REGISTRATION RIGHTS
The following registration rights were granted to the holders of
450,000 shares (the "Shares") of our common stock and the shares
underlying warrants (the "Warrants") to purchase 225,000 shares, issued
by Trycera Financial, Inc. (the "Company") in a nonpublic offering
(the "Offering") conducted by the Company from September 20, 2005,
through December 31, 2005. Each investor in the Offering is granted
the following one-time "piggy-back" registration rights to register the
resale of the Shares and to register the resale of the shares of
Common Stock underlying the Warrants:
(a) Whenever the Company shall propose to file a new registration
statement (the "Registration Statement") under the Securities Act on a
form which permits the inclusion of the Shares and the shares of Common
Stock issuable upon exercise of the Warrants (the "Registerable
Shares"), it will give written notice to each investor in this Offering
at least fifteen (15) business days prior to the anticipated filing
thereof, specifying the approximate date on which the Company proposes
to file the Registration Statement and the intended method of
distribution in connection therewith, and advising the holder of the
Shares (the "Selling Shareholder") of his right to have any or all of
the Registerable Shares then held by him included among the securities
to be covered by the Registration Statement (the "Piggy-Back Rights").
(b) Subject to Section (d) and Section (e) hereof, in the event
that the Selling Shareholder has and shall elect to utilize the
Piggy-Back Rights, the Company shall include in the Registration
Statement the number of the Registerable Shares identified by the
Selling Shareholder in a written request (the "Piggy-Back Request")
given to the Company not later than ten (10) business days prior to the
proposed filing date of the Registration Statement. Except as otherwise
provided herein, the Registerable Shares identified in the Piggy-Back
Request shall be included in the Registration Statement on the same
terms and conditions as the other shares of Common Stock included in the
Registration Statement.
(c) Notwithstanding anything in this Term Sheet to the contrary,
the Selling Shareholder shall not have Piggy-Back Rights with respect to
(i) a registration statement on Form S-4, Form S-8, or Form S-3 (with
respect to dividend reinvestment plans and similar plans) or any
successor forms thereto, (ii) a registration statement filed in
connection with an exchange offer or an offering of securities solely to
existing stockholders or employees of the Company, (iii) a registration
statement filed in connection with an offering by the Company of
securities convertible into or exchangeable for Common Stock, and (iv) a
registration statement filed in connection with a private placement of
securities of the Company (whether for cash or in connection with an
acquisition by the Company or one of its subsidiaries).
(d) If the lead managing underwriter selected by the Company for
an underwritten offering for which Piggy-Back Rights are requested
determines that marketing or other factors require a limitation on the
number of shares of Common Stock to be offered and sold in such
offering, then (i) such underwriter shall provide written notice thereof
to each of the Company and the Selling Shareholders, and (ii) there
shall be included in the offering, first, all shares of Common Stock
proposed by the Company to be sold for its account (or such lesser
amount as shall equal the maximum number determined by the lead managing
underwriter as aforesaid) and, second, only that number of Registerable
Shares requested to be included in the Registration Statement by the
Selling Shareholder that such lead managing underwriter reasonably and
in good faith believes will not substantially interfere with (including,
without limitation, adversely affect the pricing of) the offering of all
the shares of Common Stock that the Company desires to sell for its own
account.
(e) Nothing contained in this Term Sheet shall create any
liability on the part of the Company to the Selling Shareholder if the
Company for any reason should decide not to file a Registration
Statement for which Piggy-Back Rights are available or to withdraw such
Registration Statement subsequent to its filing, regardless of any
action whatsoever that the Selling Shareholder may have taken, whether
as a result of the issuance by the Company of any notice hereunder or
otherwise.
(f) As a condition to providing Piggy-Back Rights, the Company
will require each Selling Shareholder to furnish to the Company in
writing such information regarding the proposed distribution by such
Selling Shareholder as the Company may from time to time reasonably
request and to comply with reasonable terms and conditions of the
Registration Statement as established by the Company.
(g) Except as set forth below, the Company shall bear all expenses
of the Registration Statement. Each Selling Shareholder will be
individually responsible for payment of his own legal fees (if the
Selling Shareholder retains legal counsel separate from that of the
Company), underwriting fees and brokerage discounts, commissions and
other sales expenses incident to any registration of the Registerable
Shares to be sold by the Selling Shareholder.
(h) The Company will keep the Registration Statement effective at
least until the earlier of: (i) such time as all of the Shares included
in the Registration Statement have been disposed of pursuant to and in
accordance with the Registration Statement; (ii) such time as all of the
Registerable Shares included in the Registration Statement may be sold
to the public without registration or restriction pursuant to Rule 144
of the Securities Act, or (iii) December 31, 2007.
