EX-2.2
REGISTRATION RIGHTS AGREEMENT
FREESTAR TECHNOLOGY CORPORATION
Calle Fantino Falco, X.X. Xxxx Xxxxxxxx, 0xx Xxxxx
Xxxxx Xxxxxxx, Xxxxxxxxx Xxxxxxxx
As of May 4, 2004
UniComp, Inc.
0000 Xxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxx 00000
Re: Registration Rights Agreement
Gentlemen:
Reference is made to the Asset Purchase Agreement, dated as
of May 4, 2004, by and among FreeStar Technology Corporation, a
Nevada corporation (the "Buyer"), UniPay, Inc., a North Carolina
corporation (the "Seller"), and UniComp, Inc., a Colorado corporation
(the "Stockholder") (the "Purchase Agreement"), pursuant to which the
Seller has agreed to sell all of its payment processing assets and
properties, all of which are located at Seller's facility in Murphy,
North Carolina, to the Buyer in partial consideration for shares of
common stock of the Buyer ("Buyer Stock"). Stockholder is the sole
shareholder of Seller. All capitalized terms not defined herein
shall have the meaning ascribed to them in the Purchase Agreement.
(a) On or before June 1, 2004, the Buyer shall cause a Form SB-
2 shelf registration statement (the "Registration Statement") to be
filed with the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the shares of Buyer Stock to be
issued to the Stockholder at the Closing pursuant to Section
3.1(a)(ii) of the Purchase Agreement, and shall thereafter use its
best efforts to have the Registration Statement declared effective
and to keep it effective until the earlier of (i) the date on which
all of the shares of Buyer Stock has been sold by the Seller and (ii)
the date which is two years after the date of issuance of the Buyer
Stock or such earlier date when all shares of the Buyer Stock has
been sold or may be sold without volume restrictions pursuant to Rule
144(i) as determined by counsel to the Buyer pursuant to a written
opinion letter to such effect acceptable to the Buyer's transfer
agent (the "Effectiveness Period"). The Buyer shall use its best
efforts to have the Registration Statement declared effective within
90 days following the Closing. Buyer shall also prepare and file
with the Commission such amendments, including post-effective
amendments, to the Registration Statement as may be necessary to keep
the Registration Statement effective during the Effectiveness Period.
(b) Until the Registration Statement has become effective under
the Securities Act, each certificate representing the shares of Buyer
Stock issued at the Closing and all certificates and instruments
issued in transfer thereof, shall be endorsed with the following
restrictive legend:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND HAVE BEEN
TAKEN FOR INVESTMENT PURPOSES ONLY AND NOT WITH A VIEW TO
THE DISTRIBUTION THEREOF, AND NEITHER SUCH SHARES NOR ANY
INTEREST THEREIN MAY BE SOLD, TRANSFERRED, ASSIGNED OR
PLEDGED EXCEPT IF REGISTERED UNDER APPLICABLE STATE BLUE
SKY OR SECURITIES LAWS OR ANY EXEMPTIONS FROM SUCH
REGISTRATION OR QUALIFICATION REQUIREMENTS ARE AVAILABLE,
ALL IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN
THE REGISTERED HOLDER HEREOF AND THE ISSUER OF SUCH SHARES."
Upon the effectiveness of the Registration Statement, the Buyer
shall, upon the request of the Stockholder, issue to the Stockholder
a replacement certificate without such legend in exchange for any
such legended certificate.
(c) The Buyer shall furnish to the Stockholder, at the Buyer's
expense, such number of copies of the Registration Statement and each
amendment and supplement thereto, preliminary prospectus, final
prospectus and such other documents as the Stockholder may reasonably
request in order to facilitate the public offering of its shares of
Buyer Stock.
(d) The Buyer shall promptly, at the Buyer's expense, use its
reasonable best efforts to register or qualify any shares of Buyer
Stock covered by the Registration Statement under such state
securities or blue sky laws of such jurisdictions as the Stockholder
may reasonably request, except that the Buyer shall not for any
purpose be required to execute a general consent to service of
process or to qualify to do business as a foreign corporation in any
jurisdiction where it is not so qualified.
(e) The Buyer shall notify the Stockholder, promptly after it
shall receive notice thereof, of the date and time when the
Registration Statement and each post-effective amendment thereto has
become effective or a supplement to any prospectus forming a part of
the Registration Statement has been filed.
(f) The Buyer shall advise the Stockholder, promptly after it
shall receive notice or obtain knowledge thereof, of the issuance of
any stop order by the Commission suspending the effectiveness of the
Registration Statement or the initiation or threatening of any
proceeding for the purpose of obtaining a stop order and promptly use
its best efforts to prevent the issuance of any stop order or to
obtain its withdrawal if such stop order should be issued.
