VOXX CORPORATION with full power of substitution in the premises.
Percentage Number Transferees Address Transferred Transferred - ----------- ------- ----------- ----------- ____________________ _______________________ ________________ ________________ ____________________ _______________________ ________________ ________________ ____________________ _______________________ ________________ ________________ ____________________ _______________________ ________________ ________________
Dated: _____________________ _____________________________________________ (Signature must conform to name of Holder as specified on the face of the Option) Address: ____________________________________ ____________________________________ SIGNED IN THE PRESENCE OF: _____________________________________________ (Name) ACCEPTED AND AGREED: [TRANSFEREE] - ----------------------------------------------- (Name) EX-4.13.23 24 b406530ex4_13-23.txt EXHIBIT 4.13.23 EXHIBIT 4.13.23 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 VOXX CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED. Right to Purchase up to 327,409 Shares of Common Stock of Voxx Corporation (subject to adjustment as provided herein) COMMON STOCK PURCHASE WARRANT No. _________________ Issue Date: April 29, 2005 VOXX CORPORATION, a corporation organized under the laws of the State of Florida ("VOXX"), hereby certifies that, for value received, Laidlaw & Company (UK) 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 close of business April 29, 2010 (the "Expiration Date"), 327,409 fully paid and nonassessable shares of Common Stock (as hereinafter defined), $0.001 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 VOXX and any corporation which shall succeed or assume the obligations of VOXX hereunder. (b) The term "Common Stock" includes (i) the Company's Common Stock, par value $0.001 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 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: (i) on and after the date of the consummation of an initial public offering of the Common Stock (the "VOXX IPO Date"), a price per share equal to the initial public offering price of the Common Stock and (ii) prior to the VOXX IPO Date, a price per share equal to the remainder of (x) $50,000,000 divided by (y) the aggregate number of VOXX shares of Common Stock issued and outstanding on the date of such exercise (calculated on a fully diluted basis and, in any event, assuming the full conversion or exercise, as the case may be, of all securities issued by the Company which are convertible or exercisable into Common Stock). 126. Exercise of Warrant. 126.1 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"), shares of Common Stock of the Company, subject to adjustment pursuant to Section 4. 126.2 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 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. 126.3 Company Acknowledgment. The Company will, at the time of the exercise of the Warrant, upon the request of the holder hereof acknowledge in writing its continuing obligation to afford to such holder any rights to which such holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant. If the holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such holder any such rights. 126.4 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. 127. Procedure for Exercise. 127.1 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. 127.2 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) by delivery of the Warrant, or shares of Common Stock and/or Common Stock receivable upon exercise of the Warrant in accordance with Section (b) 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 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) 128. Effect of Reorganization, Etc.; Adjustment of Exercise Price. 128.1 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. 128.2 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"). 128.3 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 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. 129. 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. 130. 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, 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). 131. 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. 132. 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. 133. 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. 134. 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 Purchaser dated as of even date of this Warrant. 135. [Intentionally Deleted] 136. 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 issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 137. 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. 138. 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. 139. 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. Except as set forth below in this Section 15, any and all disputes, controversies and claims that the Company may assert against the any Holder arising out of or relating to this Warrant shall be determined exclusively by arbitration (each such arbitration, an "Arbitration") in New York City before a panel of three neutral arbitrators agreed to by the Purchaser and the Company (collectively, the "Arbitrators") in accordance with and pursuant to the then existing commercial arbitration rules of the American Arbitration Association. The Company hereby irrevocably waives any right to assert such claims in any other forum. The Arbitrators shall have the power in their discretion to award specific performance or injunctive relief (but shall not have the power to render any incidental, special or punitive damages) and reasonable attorneys' fees and expenses to any party in any arbitration. The Arbitrators may not change, modify or alter any express condition, term or provision of this Warrant nor shall they have the power to render any award against any Holder that would have such effect. Each Arbitration award shall be final and binding upon the parties subject thereto and judgment may be entered thereon in any court of competent jurisdiction. The service of any notice, process, motion or other document in connection with an Arbitration or for the enforcement of any Arbitration award may be made in the same manner as communications may be given under Section 13 hereof. Notwithstanding the foregoing, the provisions of this Section 15 nor any other provision contained in this Warrant shall limit in any manner whatsoever any Holder's right to commence an action against or in connection with the Company or its properties in any court of competent jurisdiction or otherwise utilize judicial process in connection with or arising out of any Holder's rights and remedies under this Warrant or otherwise (any such action, a "Court Action"). Court Actions may be brought by any Holder in any state or federal court of competent jurisdiction and the Company irrevocably submits to the jurisdiction of such state and federal courts and irrevocably waives any claim or defense of inconvenient forum or lack of personal jurisdiction in such forum or right of removal or right to jury trial under any applicable law or decision or otherwise. Service of any notice, process, motion or other document in connection with a Court Action may be made in the same manner as communications may be given under Section 13. In addition, any Holder may serve process in any other manner permitted under applicable law. The individuals executing this Warrant on behalf of the Company agree to 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 acknowledges that 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.] IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above. VOXX CORPORATION By: /s/ Ilene Kaminsky ---------------------------- Name: Ilene Kaminsky ---------------------------- Title: CEO - --------------------------------------- ---------------------------- EXHIBIT A FORM OF SUBSCRIPTION (To Be Signed Only On Exercise Of Warrant) TO: VOXX CORPORATION 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: --------------------------- --------------------------- A-1 EXHIBIT B FORM OF TRANSFER OR 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 Voxx Corporation 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 Voxx Corporation with full power of substitution in the premises.
Percentage Number Transferees Address Transferred 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)
A-2 EX-4.13.24 25 b406530ex4_13-24.txt EXHIBIT 4.13.24 EXHIBIT 4.13.24 EPXR REGISTRATION RIGHTS AGREEMENT This EPXR Registration Rights Agreement (this "Agreement") is made and entered into as of April 29, 2005, by and between Epixtar Corp., a Florida corporation (the "Company"), and Sands Brothers Venture Capital LLC, Sands Brothers Venture Capital II LLC, Sands Brothers Venture Capital III LLC and Sands Brothers Venture Capital IV LLC (collectively, the "Purchaser"). This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof, by and between the Purchaser, Voxx Corporation, a Florida corporation, and the Company (as amended, modified or supplemented from time to time, the "Securities Purchase Agreement"), and pursuant to the Note referred to therein. The Company and the Purchaser hereby agree as follows: 140. Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Securities Purchase Agreement shall have the meanings given such terms in the Securities Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: "Commission" means the Securities and Exchange Commission. "Common Stock" means shares of the Company's common stock, par value $0.001 per share. "Effectiveness Date" means (i) with respect to the initial Registration Statement required to be filed hereunder, 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 Registration Statement required to be filed hereunder in respect of the shares of Common Stock issuable upon conversion of the Note, a date no later than thirty (30) days following the date hereof, and (ii) the 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 Note or otherwise, thirty (30) days after the occurrence such event or the date of the adjustment of the Fixed Conversion Price or Exercise Price, as the case may be. "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 arbitration, 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. "Registration Statement" means each registration statement required to be filed hereunder, including the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. "Rule 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 415" means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 424" means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Securities Act" means the Securities Act of 1933, as amended, and any successor statute. "Securities Purchase Agreement" has the meaning given to such term in the Preamble hereto. "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. 141. Registration. 141.1 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 S-1 or SB-2 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-1 or 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"). 141.2 If: (i) the Registration Statement is not filed on or prior to the Filing Date; (ii) the Registration Statement is not declared effective by the Commission by the Effectiveness Date; (iii) after the Registration Statement is filed with and declared effective by the Commission, the Registration Statement ceases to be effective (by suspension or otherwise) as to all Registrable Securities to which it is required to relate at any time prior to the expiration of the Effectiveness Period (without being succeeded immediately by an additional registration statement filed and declared effective) for a period of time which shall exceed 30 days in the aggregate per year or more than 20 consecutive calendar days (defined as a period of 365 days commencing on the date the Registration Statement is declared effective); or (iv) the Common Stock is not listed or quoted, or is suspended from trading on any Trading Market for a period of three (3) consecutive Trading Days (provided the Company shall not have been able to cure such trading suspension within 30 days of the notice thereof or list the Common Stock on another Trading Market); (any such failure or breach being referred to as an "Event," and for purposes of clause (i) or (ii) the date on which such Event occurs, or for purposes of clause (iii) the date which such 30 day or 20 consecutive day period (as the case may be) is exceeded, or for purposes of clause (iv) the date on which such three (3) Trading Day period is exceeded, being referred to as "Event Date"), then until the applicable Event is cured, the Company shall pay to each Holder an amount in cash, as liquidated damages and not as a penalty, equal to 2.0% for each thirty (30) day period (prorated for partial periods) on a daily basis of the original principal amount of the Note. While such Event continues, such liquidated damages shall be paid not less often than each thirty (30) days. Any unpaid liquidated damages as of the date when an Event has been cured by the Company shall be paid within three (3) days following the date on which such Event has been cured by the Company. (c) Within three business days of the Effectiveness Date, the Company shall cause its counsel to issue a blanket opinion in the form attached hereto as Exhibit A, to the transfer agent stating that the shares are subject to an effective registration statement and can be reissued free of restrictive legend upon notice of a sale by 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. 142. 