REGISTRATION RIGHTS AGREEMENT
Issuer: ZiaSun Technologies, Inc. (the "Company" or "ZiaSun")
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Date: January 14, 2000
This Registration Rights Agreement (the "Agreement") is entered into as of the
above date by and between Continental Capital & Equity Corporation, a Florida
Corporation, hereinafter referred to as "CCEC", whose address is 000 Xxxxxx
Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxx, XX 00000 and the above Company, whose address
is set forth above.
RECITALS
A. Whereas, concurrently with the execution of this Agreement, CCEC and the
Company have executed a Client Services Agreement (the "CSA") under which CCEC
has acquired Warrants (the "Warrants") pursuant to which CCEC has the right to
acquire from the Company the 200,000 shares of common stock (as defined in the
Warrant), with pricing per share calculated as set forth in the CSA.
B. Whereas, by this Agreement, CCEC and the Company desire to set forth the
registration rights of the shares issuable upon exercise of the Warrants, all as
provided herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises, covenants and
conditions hereinafter set forth, the parties hereto mutually agree as follows:
1. Registration Rights. The Company covenants and agrees as follows:
1.1 Definitions. For purposes of this Section 1:
1.1.1 The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act of 1933, as amended
(the "Securities Act"), and the declaration or ordering of effectiveness of
such registration statement or document;
1.1.2 The term "Registrable Securities" means (i) the Shares of Common
Stock of the Company issuable or issued upon exercise of the Warrants, or
conversion of said Warrants; and (ii) any Common Stock of the Company
issued (or issuable upon the conversion or exercise of any Warrant, right
or other security which is issued) as a dividend or other distribution with
respect to, or in exchange for or in replacement of, any stock referred to
in this subsection 1.1.1(i).
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1.1.3 The term "SEC" means the Securities and Exchange Commission.
1.2 Company Registration.
1.2.1 Piggyback Registration. If at any time or from time to time, the
Company shall determine to register any of its securities, for its own
account or the account of any of its shareholders, other than a
registration on S-8 relating solely to employee stock option or purchase
plans, or a registration on Form S-4 relating solely to an SEC Rule 145
transaction, or any successor to such forms, which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of Registrable Securities, the
Company will:
(i) promptly give to CCEC written notice thereof (which shall
include a list of the jurisdictions in which the Company intends to
attempt to qualify such securities under the applicable blue sky or
other state securities laws); and
(ii) include in such registration (and compliance), and in any
underwriting involved therein, all the Registrable Securities
specified in a written request or requests, made within 20 days after
receipt of such written notice from the Company, by CCEC, except as
set forth in subsection 1.3 below.
Notwithstanding the above, if the Company shall determine to complete a
registration on Form S-4 relating solely to an SEC Rule 145 transaction, or a
successor form, and the Company in its sole discretion determines that the
concurrent registration of the Registrable Securities will not material effect
or delay the registration of the underlying transaction which is the subject of
the Form S-4 registration, then the Company will include in the Form S-4
registration statement the registration of the Registrable Securities.
1.2.2 Demand Registration. Subject to the underwriting provisions
contained in this document, if at any time or from time to time following
the exercise of Round 1 of Warrants as set forth in section 1.3(a) of the
Warrant, CCEC provides the Company with a written demand (the "Demand")
that the Company effect a registration under the Act of all or any part of
Registrable Securities, then the Company shall use very reasonable effort
to effect such registration (a "Demand Registration") as to all Registrable
Securities included in the Demand received by the Company. Subject to (i)
the provisions of Section 1.3 hereof and (ii) the absolute priority of
CCEC, the Company may include in any Demand Registration, other securities
of the Company whether being sold for the accounts of others or for the
account of the Company.
