EXHIBIT 10.3
EXECUTION COPY
PIGGYBACK REGISTRATION RIGHTS AGREEMENT
THIS PIGGYBACK REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made
as of September ___, 2004 by and between INTERNATIONAL CARD ESTABLISHMENT, INC.,
a Delaware corporation ("ICE"), and the holders of capital stock of NEOS
MERCHANT SOLUTIONS, INC., a Delaware corporation ("NEOS"), listed on SCHEDULE A
attached hereto (the "STOCKHOLDERS").
WHEREAS, pursuant to the terms of that certain Agreement and Plan of
Merger (the "MERGER AGREEMENT"), dated as of the ___ day of September, 2004 by
and among ICE, ICE Sub Inc., a Nevada corporation and wholly owned subsidiary of
ICE ("ICE SUB") and NEOS, ICE is acquiring all of the outstanding shares of NEOS
by way of the merger of NEOS with and into ICE Sub, with ICE Sub as the
surviving entity (the "MERGER"), and the Stockholders will receive, pursuant to
the Merger, shares of ICE common stock and securities which are convertible into
ICE common stock (together, the "SHARES"), $0.0005 par value per share ("COMMON
STOCK"); and
WHEREAS, in connection with the issuance of the Shares in the Merger,
ICE and the Stockholders desire to provide for the rights of the Stockholders
with respect to the registration of the Shares according to the terms of this
Agreement.
NOW THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. DEFINITIONS.
(a) The term "COMMISSION" means the Securities and Exchange Commission or
any other federal agency at the time administering the Securities Act.
(b) The term "STOCKHOLDER" means any person owning or having the right to
acquire Registrable Securities.
(c) The terms "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, and the declaration or
ordering of effectiveness of such registration statement or document.
(d) The term "REGISTRABLE SECURITIES" means (i) the Shares and (ii) Common
Stock issued as a dividend or other distribution with respect to, or in exchange
for or in replacement of, the Shares, excluding in all cases, however, any
Registrable Securities sold by a person in a transaction in which such person's
registration rights are not assigned; provided, however, that any shares
previously sold to the public pursuant to a registered public offering or
pursuant to Rule 144 under the Securities Act shall cease to be Registrable
Securities.
(e) The term "SECURITIES ACT" means the Securities Act of 1933, as amended,
or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
2. PIGGYBACK REGISTRATION.
If (but without any obligation to do so) prior to the termination of ICE's
obligations hereunder as set forth in Section 7 hereof, ICE proposes to register
(including for this purpose a registration effected by ICE for stockholders) any
of its Common Stock held under the Securities Act in connection with a firmly
underwritten public offering which includes (i) any Common Stock held by an
director or officer or (ii) any Common Stock held by a stockholder of ICE who
received such shares of Common Stock in connection with ICE's acquisition of
assets, capital stock or voting power of another corporation, through merger,
consolidation or otherwise, ICE shall, at such time, promptly give each
Stockholder written notice of such registration. Upon the written request of the
Stockholder given within 20 days after mailing of such notice by ICE in
accordance with Section 8(b) of this Agreement, ICE shall, subject to the
provisions of Section 5 hereof, cause to be registered under the Securities Act
all of the Registrable Securities that each such Stockholder has requested to be
registered. In connection with any offering involving an underwriting of shares
of Common Stock, ICE shall not be required under this Section 2 to include any
of the Stockholders' Registrable Securities in such underwriting unless such
Stockholder accepts the terms of the underwriting as agreed upon between ICE and
the underwriters selected by it, and then only in such quantity as will not, in
the good faith opinion of the underwriters, jeopardize the success of the
offering by ICE. If the total amount of securities, including Registrable
Securities, requested by stockholders to be included in such offering exceeds
the amount of securities sold other than by ICE that the underwriters reasonably
believe compatible with the success of the offering, then ICE shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters believe will not jeopardize the
success of the offering. Subject to any contractual rights of other selling
stockholders, the securities so included shall be apportioned pro rata among the
selling stockholders according to the total amount of securities entitled to be
included therein owned by each selling stockholder or in such other proportions
as shall mutually be agreed to by such selling stockholders, but in no event
shall any shares being sold by a stockholder exercising a demand registration
right be excluded from such offering. For purposes of the preceding sentence
concerning apportionment, for any selling stockholder that is a Stockholder of
Registrable Securities and that is a partnership or corporation, the partners,
retired partners and stockholders of such Stockholder, or the estates and family
members of any such partners and retired partners and any trusts for the benefit
of any of the foregoing persons shall be deemed to be a single "selling
stockholder," and any pro rata reduction with respect to such "selling
stockholder" shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
"selling stockholder," as defined in this sentence.
3. OBLIGATIONS OF ICE.
Whenever required under this Agreement to effect the registration of any
Registrable Securities, ICE shall, as expeditiously as reasonably possible, as
applicable:
(a) Use reasonable efforts to cause any registration statement with respect
to which such Registrable Securities may be included to become effective.
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(b) Prepare and file with the Commission 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 Securities Act
with respect to the disposition of all securities covered by such registration
statement.