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: 142.1 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; 142.2 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; 142.3 furnish to the Purchaser such number of copies of the Registration Statement and the Prospectus included therein (including each preliminary Prospectus) as the Purchaser reasonably may request to facilitate the public sale or disposition of the Registrable Securities covered by the Registration Statement; 142.4 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; 142.5 list the Registrable Securities covered by the Registration Statement with any securities exchange on which the Common Stock of the Company is then listed; 142.6 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 142.7 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. 143. 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. 144. Indemnification. 144.1 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. 144.2 In the event of a registration of the Registrable Securities under the Securities Act pursuant to this Agreement, the Purchaser will indemnify and hold harmless the Company, and its officers, directors and each other person, if any, who controls the Company within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact which was furnished in writing by the Purchaser to the Company expressly for use in (and such information is contained in) the Registration Statement under which such Registrable Securities were registered under the Securities Act pursuant to this Agreement, any preliminary Prospectus or final Prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such person for any reasonable legal or other expenses incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, provided, however, that the Purchaser will be liable in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished in writing to the Company by or on behalf of the Purchaser specifically for use in any such document. Notwithstanding the provisions of this paragraph, the Purchaser shall not be required to indemnify any person or entity in excess of the amount of the aggregate net proceeds received by the Purchaser in respect of Registrable Securities in connection with any such registration under the Securities Act. 144.3 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. 144.4 In order to provide for just and equitable contribution in the event of joint liability under the Securities Act in any case in which either (i) the Purchaser, or any officer, director or controlling person of the Purchaser, makes a claim for indemnification pursuant to this Section 5 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 5 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of the Purchaser or such officer, director or controlling person of the Purchaser in circumstances for which indemnification is provided under this Section 5; then, and in each such case, the Company and the Purchaser will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that the Purchaser is responsible only for the portion represented by the percentage that the public offering price of its securities offered by the Registration Statement bears to the public offering price of all securities offered by such Registration Statement, provided, however, that, in any such case, (A) the Purchaser will not be required to contribute any amount in excess of the public offering price of all such securities offered by it pursuant to such Registration Statement; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation. 145. Representations, Warranties and Covenants. 145.1 The Common Stock of the Company is registered pursuant to Section 12(b) or 12(g) of the Exchange Act and, except with respect to certain matters which the Company has disclosed to the Purchaser on Schedule 4.21 to the Securities Purchase Agreement, the Company has timely filed all proxy statements, reports, schedules, forms, statements and other documents required to be filed by it under the Exchange Act. The Company has filed (i) its Annual Report on Form 10-K for its fiscal year ended December 31, 2004 and (ii) its Quarterly Report on Form 10-Q for its fiscal quarter ended September 30, 2004, and (iii) the Form 8-K filings which it has made during the fiscal year 2005 to date (collectively, the "SEC Reports"). Each SEC Report was, at the time of its filing, in substantial compliance with the requirements of its respective form and none of the SEC Reports, nor the financial statements (and the notes thereto) included in the SEC Reports, as of their respective filing dates, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles ("GAAP") applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed) and fairly present in all material respects the financial condition, the results of operations and the cash flows of the Company and its subsidiaries, on a consolidated basis, as of, and for, the periods presented in each such SEC Report. 145.2 The Common Stock is traded on the NASD OTCBB and satisfies all requirements for the continuation of such trading. The Company has not received any notice that its Common Stock will not be eligible to be traded on the NASD OTCBB (except for prior notices which have been fully remedied) or that the Common Stock does not meet all requirements for the continuation of such trading. 145.3 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. 145.4 The Note and the shares of Common Stock which the Purchaser may acquire pursuant to 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 or as otherwise permitted by this Agreement, the Purchase Agreement or any Related Agreement. 145.5 The Company understands the nature of the Registrable Securities issuable upon the conversion of the Note 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. 145.6 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. 145.7 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. 146. Miscellaneous. 146.1 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. 146.2 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. 146.3 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. 146.4 Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of a Discontinuation Event (as defined below), such Holder will forthwith discontinue disposition of such Registrable Securities under the applicable Registration Statement until such Holder's receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph. For purposes of this Section 7(d), a "Discontinuation Event" shall mean (i) when the Commission notifies the Company whether there will be a "review" of such Registration Statement and whenever the Commission comments in writing on such Registration Statement (the Company shall provide true and complete copies thereof and all written responses thereto to each of the Holders); (ii) any request by the Commission or any other Federal or state governmental authority for amendments or supplements to such Registration Statement or Prospectus or for additional information; (iii) the issuance by the Commission of any stop order suspending the effectiveness of such Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and/or (v) the occurrence of any event or passage of time that makes the financial statements included in such Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 146.5 Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to each Holder written notice of such determination and, if within fifteen days after receipt of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such holder requests to be registered to the extent the Company may do so without violating registration rights of others which exist as of the date of this Agreement, subject to customary underwriter cutbacks applicable to all holders of registration rights and subject to obtaining any required the consent of any selling stockholder(s) to such inclusion under such registration statement. 146.6 Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of the then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of certain Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. 146.7 Notices. Any notice or request hereunder may be given to the Company or the Purchaser at the respective addresses set forth below or as may hereafter be specified in a notice designated as a change of address under this Section 7(g). Any notice or request hereunder shall be given by registered or certified mail, return receipt requested, hand delivery, overnight mail, Federal Express or other national overnight next day carrier (collectively, "Courier") or telecopy (confirmed by mail). Notices and requests shall be, in the case of those by hand delivery, deemed to have been given when delivered to any party to whom it is addressed, in the case of those by mail or overnight mail, deemed to have been given three (3) business days after the date when deposited in the mail or with the overnight mail carrier, in the case of a Courier, the next business day following timely delivery of the package with the Courier, and, in the case of a telecopy, when confirmed. The address for such notices and communications shall be as follows: If to the Company: Epixtar Corp. 11900 Biscayne Boulevard, Suite 700 Miami, Florida 33181 Attention: David Srour Facsimile: 305-503-8610 with a copy to: Michael DiGiovanna, Esq. 212 Carnegie Center Suite 206 Princeton, New Jersey 08540 Facsimile: 609-452-9473 If to a Purchaser: To the address set forth under such Purchaser name on the signature pages hereto. If to any other Person who is then the registered Holder: To the address of such Holder as it appears in the stock transfer books of the Company or such other address as may be designated in writing hereafter in accordance with this Section 7(g) by such Person. 146.8 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written consent of each Holder. Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under the Notes and the Security Agreement with the prior written consent of the Company, which consent shall not be unreasonably withheld. 146.9 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. 146.10 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. Except as set forth below in this Section 7(j), any and all disputes, controversies and claims that the Company or any of its Subsidiaries may assert against the Purchaser arising out of or relating to this Agreement, the Securities Purchase Agreement or any other Related Agreement shall be determined exclusively by arbitration (each such arbitration, an "Arbitration") in New York City before a panel of three neutral arbitrators agreed to by the Purchaser and the Company (collectively, the "Arbitrators") in accordance with and pursuant to the then existing commercial arbitration rules of the American Arbitration Association. The Company (on its behalf and on behalf of its Subsidiaries) hereby irrevocably waives any right to assert such claims in any other forum. The Arbitrators shall have the power in their discretion to award specific performance or injunctive relief (but shall not have the power to render any incidental, special or punitive damages) and reasonable attorneys' fees and expenses to any party in any arbitration. The Arbitrators may not change, modify or alter any express condition, term or provision of this Agreement, the Securities Purchase Agreement or of any other Related Agreement nor shall they have the power to render any award against the Purchaser that would have such effect. Each Arbitration award shall be final and binding upon the parties subject thereto and judgment may be entered thereon in any court of competent jurisdiction. The service of any notice, process, motion or other document in connection with an Arbitration or for the enforcement of any Arbitration award may be made in the same manner as communications may be given under Section 7(g) hereof. Notwithstanding the foregoing, the provisions of this Section 7(j) nor any other provision contained in this Agreement, the Securities Purchase Agreement or in any Related Agreement shall limit in any manner whatsoever the Purchaser's right to commence an action against or in connection with the Company, any of its Subsidiaries or their respective properties in any court of competent jurisdiction or otherwise utilize judicial process in connection with or arising out of the Purchaser's rights and remedies under this Agreement, the Securities Purchase Agreement and/or any Related Agreement or otherwise (any such action, a "Court Action"). Court Actions may be brought by the Purchaser in any state or federal court of competent jurisdiction and the Company (on its behalf and on behalf of its Subsidiaries) irrevocably submits to the jurisdiction of such state and federal courts and irrevocably waives any claim or defense of inconvenient forum or lack of personal jurisdiction in such forum or right of removal or right to jury trial under any applicable law or decision or otherwise. Service of any notice, process, motion or other document in connection with a Court Action may be made in the same manner as communications may be given under Section 7(g). In addition, the Purchaser may serve process in any other manner permitted under applicable law. If either party shall commence a Proceeding to enforce any provisions of this Agreement, the Securities Purchase Agreement or any other Related Agreement, then the prevailing party in such Proceeding shall be reimbursed by the other party for its reasonable attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding. 146.11 Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 146.12 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. 