(g) (i) The Buyer agrees to bear all Commission registration
and filing fees, printing and mailing expenses, fees and
disbursements of counsel and accountants for the Buyer and all
expenses and fees incident to an application for listing the shares
of Buyer Stock on the OTC Bulletin Board and (ii) the Stockholder
agrees to bear all fees and disbursements of counsel for all
underwriters, brokers and dealers engaged in connection with the
distribution of such shares of Buyer Stock and any discounts,
commissions and fees of any such underwriters, brokers and dealers,
NASD filing fees and expenses incurred by any person in connection
therewith.
(h) (i) The Buyer hereby agrees to indemnify and hold harmless
the Seller and the Stockholder, and each of their officers,
directors, legal counsel and accountants and each person who controls
the Seller or the Stockholder within the meaning of the Securities
Act, from and against, and agrees to reimburse the Stockholder, its
officers, directors, legal counsel and accountants and controlling
persons with respect to, any and all claims, actions (actual or
threatened), demands, losses, damages, liabilities, costs and
expenses (joint or several) (including the fees and expenses of
counsel in connection with any lawsuit or any governmental or
regulatory investigation or proceeding) to which the Stockholder may
become subject under the Securities Act or otherwise, insofar as such
claims, actions, demands, losses, damages, liabilities, costs or
expenses are caused by any untrue statement or alleged untrue
statement of any material fact contained in the Registration
Statement, any prospectus contained therein, or any amendment or
supplement thereto, or are caused by the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading or which
arise out of any violation or alleged violation by the Buyer of the
Securities Act, the Securities Exchange Act of 1934, as amended, any
state securities laws or any rule or regulation promulgated under any
of the foregoing; provided, however, that the Buyer shall not be
liable in any such case to the extent that any such claim, action,
demand, loss, damage, liability, cost or expense is caused by an
untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished in writing
by the Seller or the Stockholder specifically for use in the
preparation thereof; provided further, however, that this indemnity
agreement is subject to the condition that insofar as it relates to
any untrue statement, alleged untrue statement, omission or alleged
omission made in a preliminary prospectus but eliminated or remedied
in the final prospectus, such indemnity shall not inure to the
benefit of the Seller or the Stockholder if a copy of the final
prospectus was not furnished to the person asserting the claim,
action, demand, loss, damage or liability.
(ii) The Stockholder and the Seller hereby agree to
indemnify and hold harmless the Buyer, its officers, directors, legal
counsel and accountants and each person who controls the Buyer within
the meaning of the Securities Act, from and against, and agree to
reimburse the Buyer, its officers, directors, legal counsel,
accountants and controlling persons with respect to, any and all
claims, actions, demands, losses, damages, liabilities, costs or
expenses to which the Buyer, its officers, directors, legal counsel,
accountants or such controlling persons may become subject under the
Securities Act or otherwise, insofar as such claims, actions,
demands, losses, damages, liabilities, costs or expenses are caused
by any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, any prospectus contained
therein or any amendment or supplement thereto, or are caused by the
omission or the alleged omission to state therein a material required
to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading,
in each case to the extent, but only to the extent that such untrue
statement or alleged untrue statement or omission or alleged omission
was so made in reliance upon and in conformity with information
furnished in writing by the Seller or the Stockholder for use in the
preparation thereof.
(iii) If any claim shall be asserted or proceeding
brought against any person (an "Indemnified Person") for which such
person intends to seek indemnification pursuant to Section (b)(i) or
(ii), as the case may be, such Indemnified Person shall give prompt
written notice to the person against whom such indemnity may be
sought (the "Indemnifying Party"), of the nature of such claim, but
the failure to give such notice shall not relieve the Indemnifying
Party of their obligations under this Section (h) unless it or they
have been prejudiced substantially thereby. The Indemnifying Party
shall have the exclusive right to conduct, at their expense, through
counsel of its or their own choosing, which counsel is approved by
the Indemnified Person (which approval may not be unreasonably
withheld), the defense of any such claim, and may compromise or
settle such claims with the prior consent of the Buyer or the
Stockholder (which consent shall not be unreasonably withheld;
provided that it shall not be unreasonable for an Indemnified Party
to reject any settlement proposal which does not include as an
unconditional term thereof the giving to such Indemnified Party of a
release from all liability in respect of such claim or litigation).
(i) In connection herewith, the Stockholder agrees to complete
and execute all questionnaires and other documents reasonably
required, and provide such other information to the Buyer as may be
reasonably necessary, to register the Stockholder's Buyer Stock.
(j) The Buyer hereby confirms that this Agreement has been duly
authorized by its Board of Directors.
(k) The rights to cause the Buyer to register the Buyer Stock
pursuant to this Agreement may be assigned (but only with all related
obligations) by the Stockholder, provided: (i) the Buyer is, within
a reasonable time after such transfer, furnished with written notice
of the name and address of such transferee or assignee and the
securities with respect to which such registration rights are being
assigned; (ii) such transferee or assignee agrees in writing to be
bound by and subject to the terms and conditions of this Agreement,
and (c) such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by
the transferee or assignee is restricted under the Securities Act.
In this Agreement, the term "Stockholder" shall include all such
transferees or assignees of the Buyer Stock.
