EXHIBIT 4.14 & 10.15
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into this 8th day of November 2001, by and between PayStar Corporation, a
Nevada corporation (the "Company"), and Intermountain Marketing Associates,
LLC, a Utah limited liability company (the "Shareholder").
RECITALS:
WHEREAS, the Shareholder concurrently with the execution of this
Agreement is acquiring shares of the Company's common stock (the "Common
Stock") in connection with the Stock Purchase and Debt Settlement Agreement of
even date herewith (the "Stock Purchase and Debt Settlement Agreement"); and
WHEREAS, as a condition to such acquisition, the parties are willing to
enter into the agreements contained herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and intending to be legally bound hereby, the parties hereto agree as follows:
1. Definitions
"Affiliate" means, with respect to any Person, any other Person
which, directly or indirectly, controls, is controlled by or is under common
control with such Person.
"Agreement" is defined in the Preamble to this Agreement.
"Common Stock" is defined in the Recitals to this Agreement.
"Company" is defined in the Preamble to this Agreement.
"Holder" means the Shareholder or any transferee of the Shareholder.
"Person" means an individual, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and government or any
department or agency thereof.
"Registerable Securities" means (i) 500,000 of the Common Stock
issued to the Shareholder pursuant to the Stock Purchase and Debt Settlement
Agreement, and (ii) any securities issued or issuable with respect to the
Common Stock referred to in clause (i) by way of replacement, share dividend,
share split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization.
"Registration Expenses" is defined in Section 4.1 hereof.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar federal law then in force.
"Shareholder" is defined in the Preamble to this Agreement.
2. Piggyback Registration Rights
2.1 Right to Piggyback. If the Company proposes to undertake an
offering of shares of Common Stock for its account or for the account of other
stockholders and the registration form to be used for such offering may be
used for the registration of Registerable Securities (a "Piggyback
Registration"), each such time the Company will give prompt written notice to
all Holders of Registerable Securities of its intention to effect such a
registration (each, a "Piggyback Notice") and, subject to Sections 2.3 and 2.4
hereof, the Company will use its best efforts to cause to be included in such
registration all Registerable Securities with respect to which the Company has
received written requests for inclusion therein within 20 days after the date
of sending the Piggyback Notice.
2.2 Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company in writing that in their
opinion the number of securities requested to be included in such registration
exceeds the number that can be sold in an orderly manner within a price range
acceptable to the Company, the Company will include in such registration (a)
first, the securities the Company proposes to sell and (b) second, the
Registerable Securities requested to be included in such registration and any
other securities requested to be included in such registration that are held
by Persons other than the Holders of Registerable Securities pursuant to
registration rights, pro rata among the holders of Registerable Securities and
the holders of such other securities requesting such registration on the basis
of the number of shares of such securities owned by each such holder.
2.3 Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of holders of
the Company's securities other than the Holders of Registerable Securities
(the "Other Holders"), and the managing underwriters advise the Company in
writing that in their opinion the number of securities requested to be
included in such registration exceeds the number that can be sold in a orderly
manner in such offering within a price range acceptable to the Other Holders
requesting such registration, the Company will include in such registration
(a) first, the securities requested to be included therein by the Other
Holders requesting such registration and (b) second, the Registerable
Securities requested be include in such resignation hereunder, pro rata amount
the Holders of Registerable Securities requesting such registration on the
basis of the number of shares of such securities owned by each such Holder.
2.4 Selection of Underwriters. In the case of an underwritten
Piggyback Registration, the Company will have the right to select the
investment banker(s) and managers(s) to administer the offering.
3. Registration Procedures.
3.1 Registration. The Company will use its reasonable best
efforts to effect the registration of such Registerable Securities in
accordance with the intended method of disposition thereof, and pursuant
thereto the Company will as expeditiously as possible:
3.1.1 Registration Statement. Prepare and file with the
SEC a registration statement with respect to such Registerable Securities and
use its reasonable best efforts to cause such registration statement to become
effective.
3.1.2 Amendments and Supplements. Promptly prepare and
file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection therewith as may be necessary
to keep such registration statement effective for the period required by the
intended method of disposition and the terms of this Agreement and comply with
the provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers thereof set
forth in such registration statement.
3.1.3 Provisions of Copies. Promptly furnished to each
seller of Registerable Securities the number of copies of such registration
statement, each amendment and supplement thereto, the prospectus included in
such registration statement (including each preliminary prospectus) and such
other documents as such seller may reasonably request in order to facilitate
the disposition of the Registerable Securities owned by such seller.
3.1.4 Blue Sky Laws. Use its reasonable best efforts to
register or qualify such Registerable Securities under the securities or blue
sky laws of such jurisdictions as any seller reasonably requests and do any
and all other acts and things which may be reasonably necessary or advisable
to enable such seller to consummate the disposition in such jurisdictions of
the Registerable Securities owned by such seller, provided, that the Company
will not be required to (a) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3.1.4; (b) subject itself to taxation in any such jurisdiction; or (c)
consent to general service of process in any such jurisdiction.