146.13 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above. EPIXTAR CORP. SANDS BROTHERS VENTURE CAPITAL LLC SANDS BROTHERS VENTURE CAPITAL II LLC SANDS BROTHERS VENTURE CAPITAL III LLC SANDS BROTHERS VENTURE CAPITAL IV LLC By: /s/ Ilene Kaminsky By: /s/ Steven Sands ------------------------ --------------------------- Name: Ilene Kaminsky Name: Steven Sands ------------------------ --------------------------- Title: CEO Title: Manager ------------------------ --------------------------- Address for Notices: Sands Brothers Venture Capital c/o Laidlaw & Company (UK) Ltd. 90 Park Avenue, 39th Floor New York, NY 10016 Attention: Mark Koplik Facsimile: 212-697-8035 EXHIBIT A [Month __, 200_] [Continental Stock Transfer & Trust Company Two Broadway New York, NY 10004 Attn: William Seegraber] Re: Epixtar Corp. Registration Statement on Form [S-1][SB-2] Ladies and Gentlemen: As counsel to Epixtar Corp., 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] SCHEDULE A Shares Selling Stockholder Being Offered - ------------------- ------------- EX-4.13.25 26 b406530ex4_13-25.txt EXHIBIT 4.13.25 EXHIBIT 4.13.25 VOXX REGISTRATION RIGHTS AGREEMENT This VOXX Registration Rights Agreement (this "Agreement") is made and entered into as of April 29, 2005, by and between Voxx Corporation, a Florida corporation (the "Company"), and Sands Brothers Venture Capital LLC, Sands Brothers Venture Capital II LLC, Sands Brothers Venture Capital III LLC, Sands Brothers Venture Capital IV LLC and the Warrant Holders all as set forth in Exhibit A hereto (collectively, the "Purchaser"). This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof, by and between the Purchaser, Epixtar Corp., a Florida corporation, and the Company (as amended, modified or supplemented from time to time, the "Securities Purchase Agreement"), and pursuant to the Note. The Company and the Purchaser hereby agree as follows: 147. Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Securities Purchase Agreement shall have the meanings given such terms in the Securities Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings: "Commission" means the Securities and Exchange Commission. "Common Stock" means shares of the Company's common stock, par value $0.001 per share. "Effectiveness Date" means (i) with respect to the initial Registration Statement required to be filed hereunder, a date no later than ninety (90) days following the Filing Date of the initial Registration Statement required to be filed hereunder 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 in respect of the shares of Common Stock issuable upon conversion of the Note and the exercise of the Warrants and the Option, a date no later than (x) in the event that the Company consummates an initial public offering of its Common Stock (an "IPO") on or prior to the one (1) year anniversary of the date hereof, (I) the sixth month anniversary of the consummation of the IPO; provided that in the event that the underwriter representing the Company in connection with such IPO requires the Common Stock to be subject to lock-up requirements for a period of time, the Filing Date shall be extended until the earlier of (A) the termination of such "lock-up" requirements and (B) the one year anniversary of the consummation of the IPO and (y) in the event that the Company does not consummate an IPO on or prior to the one (1) year anniversary of the date hereof, upon the demand of the Purchaser; and (ii) the shares of Common Stock issuable to the Holder as a result of adjustments to the Fixed Conversion Price (or, if applicable, the Alternate Conversion Price) or Exercise Price made pursuant to the Note, the Warrant, the Option or otherwise to the extent occurring after filing of the initial Registration Statement, thirty (30) days after the occurrence of such event or the date of the adjustment of the Fixed Conversion Price (or, if applicable, the Alternate Conversion Price) or Exercise Price, as the case may be. "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. "Indemnifying Party" shall have the meaning set forth in Section(c). "Note" has the meaning set forth in the Securities Purchase Agreement. "Option" shall have the meaning set forth in the Securities Purchase Agreement. "Proceeding" means an arbitration, action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened. "Prospectus" means the prospectus included in the Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. "Registrable Securities" means the shares of Common Stock issued upon the conversion of the Note and issuable upon exercise of the Warrants and the Opton. "Registration Statement" means each registration statement required to be filed hereunder, including the Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. "Rule 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 415" means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Rule 424" means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule. "Securities Act" means the Securities Act of 1933, as amended, and any successor statute. "Securities Purchase Agreement" has the meaning given to such term in the Preamble hereto. "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. "Trading Market Date" means the date that the Common Stock is listed or quoted, as the case may be, on a Trading Market. "Warrants" shall have the meaning set forth in the Securities Purchase Agreement and shall also include any other warrant issued after the date hereof in connection with the Securities Purchase Agreement, the Related Agreements and any amendment or modification thereto. 148. Registration. 148.1 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 S-1 or SB-2 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-1 or 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"). 148.2 If: (i) the Registration Statement is not filed on or prior to the Filing Date; (ii) the Registration Statement is not declared effective by the Commission by the Effectiveness Date; (iii) after the Registration Statement is filed with and declared effective by the Commission, the Registration Statement ceases to be effective (by suspension or otherwise) as to all Registrable Securities to which it is required to relate at any time prior to the expiration of the Effectiveness Period (without being succeeded immediately by an additional registration statement filed and declared effective) for a period of time which shall exceed 30 days in the aggregate per year or more than 20 consecutive calendar days (defined as a period of 365 days commencing on the date the Registration Statement is declared effective); or (iv) at any time after the Trading Market Date, 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 2.0% for each thirty (30) day period (prorated for partial periods) on a daily basis of the original principal amount of the Note. While such Event continues, such liquidated damages shall be paid not less often than each thirty (30) days. Any unpaid liquidated damages as of the date when an Event has been cured by the Company shall be paid within three (3) days following the date on which such Event has been cured by the Company. 148.3 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. 149. 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: 149.1 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; 149.2 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; 149.3 furnish to the Purchaser such number of copies of the Registration Statement and the Prospectus included therein (including each preliminary Prospectus) as the Purchaser reasonably may request to facilitate the public sale or disposition of the Registrable Securities covered by the Registration Statement; 149.4 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; 149.5 list the Registrable Securities covered by the Registration Statement with any securities exchange on which the Common Stock of the Company is then listed; 149.6 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 149.7 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. 150. 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. 151. Indemnification. 151.1 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. 151.2 In the event of a registration of the Registrable Securities under the Securities Act pursuant to this Agreement, the Purchaser will indemnify and hold harmless the Company, and its officers, directors and each other person, if any, who controls the Company within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact which was furnished in writing by the Purchaser to the Company expressly for use in (and such information is contained in) the Registration Statement under which such Registrable Securities were registered under the Securities Act pursuant to this Agreement, any preliminary Prospectus or final Prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such person for any reasonable legal or other expenses incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action, provided, however, that the Purchaser will be liable in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished in writing to the Company by or on behalf of the Purchaser specifically for use in any such document. Notwithstanding the provisions of this paragraph, the Purchaser shall not be required to indemnify any person or entity in excess of the amount of the aggregate net proceeds received by the Purchaser in respect of Registrable Securities in connection with any such registration under the Securities Act. 151.3 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. 151.4 In order to provide for just and equitable contribution in the event of joint liability under the Securities Act in any case in which either (i) the Purchaser, or any officer, director or controlling person of the Purchaser, makes a claim for indemnification pursuant to this Section 5 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 5 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of the Purchaser or such officer, director or controlling person of the Purchaser in circumstances for which indemnification is provided under this Section 5; then, and in each such case, the Company and the Purchaser will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that the Purchaser is responsible only for the portion represented by the percentage that the public offering price of its securities offered by the Registration Statement bears to the public offering price of all securities offered by such Registration Statement, provided, however, that, in any such case, (A) the Purchaser will not be required to contribute any amount in excess of the public offering price of all such securities offered by it pursuant to such Registration Statement; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Securities Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation. 152. Representations, Warranties and Covenants. 152.1 On and after the Trading Market Date, the Common Stock of the Company shall be registered pursuant to Section 12(b) or 12(g) of the Exchange Act 152.2 On and after the Trading Market Date, the Common Stock shall be traded on a Trading Market and the Common Stock shall satisfy all requirements for the continuation of such trading. 152.3 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 (other than the concurrent offering made pursuant to the Laurus Securities Purchase Agreement and the Related Agreements referred to therein) 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. 152.4 The Option, the Warrant, the Note and the shares of Common Stock which the Purchaser may acquire pursuant to the Option, 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 or as otherwise permitted by this Agreement, the Purchase Agreement or any Related Agreement. 152.5 The Company understands the nature of the Registrable Securities issuable upon the conversion of the Note and the exercise of the Warrant and the Option 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. 152.6 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. 152.7 On and after the Trading Market Date, 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 and the Option. 153. Miscellaneous. 153.1 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. 153.2 No Piggyback on Registrations. Except as and to the extent specified in Schedule 7(b) hereto or with respect to any shares issued to any underwriter, 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. 153.3 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. 153.4 Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of a Discontinuation Event (as defined below), such Holder will forthwith discontinue disposition of such Registrable Securities under the applicable Registration Statement until such Holder's receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph. For purposes of this Section 7(d), a "Discontinuation Event" shall mean (i) when the Commission notifies the Company whether there will be a "review" of such Registration Statement and whenever the Commission comments in writing on such Registration Statement (the Company shall provide true and complete copies thereof and all written responses thereto to each of the Holders); (ii) any request by the Commission or any other Federal or state governmental authority for amendments or supplements to such Registration Statement or Prospectus or for additional information; (iii) the issuance by the Commission of any stop order suspending the effectiveness of such Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and/or (v) the occurrence of any event or passage of time that makes the financial statements included in such Registration Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. 153.5 Piggy-Back Registrations. If at any time during the Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to each Holder written notice of such determination and, if within fifteen days after receipt of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such holder requests to be registered to the extent the Company may do so without violating registration rights of others which exist as of the date of this Agreement, subject to customary underwriter cutbacks applicable to all holders of registration rights and subject to obtaining any required the consent of any selling stockholder(s) to such inclusion under such registration statement. 