(c) Furnish to the Stockholders covered by such registration statement such
numbers of 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 such
Registrable Securities.
(d) Use reasonable 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 the Stockholders thereof,
provided that ICE 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.
(e) Notify each Stockholder covered by such registration statement at any
time when a prospectus relating thereto is required to be delivered under the
Securities Act of the happening of any event as a result of which the prospectus
included 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 the
light of the circumstances then existing.
4. PROVISION OF INFORMATION.
It shall be a condition precedent to the obligations of ICE to take any
action pursuant to this Agreement that the Stockholders shall furnish to ICE
such information regarding themselves, the Registrable Securities held by them,
and the intended method of disposition of such securities as shall be reasonably
required to effect the registration of the Registrable Securities.
5. EXPENSES.
ICE shall bear and pay all expenses incurred by ICE in connection with any
registration, filing or qualification of Registrable Securities with respect to
the registrations pursuant to Section 2 hereof for each Stockholder thereof,
including (without limitation) all registration, filing and qualification fees,
printers' and accounting fees relating or apportionable thereto, fees and
disbursements of counsel for ICE, blue sky fees and expenses, including fees and
disbursements of counsel related to all blue sky matters, the expenses of
providing materials pursuant to Section 3(b) hereof, but excluding all
underwriting discounts and commissions relating to Registrable Securities, which
shall be borne by the Stockholders.
6. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights of any Stockholder pursuant to this Agreement may not be
assigned.
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7. TERMINATION OF REGISTRATION RIGHTS.
ICE's obligations pursuant to this Agreement shall terminate as to any
Stockholder of Registrable Securities on the earlier to occur of (a) the first
(1st) anniversary of the date of issuance of the Shares under the Merger
Agreement and (b) such time when all Registrable Securities held by the
Stockholder may be sold pursuant to Rule 144 under the Securities Act during any
three-month period.
8. MISCELLANEOUS.
(a) SUCCESSORS AND ASSIGNS. Except as otherwise provided herein, the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties. Nothing in this
Agreement, express or implied, is intended to confer upon any party other than
the parties hereto or their respective successors and assigns any rights,
remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
(b) NOTICES. Unless otherwise provided, any notice, request, demand or
other communication required or permitted under this Agreement shall be given in
writing and shall be deemed effectively given upon personal delivery to the
party to be notified, or when sent by telecopier (with receipt confirmed and
promptly confirmed by personal delivery, U.S. first-class mail or carrier), or
overnight courier service, or upon deposit with the United States Post Office,
by registered or certified mail, postage prepaid and addressed as follows (or at
such other address as a party may designate by notice to the other):
If to ICE:
International Card Establishment, Inc.
000 Xxxxxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
If to the Stockholders:
To the address and/or telecopier listed on SCHEDULE A attached
hereto.
(c) WAIVERS. The observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the party against whom such
waiver is sought to be enforced. No waiver by either party of any default with
respect to any provision, condition or requirement hereof shall be deemed to be
a continuing waiver in the future thereof or a waiver of any other provision,
condition or requirement hereof; nor shall any delay or omission of either party
to exercise any right hereunder in any manner impair the exercise of any such
right accruing to it thereafter.
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(d) SEVERABILITY. If one or more provisions of this Agreement are held to
be unenforceable, invalid or void by a court of competent jurisdiction, such
provision shall be excluded from this Agreement and the balance of this
Agreement shall be interpreted as if such provision were so excluded and shall
be enforceable in accordance with its terms.
(e) ENTIRE AGREEMENT; AMENDMENTS.
(i) Except as otherwise provided herein or in the Merger Agreement,
this Agreement contains the entire understanding of the parties with
respect to the matters covered herein and supersedes all prior agreements
and understandings, written or oral, between the parties relating to the
subject matter hereof.
(ii) Any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with
the written consent of ICE and the holders of a majority of the Registrable
Securities then outstanding. Any amendment or waiver effected in accordance
with this paragraph shall be binding upon each holder of any Registrable
Securities then outstanding, each future holder of all such Registrable
Securities, and ICE.
(f) GOVERNING LAW. This Agreement shall be governed by and construed under
the laws of the State of California (irrespective of its choice of law
principles).
(g) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(h) TITLES AND SUBTITLES. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement. Any reference in this Agreement to a statutory
provision or rule or regulation promulgated thereunder shall be deemed to
include any similar successor statutory provision or rule or regulation
promulgated thereunder.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
INTERNATIONAL CARD ESTABLISHMENT, INC.
By_________________________________________
Name_______________________________________
Title______________________________________
HOLDER
By_________________________________________
Name_______________________________________
Title______________________________________
SCHEDULE A
NAME ADDRESS CITY, STATE ZIP
Xxxxxx Viscount III
Xxxx Xxxx Xxxxx
Xxxxxxx A.P. Xxxxxxxxxxxx
Xxxxxx Viscount
Pardiss, LLC
Xxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxxxx
Will Xxxxxxxxx
Xxxxxx Xxx
Xxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx
Xxx XxXxxx
Xxxx Xxxxxxx
Xxxxx Xxxxxxxxx and
Xxxxxx X. Xxxxxxx JTWROS
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