1.2.3 Limitations on Demand Registrations. The rights of the CCEC to
effect a Demand Registration shall be limited as follows:
(i) The Company shall not be required to effect Demand
Registrations unless the Company qualifies to use Form S-3 or any
similar short form registration. ZiaSun shall use every reasonable
effort to qualify for registration on Form S-3 or its successor form;
and,
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(ii) ZiaSun shall not be required to effect a registration
pursuant to this subsection within 90 days of the effective date of
any other registration statement; and, the Company shall not be
obligated to effect a registration, qualification, or compliance under
this Article III during the period starting sixty (60) days prior to
the Company's good faith estimate of the date of filing of, and ending
on a date one hundred eighty (180) days following the effective date
of, a Company-initiated registration (other than a registration of
securities in a Rule 145 transaction or with respect to an employee
benefit plan), provided that the Company is actively employing in good
faith all reasonable efforts to cause such registration to become
effective; and,
(iii) ZiaSun shall not be required to effect a registration
pursuant to this subsection if it has, within the 12 month period
preceding the date of any request under this subsection already
effected two registrations pursuant to this subsection; and,
(iv) ZiaSun shall not be required to effect a registration
pursuant to this subsection unless CCEC's request for registration
proposes to dispose of shares of Registrable Securities having an
aggregate price to the public (before deduction of underwriting
discounts and expenses of sale) of at least $250,000; and,
(v) ZiaSun shall not be required to effect a registration
pursuant to this subsection if ZiaSun shall furnish to CCEC a
certificate signed by the President of ZiaSun stating that in the good
faith judgment of the Board of Directors of ZiaSun, it would be
seriously detrimental to ZiaSun and its shareholders for such Form S-3
registration to be effected at such time, in which event ZiaSun shall
have the right to defer the filing of the Form S-3 registration
statement for a period of not more than 90 days after receipt of the
request of CCEC under this Section, provided, however, that ZiaSun
shall not utilize this right more than once in any 12-month period;
and,
(vi) Unless waived by CCEC, any Demand Registration must be
firmly underwritten by underwriters selected by the CCEC, subject to
the approval of the Company, which approval shall not be unreasonably
withheld, and the Company and the CCEC shall obtain the commitment of
such underwriter to firmly underwrite the offering; and,
(vii) Subject to the foregoing, ZiaSun will use its best efforts
to effect promptly the registration of all shares of Registrable
Securities on Form S-3 to the extent requested by CCEC thereof for
purposes of disposition; and,
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(viii) The Company will not be deemed to have provided a Demand
Registration hereunder unless, in addition to the satisfaction of any
other conditions required by this Agreement, such registration has
become effective.
1.2.4 Additional Qualifications. The Company shall use its best
efforts to cause such Registrable Securities to be registered on Form S-3
or such other short form, and to be qualified in such jurisdictions as CCEC
may reasonably request; provided, however, that the Company shall not be
required to effect more than one (1) registration pursuant to this
paragraph in any six (6) month period. The obligations of this paragraph
shall be subject to the limitations set forth above.
1.3 Underwriting. If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall so
advise CCEC as a part of the written notice given pursuant to section 1.2. In
such event the right of CCEC to registration pursuant to section 1.2 shall be
conditioned upon participation in such underwriting and the inclusion of such
Registrable Securities in the underwriting to the extent provided herein. All
shareholders, including CCEC, proposing to distribute their securities through
such underwriting shall (together with the Company and the other shareholders
distributing their securities through such underwriting) enter into an
underwriting agreement in customary form with the underwriter or underwriters
selected for such underwriting by the Company. *
* Notwithstanding any other provision of this Agreement, if the
managing underwriter advises the Company that marketing factors
require a limitation of the number of shares to be underwritten, then
the Company shall so advise all holders of Registrable Securities and
the number of shares of Registrable Securities that may be included in
the registration and underwriting shall be allocated among all holders
of Registrable Securities in proportion, as nearly as practicable, to
the respective amounts of Registrable Securities held by such holders
at the time of filing the registration statement.
If such offering is other than the first registered offering of ZiaSun
securities to the public, the underwriter may not limit the Registrable
Securities to be included in such offering to less than 20% of the securities
included therein (based on aggregate market values.) ZiaSun shall advise CCEC
and all shareholders of Registrable Securities which would otherwise be
registered and underwritten pursuant hereto of any such limitations, and the
number of shares of Registrable Securities that may be included in the
registration. If CCEC disapproves of the terms of any such underwriting, they
may elect to withdraw there from by written notice to ZiaSun and the
underwriter. Any securities excluded or withdrawn from such underwriting shall
not be transferred prior to 90 days after the effective date of the registration
statement for such underwriting, or such shorter period as the underwriter may
require.
1.4 Expenses of Registration. All expenses incurred in connection with any
registration, qualification or compliance pursuant to this Section 1 including
without limitation, all registration, filing and qualification fees, printing
expenses, fees and disbursements of counsel for the Company and expenses of any
special audits incidental to or required by such registration, shall be borne by
the Company except the Company shall not be required to pay underwriters' fees,
discounts or commissions relating to Registrable Securities. All expenses of any
registered offering not otherwise borne by the Company shall be borne pro rata
among CCEC and the shareholders participating in the offering and the Company.
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Further, the Company shall not be required to pay for expenses of any
registration proceeding begun pursuant to this Section, the request of which has
been subsequently withdrawn by CCEC, in which case, such expenses shall be borne
by the CCEC (including Registrable Securities) requesting or causing such
withdrawal.