153.6 Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of the then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of certain Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence. 153.7 Notices. Any notice or request hereunder may be given to the Company or the Purchaser at the respective addresses set forth below or as may hereafter be specified in a notice designated as a change of address under this Section 7(g). Any notice or request hereunder shall be given by registered or certified mail, return receipt requested, hand delivery, overnight mail, Federal Express or other national overnight next day carrier (collectively, "Courier") or telecopy (confirmed by mail). Notices and requests shall be, in the case of those by hand delivery, deemed to have been given when delivered to any party to whom it is addressed, in the case of those by mail or overnight mail, deemed to have been given three (3) business days after the date when deposited in the mail or with the overnight mail carrier, in the case of a Courier, the next business day following timely delivery of the package with the Courier, and, in the case of a telecopy, when confirmed. The address for such notices and communications shall be as follows: If to the Company: Voxx Corporation 11900 Biscayne Boulevard, Suite 700 Miami, Florida 33181 Attention: Corporate Secretary Facsimile: 305-503-8610 with a copy to: Michael DiGiovanna, Esq. 212 Carnegie Center Suite 206 Princeton, New Jersey 08540 Facsimile: 609-452-9473 If to a Purchaser: To the address set forth under such Purchaser name on the signature pages hereto. If to any other Person who is then the registered Holder: To the address of such Holder as it appears in the stock transfer books of the Company or such other address as may be designated in writing hereafter in accordance with this Section 7(g) by such Person. 153.8 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written consent of each Holder. Each Holder may assign their respective rights hereunder in the manner and to the Persons as permitted under the Notes and the Security Agreement with the prior written consent of the Company, which consent shall not be unreasonably withheld. 153.9 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. 153.10 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. Except as set forth below in this Section 7(j), any and all disputes, controversies and claims that the Company or any of its Subsidiaries may assert against the Purchaser arising out of or relating to this Agreement, the Securities Purchase Agreement or any other Related Agreement shall be determined exclusively by arbitration (each such arbitration, an "Arbitration") in New York City before a panel of three neutral arbitrators agreed to by the Purchaser and the Company (collectively, the "Arbitrators") in accordance with and pursuant to the then existing commercial arbitration rules of the American Arbitration Association. The Company (on its behalf and on behalf of its Subsidiaries) hereby irrevocably waives any right to assert such claims in any other forum. The Arbitrators shall have the power in their discretion to award specific performance or injunctive relief (but shall not have the power to render any incidental, special or punitive damages) and reasonable attorneys' fees and expenses to any party in any arbitration. The Arbitrators may not change, modify or alter any express condition, term or provision of this Agreement, the Securities Purchase Agreement or of any other Related Agreement nor shall they have the power to render any award against the Purchaser that would have such effect. Each Arbitration award shall be final and binding upon the parties subject thereto and judgment may be entered thereon in any court of competent jurisdiction. The service of any notice, process, motion or other document in connection with an Arbitration or for the enforcement of any Arbitration award may be made in the same manner as communications may be given under Section 7(g) hereof. Notwithstanding the foregoing, the provisions of this Section 7(j) nor any other provision contained in this Agreement, the Securities Purchase Agreement or in any Related Agreement shall limit in any manner whatsoever the Purchaser's right to commence an action against or in connection with the Company, any of its Subsidiaries or their respective properties in any court of competent jurisdiction or otherwise utilize judicial process in connection with or arising out of the Purchaser's rights and remedies under this Agreement, the Securities Purchase Agreement and/or any Related Agreement or otherwise (any such action, a "Court Action"). Court Actions may be brought by the Purchaser in any state or federal court of competent jurisdiction and the Company (on its behalf and on behalf of its Subsidiaries) irrevocably submits to the jurisdiction of such state and federal courts and irrevocably waives any claim or defense of inconvenient forum or lack of personal jurisdiction in such forum or right of removal or right to jury trial under any applicable law or decision or otherwise. Service of any notice, process, motion or other document in connection with a Court Action may be made in the same manner as communications may be given under Section 7(g). In addition, the Purchaser may serve process in any other manner permitted under applicable law. If either party shall commence a Proceeding to enforce any provisions of this Agreement, the Securities Purchase Agreement or any other Related Agreement, then the prevailing party in such Proceeding shall be reimbursed by the other party for its reasonable attorneys fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding. 153.11 Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. 153.12 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. 153.13 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. [BALANCE OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS] IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above. VOXX CORPORATION SANDS BROTHERS VENTURE CAPITAL LLC Sands Brothers Venture Capital II LLC Sands Brothers Venture Capital III LLC Sands Brothers Venture Capital IV LLC By: /s/ Ilene Kaminsky By: /s/ Steven B. Sands --------------------- ---------------------------------- Name: Ilene Kaminsky Name: Steven B. Sands --------------------- ---------------------------------- Title: CEO Title: Manager --------------------- ---------------------------------- Address for Notices: Sands Brothers Venture Capital c/o Laidlaw & Company (UK) Ltd. 90 Park Avenue, 39th Floor New York, NY (10016) Attention: Marc Koplik Facsimile: 212-697-8035 EXHIBIT A [Month __, 200_] [Continental Stock Transfer & Trust Company Two Broadway New York, NY 10004 Attn: William Seegraber] Re: Voxx Corporation Registration Statement on Form [S-1][SB-2] Ladies and Gentlemen: As counsel to Voxx Corporation, 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] SCHEDULE A Selling Stockholder Shares Being Offered ------------- EX-4.13.26 27 b406530ex4_13-26.txt EXHIBIT 4.13.26 EXHIBIT 14.13.26 STOCK PLEDGE AGREEMENT This Stock Pledge Agreement (this "Agreement"), dated as of April 29, 2005, among Sands Brothers Venture Capital LLC, Sands Brothers Venture Capital II LLC, Sands Brothers Venture Capital III LLC and Sands Brothers Venture Capital IV LLC (these Sands entities collectively, the "Pledgees"), Epixtar Corp., a Florida corporation (the "Company"), and each of the other undersigned pledgors (the Company and each such other undersigned pledgor, a "Pledgor" and collectively, the "Pledgors"). BACKGROUND Each of the Company, Voxx Corporation, a Florida corporation ("Voxx"), and the Pledgees has entered into a Securities Purchase Agreement, dated as of the date hereof (as amended, modified, restated or supplemented from time to time, the "Securities Purchase Agreement"), pursuant to which the Pledgees provide or will provide certain financial accommodations to the Company. In order to induce the Pledgees to provide or continue to provide the financial accommodations described in the Securities Purchase Agreement, each Pledgor has agreed to pledge and grant a security interest in the collateral described herein to the Pledgees on the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt of which is hereby acknowledged, the parties hereto agree as follows: 19. Defined Terms. All capitalized terms used herein which are not defined shall have the meanings given to them in the Securities Purchase Agreement. 20. Pledge and Grant of Security Interest. To secure the full and punctual payment and performance of (the following clauses (a) and (b), collectively, the "Indebtedness") (a) the obligations under the Securities Purchase Agreement and the Related Agreements referred to in the Securities Purchase Agreement (the Securities Purchase Agreement and the Related Agreements, as each may be amended, restated, modified and/or supplemented from time to time, collectively, the "Documents") and (b) all other indebtedness, obligations and liabilities of each Pledgor and/or any other subsidiary of the Company to the Pledgees, whether now existing or hereafter arising, direct or indirect, liquidated or unliquidated, absolute or contingent, due or not due and whether under, pursuant to or evidenced by a note, agreement, guaranty, instrument or otherwise (in each case, irrespective of the genuineness, validity, regularity or enforceability of such Indebtedness, or of any instrument evidencing any of the Indebtedness or of any collateral therefor or of the existence or extent of such collateral, and irrespective of the allowability, allowance or disallowance of any or all of such in any case commenced by or against any Pledgor under Title 11, United States Code, including, without limitation, obligations or indebtedness of each Pledgor and/or any other subsidiary of the Company for post-petition interest, fees, costs and charges that would have accrued or been added to the Indebtedness but for the commencement of such case, and irrespective of the allowability, allowance or disallowance of such post-petition interest, fees, costs and charges), each Pledgor hereby pledges, assigns, hypothecates, transfers and grants a security interest to Pledgees in all of the following (the "Collateral"): (a) the shares of stock set forth on Schedule A annexed hereto (which shall explicitly exclude the shares of Epixtar Marketing Corp., a Florida corporation, until such time as such shares are released from the escrow arrangement by and between the Company and the previous owners thereof) and expressly made a part hereof (together with any additional shares of stock or other equity interests acquired by any Pledgor after the date hereof, the "Pledged Stock"), the certificates representing the Pledged Stock and all dividends, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Stock; (b) all additional shares of stock of any issuer (each, an "Issuer") of the Pledged Stock from time to time acquired by any Pledgor in any manner, including, without limitation, stock dividends or a distribution in connection with any increase or reduction of capital, reclassification, merger, consolidation, sale of assets, combination of shares, stock split, spin-off or split-off (which shares shall be deemed to be part of the Collateral), and the certificates representing such additional shares, and all dividends, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares; and (c) all options and rights, whether as an addition to, in substitution of or in exchange for any shares of any Pledged Stock and all dividends, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all such options and rights. Notwithstanding the foregoing or anything to the contrary contained herein, it is understood and agreed by the parties hereto that the term "Indebetedness" shall not include any principal amount of indebtedness in excess of an aggregate amount of $1,500,000 and the rate of interest and fees related to the Indebtedness, which such interest and fees shall not exceed the rate of interest and fees provided for in the Documents (as in effect on the date hereof). 21. Delivery of Collateral. All certificates representing or evidencing the Pledged Stock shall be delivered to and held by or on behalf of Pledgees pursuant hereto and shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to Laurus Master Fund, Ltd. a Cayman Islands company acting as collateral agent for itself and for the benefit of the Pledgees ("Laurus"). Each Pledgor hereby authorizes the Issuer upon demand by the Pledgees to deliver any certificates, instruments or other distributions issued in connection with the Collateral directly to Laurus, in each case to be held by Laurus, subject to the terms hereof. Upon an Event of Default (as defined below) under the Note that has occurred and is continuing beyond any applicable grace period, Laurus shall have the right, during such time in its discretion and without notice to the Pledgor, to transfer to or to register in the name of the Laurus or any of its nominees any or all of the Pledged Stock. In addition, the Laurus shall have the right at such time to exchange certificates or instruments representing or evidencing Pledged Stock for certificates or instruments of smaller or larger denominations. 