(l) This Agreement may be executed in one or more counterparts,
each of which when so signed shall be deemed to be an original, and
such counterparts together shall constitute one and the same
instrument.
(m) This Agreement sets forth the entire agreement between the
parties as to the subject matter hereof, supersedes any and all prior
or contemporaneous agreements or understandings of the parties
relating to the subject matter of this Agreement, and may not be
amended except by an instrument in writing signed by all of the
parties to this Agreement.
(n) The laws of the State of New York (without giving effect to
the choice of law provisions thereof) shall govern the interpretation
and enforcement of this Agreement. Any litigation or other
proceedings between the parties concerning this Agreement or the
duties, obligations or actions of either party hereunder shall be
filed in Florida or Georgia.
(o) The headings of the sections and paragraphs of this
Agreement have been inserted for convenience of reference only and do
not constitute a part of this Agreement.
(p) All notices or other communications provided for under this
Agreement shall be in writing, and mailed, telecopied or delivered by
hand delivery or by overnight courier service, to the parties at
their respect addresses as indicated below or at such other address
as the parties may designate in writing:
If to the Company:
UniComp, Inc.
0000 Xxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxx
Chief Executive Officer
with a copy to:
Durham Xxxxx & Xxxxxxx
000 Xxxx Xxxxxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
If to the Holder:
FreeStar Technology Corporation
Calle Fantino Falco, X.X. Xxxx Bldg., 2nd Fl.
Santo Xxxxxxx, Dominican Republic
Attention: Xxxx Xxxx, President & Chief Executive Officer
with a copy to:
Xxxxxxxxx Traurig, LLP
MetLife Building
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
All notices and communications shall be effective as follows: When
mailed, upon receipt; when telecopied, upon confirmed transmission of
the telecopied notice; when hand delivered, upon delivery; and when
sent by overnight courier, upon receipt.
(q) Any person having rights under any provision of this
Agreement will be entitled to enforce such rights specifically, to
recover damages caused by reason of any breach of any provision of
this Agreement and to exercise all other rights granted by law.
(r) Except for the registration rights granted by the Buyer to
Xinhua Finance Network Limited to register the sale of up to ten
million (10,000,000) shares of the Buyer's common stock to be
received upon exercise of a warrant (but not an option) issued by the
Buyer, neither the Buyer nor any of its security holders (other than
the Stockholder in such capacity pursuant hereto) may include
securities of the Buyer in the Registration Statement other than the
Shares, and the Buyer shall not enter into any agreement providing
any such right to any of its security holders.
(s) If, at any time during the Effectiveness Period, there is
not an effective Registration Statement covering all of the Shares
and the Buyer 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 Buyer shall send to the Seller and the Stockholder
written notice of such determination and, if within twenty (20) days
after receipt of such notice, the Seller or the Stockholder or both
of them shall so request in writing, the Buyer shall include in such
registration statement all or any part of the Shares the Seller or
the Stockholder or both of them request to be registered. No right
to registration of the Shares under this Section shall be construed
to limit any registration otherwise required hereunder.
(t) With a view to making available to the Stockholder the
benefits of Rule 144 promulgated under the Securities Act or any
other similar rule or regulation of the SEC that may at any time
permit the Stockholder to sell securities of the Buyer to the public
without Registration ("Rule 144"), until such time as all of the
Shares may be sold without volume limitation pursuant to subsection
(k) of Rule 144, the Buyer agrees to use its reasonable efforts to:
(i) make and keep adequate current public information
available, as those terms are understood and defined in Rule 144(c);
(ii) file with the SEC in a timely manner all reports and
other documents required of the Buyer under the Securities Act and
the Exchange Act; and
(iii) furnish to the Stockholder promptly upon request,
(A) a written statement by the Company that it has complied with the
reporting requirements of the Securities Act and the Exchange Act,
(B) a copy of the most recent annual or quarterly report of the Buyer
and such other reports and documents so filed by the Buyer and (C)
such other information as may be reasonably requested to permit the
Stockholder to sell such securities pursuant to Rule 144 without
Registration.
(iv) at the request of the Stockholder, upon receipt from
the Stockholder of a certificate certifying (A) that the Stockholder
has held the Shares for a period of not less than two (2) years, (ii)
that the Stockholder has not been an affiliate (as defined in Rule
144) of the Buyer for more than the ninety (90) preceding days, and
(iii) as to such other matters as may be appropriate in accordance
with such Rule, remove from the stock certificate representing such
Shares that portion of any restrictive legend which relates to the
registration provisions of the Securities Act; provided, however,
that counsel to the Stockholder may provide such instructions and
opinion to the transfer agent regarding the removal of the
restrictive legend.
If the foregoing is acceptable to you, please sign below where
indicated and return a copy of this letter to the Buyer, whereupon
this letter shall become a binding agreement between us.
FREESTAR TECHNOLOGY CORPORATION
By: /s/ Xxxx Xxxx
Xxxx Xxxx
President & Chief Executive Officer
UNICOMP, INC.
By: /s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
Chief Executive Officer
UNIPAY, INC.
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Chief Executive Officer