1.5 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this
Registration Rights Agreement, the Company will keep CCEC advised in writing as
to the initiation of each registration, qualification and compliance and as to
the completion thereof. Except as otherwise provided in subsection 1.3, at its
expense the Company will:
1.5.1 Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective, and, upon the request of
CCEC, keep such registration statement effective for up to 90 days or until
CCEC has completed the distribution described in the registration statement
relating thereto, whichever first occurs; and.
1.5.2 Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such registration statement.
1.5.3 Furnish to CCEC copies of a prospectus, including a preliminary
prospectus, in conformity with the requirements of the Securities Act, and
such other documents as they may reasonably request in order to facilitate
the disposition of Registrable Securities owned by them.
1.5.4 Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or, Blue
Sky laws of such jurisdictions as shall be reasonably requested by CCEC,
provided that the Company shall not be required in connection therewith or
as a condition thereto to qualify to do business or to file a general
consent to service of process in any such states or jurisdictions.
1.5.5 In the event of any underwritten public offering enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. CCEC shall
also enter into and perform its obligations under such an agreement.
1.5.6 Notify CCEC and each shareholder of Registrable Securities
covered by such registration statement at any time when a prospectus
relating thereto is required to be delivered under the Securities Act or
the happening of any event as a result of which the prospectus included in
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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 the light of the circumstances then existing.
1.6 Indemnification.
1.6.1 The Company will indemnify CCEC and each of its officers,
directors and partners, and each person controlling such, with respect to
which such registration, qualification or compliance has been effected
pursuant to this Rights Agreement, and each underwriter, if any, and each
person who controls any underwriter of the Registrable Securities held by
or issuable to CCEC, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereto) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained
in any prospectus, offering circular or other document (including any
related registration statement, notification or the like) incident to any
such registration, qualification or compliance, or based on any omission
(or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statement therein not misleading,
or any violation or alleged violation by the Company of the Securities Act,
the Securities Exchange Act of 1934, as amended ("Exchange Act"), or any
state securities law applicable to the Company or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any such state
law and relating to action or inaction required of the Company in
connection with any such registration, qualification of compliance, and
will reimburse CCEC, each of its officers, directors and partners, and each
person controlling such, each such underwriter and each person who controls
any such underwriter, within a reasonable amount of time after incurred for
any reasonable legal and any other expenses incurred in connection with
investigating, defending or settling any such claim, loss, damage,
liability or action; provided, however, that the indemnity agreement
contained in this subsection 1.6.1 shall not apply to amounts paid in
settlement of any such claim, loss, damage, liability, or action if such
settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld); and provided further, that the Company
will not be liable in any such case to the extent that any such claim,
loss, damage or liability arises out of or is based on any untrue statement
or omission based upon written information furnished to the Company by an
instrument duly executed by CCEC or underwriter specifically for use
therein.
1.6.2 CCEC will, if Registrable Securities held by or issuable are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors
and officers, each underwriter, if any, of the Company's securities covered
by such a registration statement, each person who controls the Company
within the meaning of the Securities Act, and each other such shareholder,
each of its officers, directors and partners and each person controlling
such shareholder, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained
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in any such registration statement, prospectus, offering circular or other
document, or any 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, such shareholders,
such directors, officers, partners, persons or underwriters for any
reasonable legal or any other expenses incurred in connection with
investigating, defending or settling any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus,
offering circular or other document in reliance upon and in conformity with
written information furnished to the Company by an instrument duly executed
by CCEC specifically for use therein; provided, however, that the indemnity
agreement contained in this subsection 1.6.2 shall not apply to amounts
paid in settlement of any such claim, loss, damage, liability or action if
such settlement is effected without the consent of CCEC (which consent
shall not be unreasonably- withheld); and provided further, that the total
amount for which CCEC shall be liable under this subsection 1.6.2 shall not
in any event exceed the aggregate proceeds received by such from the sale
of Registrable Securities held by same in such registration.
1.6.3 Each party entitled to indemnification under this subsection 1.5
(the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom; provided
that counsel for the Indemnifying Party, who shall conduct the defense of
such claim or litigation, shall be approved, by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified
Party may participate in such defense at such party's expense; and provided
further, that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
hereunder, unless such failure resulted in prejudice to the Indemnifying
Party; and provided further, that an Indemnified Party (together with all
other Indemnified Parties which may be represented without conflict by one
counsel) shall have the right to retain one separate counsel, with the fees
and expenses to be paid by the Indemnifying Party, if representation of
such Indemnified Party by the counsel retained by the Indemnifying Party
would be inappropriate due to actual or potential differing interests
between such Indemnified Party and any other party represented by such
counsel in such proceeding. No Indemnifying Party, in the defense of any
such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release
from all liability in respect to such claim or litigation.