22. Representations and Warranties of each Pledgor. Each Pledgor jointly and severally represents and warrants to the Pledgees (which representations and warranties shall be deemed to continue to be made until all of the Indebtedness has been paid in full and each Document and each agreement and instrument entered into in connection therewith has been irrevocably terminated) that: (a) the execution, delivery and performance by each Pledgor of this Agreement and the pledge of the Collateral hereunder do not and will not result in any violation of any agreement, indenture, instrument, license, judgment, decree, order, law, statute, ordinance or other governmental rule or regulation applicable to any Pledgor; (b) this Agreement constitutes the legal, valid, and binding obligation of each Pledgor enforceable against each Pledgor in accordance with its terms; (c) (i) all Pledged Stock owned by each Pledgor is set forth on Schedule A hereto and (ii) each Pledgor is the direct and beneficial owner of each share of the Pledged Stock; (d) all of the shares of the Pledged Stock have been duly authorized, validly issued and are fully paid and nonassessable; (e) no consent or approval of any person, corporation, governmental body, regulatory authority or other entity, is or will be necessary for (i) the execution, delivery and performance of this Agreement, (ii) the exercise by the Pledgees of any rights with respect to the Collateral or (iii) the pledge and assignment of, and the grant of a security interest in, the Collateral hereunder; (f) there are no pending or, to the best of Pledgor's knowledge, threatened actions or proceedings before any court, judicial body, administrative agency or arbitrator which may materially adversely affect the Collateral; (g) each Pledgor has the requisite power and authority to enter into this Agreement and to pledge and assign the Collateral to the Pledgees in accordance with the terms of this Agreement. (h) each Pledgor owns each item of the Collateral and, except for encumbrances securing (x) the Indebtedness and (ii) the Laurus Obligations (as defined in the Intercreditor Agreement), the Collateral shall be, immediately following the closing of the transactions contemplated by the Documents, free and clear of any other security interest, pledge, claim, lien, charge, hypothecation, assignment, offset or encumbrance whatsoever (collectively, "Liens"). (i) there are no restrictions on transfer of the Pledged Stock contained in the certificate of incorporation or by-laws (or equivalent organizational documents) of the Issuer or otherwise which have not otherwise been enforceably and legally waived by the necessary parties. (j) none of the Pledged Stock has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject. (k) the pledge and assignment of the Collateral and the grant of a security interest under this Agreement vest in the Pledgees all rights of each Pledgor in the Collateral as contemplated by this Agreement. (l) The Pledged Stock constitutes one hundred percent (100%) of the issued and outstanding shares of capital stock of each Issuer, other than Voxx Corporation, of which Epixtar Corp. owns the outstanding shares set forth on Schedule A hereto. 23. Covenants. Each Pledgor jointly and severally covenants that, until the Indebtedness shall be satisfied in full and each Document and each agreement and instrument entered into in connection therewith is irrevocably terminated: (a) Other than the issuances to the Laurus Creditors (as defined in the Intercreditor Agreement) that are contemplated by the Laurus Documents (as defined in the Intercreditor Agreement) and/or issuances to the Sands Creditors (as defined in the Intercreditor Agreement) that are contemplated by the Sands Documents (as defined in the Intercreditor Agreement), no Pledgor will sell, assign, transfer, convey, or otherwise dispose of, or agree to sell, assign, transfer, convey or otherwise dispose of, its rights in or to the Collateral or any interest therein; nor will any Pledgor create, incur or permit to exist any Lien whatsoever with respect to any of the Collateral or the proceeds thereof other than that created hereby. (b) Each Pledgor will, at its expense, defend Pledgees's right, title and security interest in and to the Collateral against the claims of any other party. (c) Each Pledgor shall at any time, and from time to time, upon the written request of Pledgees, execute and deliver such further documents and do such further acts and things as Pledgees may reasonably request in order to effect the purposes of this Agreement including, but without limitation, delivering to Pledgees upon the occurrence of an Event of Default irrevocable proxies in respect of the Collateral in form satisfactory to Pledgees. Until receipt thereof, upon an Event of Default that has occurred and is continuing beyond any applicable grace period, this Agreement shall constitute Pledgor's proxy to Pledgees or its nominee to vote all shares of Collateral then registered in each Pledgor's name. (d) Other than the issuances to the Laurus Creditors (as defined in the Intercreditor Agreement) that are contemplated by the Laurus Documents (as defined in the Intercreditor Agreement) and/or issuances to the Sands Creditors (as defined in the Intercreditor Agreement) that are contemplated by the Sands Documents (as defined in the Intercreditor Agreement) or (iii) issuances to the creditors in respect of the Bridge Loan Indebtedness in accordance with the terms set forth in Section 6.12(e)(i)(v) of the Securities Purchase Agreement, no Pledgor will consent to or approve the issuance of (i) any additional shares of any class of capital stock or other equity interests of the Issuer; or (ii) any securities convertible either voluntarily by the holder thereof or automatically upon the occurrence or nonoccurrence of any event or condition into, or any securities exchangeable for, any such shares, unless, in either case, such shares are pledged as Collateral pursuant to this Agreement; provided, however, in the case of an initial public offering by Voxx, the issuance by Voxx of shares of its Common Stock will be permitted without the requirement that such shares be pledged as additional collateral under this Agreement. 24. Voting Rights and Dividends. In addition to the Pledgees's rights and remedies set forth in Section 8 hereof, in case an Event of Default shall have occurred and be continuing, beyond any applicable cure period, the Pledgees shall (i) be entitled to vote the Collateral, (ii) be entitled to give consents, waivers and ratifications in respect of the Collateral (each Pledgor hereby irrevocably constituting and appointing the Pledgees, with full power of substitution, the proxy and attorney-in-fact of each Pledgor for such purposes) and (iii) be entitled to collect and receive for its own use cash dividends paid on the Collateral. No Pledgor shall be permitted to exercise or refrain from exercising any voting rights or other powers if, in the reasonable judgment of the Pledgees, such action would have a material adverse effect on the value of the Collateral or any part thereof; and, provided, further, that following the occurrence and during the continuance of any Event of Default beyond any applicable grace period, each Pledgor shall give at least five (5) days' written notice of the manner in which such Pledgor intends to exercise, or the reasons for refraining from exercising, any voting rights or other powers other than with respect to any election of directors and voting with respect to any incidental matters. Following the occurrence and during the continuance of an Event of Default beyond any applicable grace period, all dividends and all other distributions in respect of any of the Collateral, shall be delivered to the Pledgees to hold as Collateral and shall, if received by any Pledgor, be received in trust for the benefit of the Pledgees, be segregated from the other property or funds of any other Pledgor, and be forthwith delivered to the Pledgees as Collateral in the same form as so received (with any necessary endorsement). 25. Event of Default. An Event of Default shall be deemed to have occurred and may be declared by the Pledgees upon the happening of any of the following events: (a) An "Event of Default" under any Document or any agreement or note related to any Document shall have occurred and be continuing beyond any applicable cure period; (b) Any Pledgor shall default in the performance of any of its obligations under any agreement between any Pledgor and Pledgees, including, without limitation, this Agreement, and such default shall not be cured for a period of thirty (30) days after the occurrence thereof; (c) Any representation or warranty of any Pledgor made herein, in any Document or in any agreement, statement or certificate given in writing pursuant hereto or thereto or in connection herewith or therewith shall be false or misleading in any material respect and shall not be cured for a period of thirty (30) days after the occurrence thereof; (d) Any portion of the Collateral is subjected to levy of execution, attachment, distraint or other judicial process; or any portion of the Collateral is the subject of a claim (other than by the Pledgees) of a Lien or other right or interest in or to the Collateral and such levy or claim shall not be cured, disputed or stayed within a period of thirty (30) business days after the occurrence thereof; or (e) Any Pledgor shall (i) apply for, consent to, or suffer to exist the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or other fiduciary of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of creditors, (iii) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vi) acquiesce to, or fail to have dismissed, within forty-five (45) days, any petition filed against it in any involuntary case under such bankruptcy laws, or (vii) take any action for the purpose of effecting any of the foregoing. 26. Remedies. In case an Event of Default shall have occurred and be declared by the Pledgees, the Pledgees may: (a) Transfer any or all of the Collateral into their names, or into the name of their nominee or nominees; (b) Exercise all corporate rights with respect to the Collateral including, without limitation, all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to any shares of the Collateral as if it were the absolute owner thereof, including, but without limitation, the right to exchange, at its discretion, any or all of the Collateral upon the merger, consolidation, reorganization, recapitalization or other readjustment of the Issuer thereof, or upon the exercise by the Issuer of any right, privilege or option pertaining to any of the Collateral, and, in connection therewith, to deposit and deliver any and all of the Collateral with any committee, depository, transfer agent, registrar or other designated agent upon such terms and conditions as it may determine, all without liability except to account for property actually received by it; and (c) Subject to any requirement of applicable law, sell, assign and deliver the whole or, from time to time, any part of the Collateral at the time held by the Pledgees, at any private sale or at public auction, with or without demand, advertisement or notice of the time or place of sale or adjournment thereof or otherwise (all of which are hereby waived, except such notice as is required by applicable law and cannot be waived), for cash or credit or for other property for immediate or future delivery, and for such price or prices and on such terms as the Pledgees in its sole discretion may determine, or as may be required by applicable law. Each Pledgor hereby waives and releases any and all right or equity of redemption, whether before or after sale hereunder. At any such sale, unless prohibited by applicable law, the Pledgees may bid for and purchase the whole or any part of the Collateral so sold free from any such right or equity of redemption. All moneys received by the Pledgees hereunder whether upon sale of the Collateral or any part thereof or otherwise shall be held by the Pledgees and applied by them as provided in Section 10 hereof. No failure or delay on the part of the Pledgees in exercising any rights hereunder shall operate as a waiver of any such rights nor shall any single or partial exercise of any such rights preclude any other or future exercise thereof or the exercise of any other rights hereunder. The Pledgees shall have no duty as to the collection or protection of the Collateral or any income thereon nor any duty as to preservation of any rights pertaining thereto, except to apply the funds in accordance with the requirements of Section 10 hereof. The Pledgees may exercise their rights with respect to property held hereunder without resort to other security for or sources of reimbursement for the Indebtedness. In addition to the foregoing, Pledgees shall have all of the rights, remedies and privileges of a secured party under the Uniform Commercial Code of New York regardless of the jurisdiction in which enforcement hereof is sought. 27. Private Sale. Each Pledgor recognizes that the Pledgees may be unable to effect (or to do so only after delay which would adversely affect the value that might be realized from the Collateral) a public sale of all or part of the Collateral by reason of certain prohibitions contained in the Securities Act, and may be compelled to resort to one or more private sales to a restricted group of purchasers who will be obliged to agree, among other things, to acquire such Collateral for their own account, for investment and not with a view to the distribution or resale thereof. Each Pledgor agrees that any such private sale may be at prices and on terms less favorable to the seller than if sold at public sales and that such private sales shall be deemed to have been made in a commercially reasonable manner. Each Pledgor agrees that the Pledgees have no obligation to delay sale of any Collateral for the period of time necessary to permit the Issuer to register the Collateral for public sale under the Securities Act. Any sale made pursuant to this Section 9 shall be in accordance with federal and state securities laws. 28. Proceeds of Sale. The proceeds of any collection, recovery, receipt, appropriation, realization or sale of the Collateral shall be applied in accordance with the provisions of Section 8 the InterCreditor Agreement In the event that the proceeds of any collection, recovery, receipt, appropriation, realization or sale are insufficient to satisfy the Indebtedness, each Pledgor shall be jointly and severally liable for the deficiency plus the costs and fees of any attorneys employed by Pledgees to collect such deficiency. 29. Waiver of Marshaling. Each Pledgor hereby waives any right to compel any marshaling of any of the Collateral. 30. No Waiver. Any and all of the Pledgees's rights with respect to the Liens granted under this Agreement shall continue unimpaired, and Pledgor shall be and remain obligated in accordance with the terms hereof, notwithstanding (a) the bankruptcy, insolvency or reorganization of any Pledgor, (b) the release or substitution of any item of the Collateral at any time, or of any rights or interests therein, or (c) any delay, extension of time, renewal, compromise or other indulgence granted by the Pledgees in reference to any of the Indebtedness. Each Pledgor hereby waives all notice of any such delay, extension, release, substitution, renewal, compromise or other indulgence, and hereby consents to be bound hereby as fully and effectively as if such Pledgor had expressly agreed thereto in advance. No delay or extension of time by the Pledgees in exercising any power of sale, option or other right or remedy hereunder, and no failure by the Pledgees to give notice or make demand, shall constitute a waiver thereof, or limit, impair or prejudice the Pledgees' right to take any action against any Pledgor or to exercise any other power of sale, option or any other right or remedy. 31. Expenses. The Collateral shall secure, and each Pledgor shall pay to Pledgees on demand, from time to time, all reasonable costs and expenses, (including but not limited to, reasonable attorneys' fees and costs, taxes, and all transfer, recording, filing and other charges) of, or incidental to, the custody, care, transfer, administration of the Collateral or any other collateral, or in any way relating to the enforcement, protection or preservation of the rights or remedies of the Pledgees under this Agreement or with respect to any of the Indebtedness. 32. The Pledgees Appointed Attorney-In-Fact and Performance by the Pledgees. Upon the occurrence of an Event of Default, each Pledgor hereby irrevocably constitutes and appoints the designated representative of the Pledgees as such Pledgor's true and lawful attorney-in-fact, with full power of substitution, to execute, acknowledge and deliver any instruments and to do in such Pledgor's name, place and stead, all such acts, things and deeds for and on behalf of and in the name of such Pledgor, which such Pledgor could or might do or which the Pledgees may deem necessary, desirable or convenient to accomplish the purposes of this Agreement, including, without limitation, to execute such instruments of assignment or transfer or orders and to register, convey or otherwise transfer title to the Collateral into the Pledgees's name. Each Pledgor hereby ratifies and confirms all that said attorney-in-fact may so do and hereby declares this power of attorney to be coupled with an interest and irrevocable. If any Pledgor fails to perform any agreement herein contained, the Pledgees may itself perform or cause performance thereof, and any costs and expenses of the Pledgees incurred in connection therewith shall be paid by the Pledgors as provided in Section 10 hereof. 33. Waivers. EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OTHER AGREEMENT EXECUTED OR DELIVERED BY THEM IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. 34. Recapture. Notwithstanding anything to the contrary in this Agreement, if the Pledgees receive any payment or payments on account of the Indebtedness, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver, or any other party under the United States Bankruptcy Code, as amended, or any other federal or state bankruptcy, reorganization, moratorium or insolvency law relating to or affecting the enforcement of creditors' rights generally, common law or equitable doctrine, then to the extent of any sum not finally retained by the Pledgees, each Pledgor's obligations to the Pledgees shall be reinstated and this Agreement shall remain in full force and effect (or be reinstated) until payment shall have been made to Pledgees, which payment shall be due on demand. 35. Captions. All captions in this Agreement are included herein for convenience of reference only and shall not constitute part of this Agreement for any other purpose. 36. Miscellaneous. (a) Notwithstanding anything to the contrary contained in this Agreement, the terms and conditions of this Agreement shall be subject in all respects to the terms and conditions of the Intercreditor Agreement. In the event that the terms and conditions of this Agreement are in contravention of the terms and conditions of the Intercreditor Agreement, the terms and conditions of the Intercreditor Agreement shall prevail. This Agreement constitutes the entire and final agreement among the parties with respect to the subject matter hereof and may not be amended, modified, supplemented, restated, terminated or waived except by a writing duly executed by each Pledgee, each Pledgor and Laurus. (b) No waiver of any term or condition of this Agreement, whether by delay, omission or otherwise, shall be effective unless in writing and signed by the party sought to be charged, and then such waiver shall be effective only in the specific instance and for the purpose for which given. (c) In the event that any provision of this Agreement or the application thereof to any Pledgor or any circumstance in any jurisdiction governing this Agreement shall, to any extent, be invalid or unenforceable under any applicable statute, regulation, or rule of law, such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute, regulation or rule of law, and the remainder of this Agreement and the application of any such invalid or unenforceable provision to parties, jurisdictions, or circumstances other than to whom or to which it is held invalid or unenforceable shall not be affected thereby, nor shall same affect the validity or enforceability of any other provision of this Agreement. (d) This Agreement shall be binding upon each Pledgor, and each Pledgor's successors and assigns, and shall inure to the benefit of the Pledgees and their successors and assigns. (e) Any notice or other communication required or permitted pursuant to this Agreement shall be given in accordance with the Securities Purchase Agreement. (f) This Agreement shall be governed by and construed and enforced in all respects in accordance with the laws of the State of New York applied to contracts to be performed wholly within the State of New York. (g) EXCEPT AS SET FORTH BELOW IN THIS SECTION 18(g), ANY AND ALL DISPUTES, CONTROVERSIES AND CLAIMS THAT ANY PLEDGOR MAY ASSERT AGAINST THE PLEDGEES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER DOCUMENT SHALL BE DETERMINED EXCLUSIVELY BY ARBITRATION (EACH SUCH ARBITRATION, AN "ARBITRATION") IN NEW YORK CITY BEFORE A PANEL OF THREE NEUTRAL ARBITRATORS AGREED TO BY THE PLEDGEES AND THE COMPANY (COLLECTIVELY, THE "ARBITRATORS") IN ACCORDANCE WITH AND PURSUANT TO THE THEN EXISTING COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. EACH PLEDGEE HEREBY IRREVOCABLY WAIVES ANY RIGHT TO ASSERT SUCH CLAIMS IN ANY OTHER FORUM. THE ARBITRATORS SHALL HAVE THE POWER IN THEIR DISCRETION TO AWARD SPECIFIC PERFORMANCE OR INJUNCTIVE RELIEF (BUT SHALL NOT HAVE THE POWER TO RENDER ANY INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES) AND REASONABLE ATTORNEYS' FEES AND EXPENSES TO ANY PARTY IN ANY ARBITRATION. THE ARBITRATORS MAY NOT CHANGE, MODIFY OR ALTER ANY EXPRESS CONDITION, TERM OR PROVISION OF THIS AGREEMENT OR OF ANY RELATED AGREEMENT NOR SHALL THEY HAVE THE POWER TO RENDER ANY AWARD AGAINST THE PLEDGEES THAT WOULD HAVE SUCH EFFECT. EACH ARBITRATION AWARD SHALL BE FINAL AND BINDING UPON THE PARTIES SUBJECT THERETO AND JUDGMENT MAY BE ENTERED THEREON IN ANY COURT OF COMPETENT JURISDICTION. THE SERVICE OF ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN CONNECTION WITH AN ARBITRATION OR FOR THE ENFORCEMENT OF ANY ARBITRATION AWARD MAY BE MADE IN THE SAME MANNER AS COMMUNICATIONS MAY BE GIVEN UNDER SECTION 18(e) HEREOF. NOTWITHSTANDING THE FOREGOING, NO PROVISIONS OF THIS SECTION 18(g) NOR ANY OTHER PROVISION CONTAINED IN THIS AGREEMENT OR IN ANY OTHER DOCUMENT SHALL LIMIT IN ANY MANNER WHATSOEVER THE PLEDGEES' RIGHT TO COMMENCE AN ACTION AGAINST OR IN CONNECTION WITH ANY PLEDGOR OR ANY OF THEIR RESPECTIVE PROPERTIES IN ANY COURT OF COMPETENT JURISDICTION OR OTHERWISE UTILIZE JUDICIAL PROCESS IN CONNECTION WITH OR ARISING OUT OF THE PLEDGEES' RIGHTS AND REMEDIES UNDER THIS AGREEMENT AND/OR ANY OTHER DOCUMENT OR OTHERWISE (ANY SUCH ACTION, A "COURT ACTION"). COURT ACTIONS MAY BE BROUGHT BY THE PLEDGEES IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION AND EACH PLEDGOR IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH STATE AND FEDERAL COURTS AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE OF INCONVENIENT FORUM OR LACK OF PERSONAL JURISDICTION IN SUCH FORUM OR RIGHT OF REMOVAL OR RIGHT TO JURY TRIAL UNDER ANY APPLICABLE LAW OR DECISION OR OTHERWISE. SERVICE OF ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN CONNECTION WITH A COURT ACTION MAY BE MADE IN THE SAME MANNER AS COMMUNICATIONS MAY BE GIVEN UNDER SECTION 18(e). IN ADDITION, THE PLEDGEES MAY SERVE PROCESS IN ANY OTHER MANNER PERMITTED UNDER APPLICABLE LAW. (h) It is understood and agreed that any person or entity that desires to become a Pledgor hereunder, or is required to execute a counterpart of this Agreement after the date hereof pursuant to the requirements of any Document, shall become a Pledgor hereunder by (x) executing a Joinder Agreement in form and substance satisfactory to the Pledgees, (y) delivering supplements to such exhibits and annexes to such Documents as the Pledgees shall reasonably request and/or set forth in such joinder agreement and (z) taking all actions as specified in this Agreement as would have been taken by such Pledgor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Pledgees and with all documents and actions required above to be taken to the reasonable satisfaction of the Pledgees. (i) This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same agreement. Any signature delivered by a party by facsimile transmission shall be deemed an original signature hereto. [Remainder of Page Intentionally Left Blank] IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first written above. EPIXTAR CORP. By: /s/ Ilene Kaminsky Name: Ilene Kaminsky Title CEO VOXX CORPORATION By: /s/ Ilene Kaminsky Name: Ilene Kaminsky Title: CEO EPIXTAR INTERNATIONAL CONTACT CENTER GROUP, INC. By: /s/ Ilene Kaminsky Name: Ilene Kaminsky Title: CEO EPIXTAR MARKETING CORP. By: /s/ Ilene Kaminsky Name: Ilene Kaminsky Title: CEO Sands Brothers Venture Capital LLC Sands Brothers Venture Capital II, LLC Sands Brothers Venture Capital III, LLC Sands Brothers Venture Capital IV, LLC By: /s/ Steven Sands ---------------- Name: Steven Sands Title: Manager SCHEDULE A to the Stock Pledge Agreement Pledged Stock
- ---------------------------- ---------------------------- -------------------- ---------------------- ---------------- ------------- Pledgor Issuer Class of Stock Stock Certificate Par Value Number of ------- ------ -------------- ------------------ --------- ------------- Number Shares - ---------------------------- ---------------------------- -------------------- ---------------------- ---------------- ------------- Epixtar Corp. Voxx Corporation - ---------------------------- ---------------------------- -------------------- ---------------------- ---------------- ------------- Voxx Corporation Epixtar International Contact Center Group, Inc. - ---------------------------- ---------------------------- -------------------- ---------------------- ---------------- ------------- - ---------------------------- ---------------------------- -------------------- ---------------------- ---------------- -------------