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1.7 Information by CCEC. CCEC shall promptly furnish to the Company such
information regarding themselves and the distribution proposed by such as the
Company may request in writing and as shall be required in connection with any
registration, qualification or compliance referred to herein.
1.8 Rule 144 Reporting. With a view to making available to shareholders and
CCEC, the benefits of certain rules and regulations of the SEC which may permit
the sale of the Registrable Securities to the public without registration, the
Company agrees at all times to:
1.8.1 Make and keep public information available, as those terms are
understood and defined in SEC Rule 144, after 90 days after the effective
date of the first registration filed by the Company for an offering of its
securities to the general public;
1.8.2 File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange
Act (at any time after it has become subject to such reporting
requirements); and
1.8.3 So long as CCEC owns any Registrable Securities, to furnish to
such upon request with a written statement by the Company as to its
compliance with the reporting requirements of said Rule 144 (at any time
after 90 days after the effective date of the first registration statement
filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the Exchange Act (at any time after
it has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other reports
and documents so filed by the Company as CCEC may reasonably request in
complying with any rule or regulation of the SEC allowing CCEC to sell any
such securities without registration.
1.9 Transfer of Registration Rights. CCEC's rights to cause the Company to
register their securities and keep information available, granted to them by the
Company under subsections 1.2 and 1.7 may not be assigned to a transferee or
assignee of CCEC's Registrable Securities not sold to the public. The Company
prohibits the transfer of any CCEC's rights under this subsection 1.8.
2. General.
2.1 Waivers and Amendments. With the written consent of CCEC the
obligations of the Company and the rights of CCEC under this agreement may be
waived (either generally or in a particular instance, either retroactively or
prospectively, and either for a specified period of time or indefinitely), and
with the same consent the Company, when authorized by resolution of its Board of
Directors, may enter into a supplementary agreement for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement; provided, however, that no such modification, amendment or
waiver shall reduce the aforesaid percentage of Registrable Securities. Upon the
effectuation of each such waiver, consent, agreement of amendment or
modification, the Company shall promptly give written notice thereof to CCEC and
the record shareholders of the Registrable Securities who have not previously
consented thereto in writing. This Agreement or any provision hereof may be
changed, waived, discharged or terminated only by a statement in writing signed
by the party against which enforcement of the change, waiver, discharge or
termination is sought, except to the extent provided in this subsection 2.1.
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2.2 Governing Law. This Agreement shall be governed in all respects by the
laws of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within
California.
2.3 Attorneys Fees. The parties agree that if any legal action is necessary
to enforce the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorneys' fees in addition to any other relief to which that
party may be entitled.
2.4 Successors and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties hereto.
2.5 Entire Agreement. Except as set forth below, this Agreement 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 thereof.
2.6 Notices. etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first class mail,
postage prepaid, certified or registered mail, return receipt requested,
addressed (a) if to CCEC, at such address as set forth in the heading to this
Agreement, or at such other address as furnished to the Company in writing, or
(b) if to the Company, at the Company's, address set forth in the heading to
this Agreement, or at such other address as the Company shall have furnished to
CCEC in writing.
2.7 Severability. In case any provision of this Agreement shall be invalid,
illegal, or unenforceable, the validity, legality and enforceability of the
remaining provisions of this Agreement or any provision of the other Agreements
shall not in any way be affected or impaired thereby.
2.8 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.
2.9 Counterparts and/or Facsimile Signature..8 Counterparts and/or
Facsimile Signature. This Agreement may be executed in any number of
counterparts, including counterparts transmitted by telecopier or FAX, any one
of which shall constitute an original of this Agreement. When counterparts of
facsimile copies have been executed by all parties, they shall have the same
effect as if the signatures to each counterpart or copy were upon the same
document and copies of such documents shall be deemed valid as originals. The
parties agree that all such signatures may be transferred to a single document
upon the request of any party.
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AGREED AND ACCEPTED, effective as of the date first above written.
ZiaSun Technologies, Inc.
ZiaSun Technologies, Inc.
Dated: 01/14/2000 /S/ D. Xxxxx Xxxxx
-----------------------------------
By: D. Xxxxx Xxxxx
Its: Chairman and CEO
Dated: 01/14/2000 /S/ Xxxxx X. Xxxxxxx
-----------------------------------
By: Xxxxx X. Xxxxxxx
Its: Executive Vice President
Continental Capital & Equity Corporation
Dated: 01/14/2000 /S/ Xxxx X. Xxxxxx
-----------------------------------
By: Xxxx X. Xxxxxx
Its: Chief Operating Officer
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