EX-4.13.27 28 b406530ex4_13-27.txt EXHIBIT 4.13.27 EXHIBIT 4.13.27 GUARANTY New York, New York April __, 2005 FOR VALUE RECEIVED, and in consideration of note purchases from, loans made or to be made or credit otherwise extended or to be extended by Sands Brothers Venture Capital LLC, Sands Brothers Venture Capital II LLC, Sands Brothers Venture Capital III LLC and Sands Brothers Venture Capital IV LLC (collectively, the "Noteholders") to or for the account of Epixtar Corp., a Florida corporation ("EPXR"), and/or Voxx Corporation, a Florida corporation ("Voxx") (EPXR and Voxx, together with each applicable subsidiary of EPXR, collectively, the "Debtor"), from time to time and at any time and for other good and valuable consideration and to induce Noteholders, in its discretion, to purchase such notes, make such loans or extensions of credit and to make or grant such renewals, extensions, releases of collateral or relinquishments of legal rights as Noteholders may deem advisable, each of the undersigned (and each of them if more than one, the liability under this Guaranty being joint and several) (jointly and severally referred to as "Guarantors " or "the undersigned") unconditionally guaranties to Noteholders, its successors, endorsees and assigns the prompt payment when due (whether by acceleration or otherwise) of all present and future obligations and liabilities of any and all kinds of Debtor to Noteholders and of all instruments of any nature evidencing or relating to any such obligations and liabilities upon which Debtor or one or more parties and Debtor is or may become liable to Noteholders, whether incurred by Debtor as maker, endorser, drawer, acceptor, guarantors , accommodation party or otherwise, and whether due or to become due, secured or unsecured, absolute or contingent, joint or several, and however or whenever acquired by Noteholders, whether arising under, out of, or in connection with (i) that certain Securities Purchase Agreement dated as of the date hereof by and between the Debtor and Noteholders (the "Securities Purchase Agreement") and/or (ii) each Related Agreement referred to in the Securities Purchase Agreement (the Securities Purchase Agreement and each Related Agreement, as each may be amended, modified, restated or supplemented from time to time, are collectively referred to herein as the "Documents"), or any documents, instruments or agreements relating to or executed in connection with the Documents or any documents, instruments or agreements referred to therein or otherwise, or any other indebtedness, obligations or liabilities of the Debtor to Noteholders, whether now existing or hereafter arising, direct or indirect, liquidated or unliquidated, absolute or contingent, due or not due and whether under, pursuant to or evidenced by a note, agreement, guaranty, instrument or otherwise (all of which are herein collectively referred to as the "Obligations"), and irrespective of the genuineness, validity, regularity or enforceability of such Obligations, or of any instrument evidencing any of the Obligations or of any collateral therefor or of the existence or extent of such collateral, and irrespective of the allowability, allowance or disallowance of any or all of the Obligations in any case commenced by or against Debtor under Title 11, United States Code, including, without limitation, obligations or indebtedness of Debtor for post-petition interest, fees, costs and charges that would have accrued or been added to the Obligations but for the commencement of such case, irrespective of the allowability, allowance or disallowance of such post-petition interest, fees, costs and charges; provided that, notwithstanding the foregoing, the "Obligations" shall not include any principal amount of indebtedness in excess of an aggregate amount of $1,500,000 and the rate of interest and fees related to the Obligations shall not exceed the rate of interest and fees provided for in the Documents (as in effect on the date hereof). Terms not otherwise defined herein shall have the meaning assigned such terms in the Securities Purchase Agreement. In furtherance of the foregoing, the undersigned hereby agrees as follows: 154. No Impairment. Noteholders may at any time and from time to time, either before or after the maturity thereof, without notice to or further consent of the undersigned, extend the time of payment of, exchange or surrender any collateral for, renew or extend any of the Obligations or increase or decrease the interest rate thereon, or any other agreement with Debtor or with any other party to or person liable on any of the Obligations, or interested therein, for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of any agreement between Noteholders and Debtor or any such other party or person, or make any election of rights Noteholders may deem desirable under the United States Bankruptcy Code, as amended, or any other federal or state bankruptcy, reorganization, moratorium or insolvency law relating to or affecting the enforcement of creditors' rights generally (any of the foregoing, an "Insolvency Law") without in any way impairing or affecting this Guaranty. This instrument shall be effective regardless of the subsequent incorporation, merger or consolidation of Debtor, or any change in the composition, nature, personnel or location of Debtor and shall extend to any successor entity to Debtor including a debtor in possession or the like under any Insolvency Law. 155. Guaranty Absolute. Subject to Section 5(c), each of the undersigned jointly and severally guarantees that the Obligations will be paid strictly in accordance with the terms of the Documents and/or any other document, instrument or agreement creating or evidencing the Obligations, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of Debtor with respect thereto. Guarantors hereby knowingly accept the full range of risk encompassed within a contract of "continuing guaranty" which risk includes the possibility that Debtor will contract additional indebtedness for which Guarantors may be liable hereunder after Debtor's financial condition or ability to pay its lawful debts when they fall due has deteriorated, whether or not Debtor has properly authorized incurring such additional indebtedness. The undersigned acknowledge that (i) no oral representations, including any representations to extend credit or provide other financial accommodations to Debtor, have been made by Noteholders to induce the undersigned to enter into this Guaranty and (ii) any extension of credit to the Debtor shall be governed solely by the provisions of the Documents. The liability of each of the undersigned under this Guaranty shall be absolute and unconditional, in accordance with its terms, and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including, without limitation: (a) any waiver, indulgence, renewal, extension, amendment or modification of or addition, consent or supplement to or deletion from or any other action or inaction under or in respect of the Documents or any other instruments or agreements relating to the Obligations or any assignment or transfer of any thereof, (b) any lack of validity or enforceability of any Document or other documents, instruments or agreements relating to the Obligations or any assignment or transfer of any thereof, (c) any furnishing of any additional security to Noteholders or its assignees or any acceptance thereof or any release of any security by Noteholders or its assignees, (d) any limitation on any party's liability or obligation under the Documents or any other documents, instruments or agreements relating to the Obligations or any assignment or transfer of any thereof or any invalidity or unenforceability, in whole or in part, of any such document, instrument or agreement or any term thereof, (e) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to Debtor, or any action taken with respect to this Guaranty by any trustee or receiver, or by any court, in any such proceeding, whether or not the undersigned shall have notice or knowledge of any of the foregoing, (f) any exchange, release or nonperfection of any collateral, or any release, or amendment or waiver of or consent to departure from any guaranty or security, for all or any of the Obligations or (g) any other circumstance which might otherwise constitute a defense available to, or a discharge of, the undersigned. Any amounts due from the undersigned to Noteholders shall bear interest until such amounts are paid in full at the highest rate then applicable to the Obligations. Obligations include post-petition interest whether or not allowed or allowable. 156. Waivers. 156.1 This Guaranty is a guaranty of payment and not of collection. Noteholders shall be under no obligation to institute suit, exercise rights or remedies or take any other action against Debtor or any other person liable with respect to any of the Obligations or resort to any collateral security held by it to secure any of the Obligations as a condition precedent to the undersigned being obligated to perform as agreed herein and each of the Guarantors hereby waives any and all rights which it may have by statute or otherwise which would require Noteholders to do any of the foregoing. Each of the Guarantors further consents and agrees that Noteholders shall be under no obligation to marshal any assets in favor of Guarantors, or against or in payment of any or all of the Obligations. The undersigned hereby waives all suretyship defenses and any rights to interpose any defense, counterclaim or offset of any nature and description which the undersigned may have or which may exist between and among Noteholders, Debtor and/or the undersigned with respect to the undersigned's obligations under this Guaranty, or which Debtor may assert on the underlying debt, including but not limited to failure of consideration, breach of warranty, fraud, payment (other than cash payment in full of the Obligations), statute of frauds, bankruptcy, infancy, statute of limitations, accord and satisfaction, and usury. 156.2 Each of the undersigned further waives (i) notice of the acceptance of this Guaranty, of the making of any such loans or extensions of credit, and of all notices and demands of any kind to which the undersigned may be entitled, including, without limitation, notice of adverse change in Debtor's financial condition or of any other fact which might materially increase the risk of the undersigned and (ii) presentment to or demand of payment from anyone whomsoever liable upon any of the Obligations, protest, notices of presentment, non-payment or protest and notice of any sale of collateral security or any default of any sort. 156.3 Notwithstanding any payment or payments made by the undersigned hereunder, or any setoff or application of funds of the undersigned by Noteholders, the undersigned shall not be entitled to be subrogated to any of the rights of Noteholders against Debtor or against any collateral or guarantee or right of offset held by Noteholders for the payment of the Obligations, nor shall the undersigned seek or be entitled to seek any contribution or reimbursement from Debtor in respect of payments made by the undersigned hereunder, until all amounts owing to Noteholders by Debtor on account of the Obligations are paid in full and Noteholders' obligation to extend credit pursuant to the Documents have been terminated. If, notwithstanding the foregoing, any amount shall be paid to the undersigned on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full and Noteholders' obligation to extend credit pursuant to the Documents shall not have been terminated, such amount shall be held by the undersigned in trust for Noteholders, segregated from other funds of the undersigned, and shall forthwith upon, and in any event within two (2) business days of, receipt by the undersigned, be turned over to Noteholders in the exact form received by the undersigned (duly endorsed by the undersigned to Noteholders, if required), to be applied against the Obligations, whether matured or unmatured, in such order as Noteholders may determine, subject to the provisions of the Documents. Any and all present and future debts and obligations of Debtor to any of the undersigned are hereby waived and postponed in favor of, and subordinated to the full payment and performance of, all present and future debts and Obligations of Debtor to Noteholders. 157. Security. All sums at any time to the credit of the undersigned and any property of the undersigned in Noteholders' possession or in the possession of any bank, financial institution or other entity that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, Noteholders (each such entity, an "Affiliate") shall be deemed held by Noteholders or such Affiliate, as the case may be, as security for any and all of the undersigned's obligations to Noteholders and to any Affiliate of Noteholders, no matter how or when arising and whether under this or any other instrument, agreement or otherwise. 158. Representations and Warranties. Each of the undersigned respectively, hereby jointly and severally represents and warrants (all of which representations and warranties shall survive until all Obligations are indefeasibly satisfied in full and the Documents have been irrevocably terminated), that: 158.1 Corporate Status. It is a corporation, partnership or limited liability company, as the case may be, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization indicated on the signature page hereof and has full power, authority and legal right to own its property and assets and to transact the business in which it is engaged. 158.2 Authority and Execution. It has full power, authority and legal right to execute and deliver, and to perform its obligations under, this Guaranty and has taken all necessary corporate, partnership or limited liability company, as the case may be, action to authorize the execution, delivery and performance of this Guaranty. 158.3 Legal, Valid and Binding Character. This Guaranty constitutes its legal, valid and binding obligation enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the enforcement of creditor's rights and general principles of equity that restrict the availability of equitable or legal remedies. 158.4 Violations. The execution, delivery and performance of this Guaranty will not violate any requirement of law applicable to it or any contract, agreement or instrument to it is a party or by which it or any of its property is bound or result in the creation or imposition of any mortgage, lien or other encumbrance other than to Noteholders on any of its property or assets pursuant to the provisions of any of the foregoing, which, in any of the foregoing cases, could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. 158.5 Consents or Approvals. No consent of any other person or entity (including, without limitation, any creditor of the undersigned) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required in connection with the execution, delivery, performance, validity or enforceability of this Guaranty by it, except to the extent that the failure to obtain any of the foregoing could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. 158.6 Litigation. No litigation, arbitration, investigation or administrative proceeding of or before any court, arbitrator or governmental authority, bureau or agency is currently pending or, to the best of its knowledge, threatened (i) with respect to this Guaranty or any of the transactions contemplated by this Guaranty or (ii) against or affecting it, or any of its property or assets, which, in each of the foregoing cases, if adversely determined, could reasonably be expected to have a Material Adverse Effect. 158.7 Financial Benefit. It has derived or expects to derive a financial or other advantage from each and every loan, advance or extension of credit made under the Documents or other Obligation incurred by the Debtor to Noteholders. 159. Acceleration. 159.1 If any breach of any covenant or condition or other event of default shall occur and be continuing under any agreement made by Debtor or any of the undersigned to Noteholders, or either Debtor or any of the undersigned should at any time become insolvent, or make a general assignment, or if a proceeding in or under any Insolvency Law shall be filed or commenced by, or in respect of, any of the undersigned, or if a notice of any lien, levy, or assessment is filed of record with respect to any assets of any of the undersigned by the United States of America or any department, agency, or instrumentality thereof, or if any taxes or debts owing at any time or times hereafter to any one of them becomes a lien or encumbrance upon any assets of the undersigned in Noteholders' possession, or otherwise, any and all Obligations shall for purposes hereof, at Noteholders' option, be deemed due and payable without notice notwithstanding that any such Obligation is not then due and payable by Debtor. 159.2 Each of the undersigned will promptly notify Noteholders of any default by such undersigned in its respective performance or observance of any term or condition of any agreement to which the undersigned is a party if the effect of such default is to cause, or permit the holder of any obligation under such agreement to cause, such obligation to become due prior to its stated maturity and, if such an event occurs, Noteholders shall have the right to accelerate such undersigned's obligations hereunder. 160. Payments from Guarantors. Noteholders, in its sole and absolute discretion, with or without notice to the undersigned, may apply on account of the Obligations any payment from the undersigned or any other guarantors, or amounts realized from any security for the Obligations, or may deposit any and all such amounts realized in a non-interest bearing cash collateral deposit account to be maintained as security for the Obligations. 161. Costs. The undersigned shall pay on demand, all costs, fees and expenses (including expenses for legal services of every kind) relating or incidental to the enforcement or protection of the rights of Noteholders hereunder or under any of the Obligations. 162. No Termination. This is a continuing irrevocable guaranty and shall remain in full force and effect and be binding upon the undersigned, and each of the undersigned's successors and assigns, until all of the Obligations have been paid in full and Noteholders' obligation to extend credit pursuant to the Documents has been irrevocably terminated. If any of the present or future Obligations are guarantied by persons, partnerships or corporations in addition to the undersigned, the death, release or discharge in whole or in part or the bankruptcy, merger, consolidation, incorporation, liquidation or dissolution of one or more of them shall not discharge or affect the liabilities of any undersigned under this Guaranty. 163. Recapture. Anything in this Guaranty to the contrary notwithstanding, if Noteholders receives any payment or payments on account of the liabilities guaranteed hereby, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver, or any other party under any Insolvency Law, common law or equitable doctrine, then to the extent of any sum not finally retained by Noteholders, the undersigned's obligations to Noteholders shall be reinstated and this Guaranty shall remain in full force and effect (or be reinstated) until payment shall have been made to Noteholders, which payment shall be due on demand. 164. Books and Records. The books and records of Noteholders showing the account between Noteholders and Debtor shall be admissible in evidence in any action or proceeding, shall be binding upon the undersigned for the purpose of establishing the items therein set forth and shall constitute prima facie proof thereof. 165. No Waiver. No failure on the part of Noteholders to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Noteholders of any right, remedy or power hereunder preclude any other or future exercise of any other legal right, remedy or power. Each and every right, remedy and power hereby granted to Noteholders or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by Noteholders at any time and from time to time. 166. Waiver of Jury Trial. EACH OF THE UNDERSIGNED DOES HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED ON OR WITH RESPECT TO THIS GUARANTY OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR RELATING OR INCIDENTAL HERETO. THE UNDERSIGNED DOES HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF NOTEHOLDERS HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT NOTEHOLDERS WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. 167. Governing Law; Jurisdiction; Amendments. THIS INSTRUMENT CANNOT BE CHANGED OR TERMINATED ORALLY, AND SHALL BE GOVERNED, CONSTRUED AND INTERPRETED AS TO VALIDITY, ENFORCEMENT AND IN ALL OTHER RESPECTS IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT HAVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS. EXCEPT AS SET FORTH BELOW IN THIS SECTION 14, ANY AND ALL DISPUTES, CONTROVERSIES AND CLAIMS THAT ANY GUARANTOR MAY ASSERT AGAINST NOTEHOLDERS ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY OTHER DOCUMENT SHALL BE DETERMINED EXCLUSIVELY BY ARBITRATION (EACH SUCH ARBITRATION, AN "ARBITRATION") IN NEW YORK CITY BEFORE A PANEL OF THREE NEUTRAL ARBITRATORS AGREED TO BY NOTEHOLDERS AND THE DEBTOR (COLLECTIVELY, THE "ARBITRATORS") IN ACCORDANCE WITH AND PURSUANT TO THE THEN EXISTING COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY RIGHT TO ASSERT SUCH CLAIMS IN ANY OTHER FORUM. THE ARBITRATORS SHALL HAVE THE POWER IN THEIR DISCRETION TO AWARD SPECIFIC PERFORMANCE OR INJUNCTIVE RELIEF (BUT SHALL NOT HAVE THE POWER TO RENDER ANY INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES) AND REASONABLE ATTORNEYS' FEES AND EXPENSES TO ANY PARTY IN ANY ARBITRATION. THE ARBITRATORS MAY NOT CHANGE, MODIFY OR ALTER ANY EXPRESS CONDITION, TERM OR PROVISION OF THIS GUARANTY OR OF ANY OTHER DOCUMENT NOR SHALL THEY HAVE THE POWER TO RENDER ANY AWARD AGAINST NOTEHOLDERS THAT WOULD HAVE SUCH EFFECT. EACH ARBITRATION AWARD SHALL BE FINAL AND BINDING UPON THE PARTIES SUBJECT THERETO AND JUDGMENT MAY BE ENTERED THEREON IN ANY COURT OF COMPETENT JURISDICTION. THE SERVICE OF ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN CONNECTION WITH AN ARBITRATION OR FOR THE ENFORCEMENT OF ANY ARBITRATION AWARD MAY BE MADE IN THE SAME MANNER AS COMMUNICATIONS MAY BE GIVEN UNDER SECTION 17 HEREOF. NOTWITHSTANDING THE FOREGOING, THE PROVISIONS OF THIS SECTION 14 NOR ANY OTHER PROVISION CONTAINED IN THIS GUARANTY OR IN ANY OTHER DOCUMENT SHALL LIMIT IN ANY MANNER WHATSOEVER NOTEHOLDERS' RIGHT TO COMMENCE AN ACTION AGAINST OR IN CONNECTION WITH THE DEBTOR, ANY GUARANTOR OR THEIR RESPECTIVE PROPERTIES IN ANY COURT OF COMPETENT JURISDICTION OR OTHERWISE UTILIZE JUDICIAL PROCESS IN CONNECTION WITH OR ARISING OUT OF NOTEHOLDERS' RIGHTS AND REMEDIES UNDER THIS GUARANTY AND/OR ANY OTHER DOCUMENT OR OTHERWISE (ANY SUCH ACTION, A "COURT ACTION"). COURT ACTIONS MAY BE BROUGHT BY NOTEHOLDERS IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION AND EACH GUARANTOR IRREVOCABLY SUBMITS TO THE JURISDICTION OF SUCH STATE AND FEDERAL COURTS AND IRREVOCABLY WAIVES ANY CLAIM OR DEFENSE OF INCONVENIENT FORUM OR LACK OF PERSONAL JURISDICTION IN SUCH FORUM OR RIGHT OF REMOVAL OR RIGHT TO JURY TRIAL UNDER ANY APPLICABLE LAW OR DECISION OR OTHERWISE. SERVICE OF ANY NOTICE, PROCESS, MOTION OR OTHER DOCUMENT IN CONNECTION WITH A COURT ACTION MAY BE MADE IN THE SAME MANNER AS COMMUNICATIONS MAY BE GIVEN UNDER SECTION 17. IN ADDITION, NOTEHOLDERS MAY SERVE PROCESS IN ANY OTHER MANNER PERMITTED UNDER APPLICABLE LAW. 168. Severability. To the extent permitted by applicable law, any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 169. Amendments, Waivers, etc. No amendment or waiver of any provision of this Guaranty nor consent to any departure by the undersigned therefrom shall in any event be effective unless the same shall be in writing executed by each of the undersigned directly affected by such amendment and/or waiver, Laurus Master Fund, Ltd. and Noteholders. Notwithstanding anything to the contrary contained in this Guaranty, the terms and conditions of this Guaranty shall be subject in all respects to the terms and conditions of the Intercreditor Agreement. In the event that the terms and conditions of this Guaranty are in contravention of the terms and conditions of the Intercreditor Agreement, the terms and conditions of the Intercreditor Agreement shall prevail. 170. Notice. All notices, requests and demands to or upon the undersigned, shall be in writing and shall be deemed to have been duly given or made (a) when delivered, if by hand, (b) three (3) days after being sent, postage prepaid, if by registered or certified mail, (c) when confirmed electronically, if by facsimile, or (d) when delivered, if by a recognized overnight delivery service in each event, to the numbers and/or address set forth beneath the signature of the undersigned. 171. Successors. Noteholders may, from time to time, without notice to the undersigned, sell, assign, transfer or otherwise dispose of all or any part of the Obligations and/or rights under this Guaranty. Without limiting the generality of the foregoing, Noteholders may assign, or grant participations to, one or more banks, financial institutions or other entities all or any part of any of the Obligations. In each such event, Noteholders, its Affiliates and each and every immediate and successive purchaser, assignee, transferee or holder of all or any part of the Obligations shall have the right to enforce this Guaranty, by legal action or otherwise, for its own benefit as fully as if such purchaser, assignee, transferee or holder were herein by name specifically given such right. Noteholders shall have an unimpaired right to enforce this Guaranty for its benefit with respect to that portion of the Obligations which Noteholders has not disposed of, sold, assigned, or otherwise transferred. 172. Release. Nothing except cash payment in full of the Obligations shall release any of the undersigned from liability under this Guaranty. 20. Joinder. It is understood and agreed that any person or entity that desires to become a Guarantor hereunder, or is required to execute a counterpart of this Guaranty after the date hereof pursuant to the requirements of any Document, shall become a Guarantor hereunder by (x) executing a joinder agreement in form and substance satisfactory to the Noteholders, (y) delivering supplements to such exhibits and annexes to such Documents as the Noteholders shall reasonably request and/or as may be required by such joinder agreement and (z) taking all actions as specified in this Guaranty as would have been taken by such such Guarantor had it been an original party to this Guaranty, in each case with all documents required above to be delivered to the Noteholders and with all documents and actions required above to be taken to the reasonable satisfaction of the Noteholders. [REMAINDER OF THIS PAGE IS BLANK. SIGNATURE PAGE IMMEDIATELY FOLLOWS] IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned this ___ day of ______, 2005. ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- ----------------------------------------------- EPIXTAR INTERNATIONAL CONTACT CENTER GROUP, INC. By: /s/ Ilene Kaminsky ----------------------------------- Name: Ilene Kaminsky ----------------------------------- Title: CEO ----------------------------------- Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 Telephone: 305-503-8600 Facsimile: 305-503-8610 State of Incorporation: Delaware EPIXTAR CORP. By: /s/ Ilene Kaminsky Name: Ilene Kaminsky Title: CEO Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 Telephone: 305-503-8600 Facsimile: 305-503-8610 State of Incorporation: Florida VOXX CORPORATION By: /s/ Ilene Kaminsky ----------------------------------------- Name: Ilene Kaminsky ----------------------------------------- Title: CEO ----------------------------------------- Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 Telephone: 305-503-8600 Facsimile: 305-503-8610 State of Incorporation: Florida EPIXTAR MARKETING CORP. By: /s/ Ilene Kaminsky ----------------------------------------- Name: Ilene Kaminsky ----------------------------------------- Title: CEO ----------------------------------------- Address: 11900 Biscayne Boulevard Suite 700 Miami, Florida 33181 Telephone: 305-503-8600 Facsimile: 305-503-8610 State of Incorporation: Florida -----END PRIVACY-ENHANCED MESSAGE-----