3.1.5 Anti-fraud Rules. Promptly notify each seller of
such Registerable Securities when a prospectus relating thereto is required to
be delivered under Securities Act, of the happening of any event as a result
of which the prospectus included in such registration statement contains an
untrue statement of a material fact or omits any material fact necessary to
make the statements therein not misleading, and in such event, at the request
of any such seller, the Company will promptly prepare a supplement or
amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registerable Securities, such prospectus will not contain
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading, provided, that the
Company will not take any action which causes the prospectus included in such
registration statement to contain an untrue statement of material fact or omit
any material fact necessary to make the statements therein not misleading,
except as permitted by Section 3.5.
3.1.6 Due Diligence. Make available for inspection by any
underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
underwriter, all financial and other records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors,
employees and independent accountants to supply all information reasonably
requested by any such underwriter, attorney, accountant or agent in connection
with such registration statement.
3.1.7 Deemed Underwriters or Controlling Persons. Permit
any Holder of Registerable Securities which Holder, in such Holder's
reasonable judgment, might be deemed to be an underwriter or a controlling
person of the Company, to participate in the preparation of such registration
or comparable statement and to require the insertion therein of material in
form and substance satisfactory to such Holder and to the Company and
furnished to the Company in writing, which in the reasonable judgment of such
Holder and its counsel should be included.
3.1.8 Management Availability. In connection with
underwritten offerings, make available appropriate management personnel for
participation in the preparation and drafting of such registration comparable
statement, for due diligence meetings and for "road show" meetings.
3.1.9 Stop Orders. Promptly notify Holders of the
Registerable Securities of the threat of issuance by the SEC of any stop order
suspending the effectiveness of the registration statement or the initiation
of any proceeding for that purpose, and make every reasonable effort to
prevent the entry of any order suspending the effectiveness of the
registration statement. In the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any Registerable Securities included in such registration
statement for sale in any jurisdiction, the Company will use its reasonable
best efforts promptly to obtain the withdrawal of such order.
3.2 Further Information. The Company may require each Holder of
Registerable Securities to furnish to the Company in writing such information
regarding the proposed distribution by such Holder of such Registerable
Securities as the Company may from time to time reasonably request.
3.3 Notice to Suspend Offers and Sales. Each Holder severally
agrees that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Sections 3.1.5 or 3.1.9 hereof, such
Investor will forthwith discontinue disposition of shares of Common Stock
pursuant to a registration hereunder until receipt of the copies of an
appropriate supplement or amendment to the prospectus under Section 3.1.5 or
until the withdrawal of such order under Section 3.1.9.
3.4 Reference to Holders. If any such registration or
comparable statement refers to any Holder by name or otherwise as the holder
of any securities of the Company and if, in the Holder's reasonable judgement,
such Holder is or might be deemed to be a controlling person of the Company,
such Holder shall have the right to require (a) the insertion therein of
language in form and substance satisfactory to such Holder and the Company and
presented to the Company in writing, to the effect that the holding by such
Holder of such securities is not to be construed as a recommendation by such
Holder of the investment quality of the Company's securities covered thereby
and that such holdings does not imply that such Holder will assist in meeting
any future financial requirements of the Company, or (b) in the event that
such reference to such Holder by name or otherwise is not required by the
Securities Act or any similar Federal statute then in force, the deletion of
the reference to such Holder, provided that with respect to this clause (b)
such Holder shall furnish to the Company an opinion of counsel to such effect,
which opinion and counsel shall be reasonably satisfactory to the Company.
4. Registration Expenses.
4.1 Expense Borne by Company. Except as specifically otherwise
provided in Section 4.2 hereof, the Company will be responsible for payment of
all expenses incident to any registration hereunder, including, without
limitation, all registration and filing fees, fees and expenses of compliance
with securities or blue sky laws, printing expenses, messenger and delivery
expenses, road show expenses, advertising expenses and fees and disbursements of
counsel for the Company and all independent certified public accountants and
other Persons retained by the Company in connection with such registration
(all such expenses borne by the Company being herein called the "Registration
Expenses").
4.2 Expense Borne by Selling Security Holders. The selling
security holders will be responsible for payment of their own legal fees (if
they retain legal counsel separate from that of the Company), underwriting
fees and brokerage discounts, commissions and other sales expenses incident to
any registration hereunder, with any such expenses which are common to the
selling security holders divided among such security holders (including the
Company and holders of the Company's securities other than Registerable
Securities, to the extent that securities are being registered on behalf of
such Persons) pro rata on the basis of the number of shares being registered
on behalf of each such security holder, or as such security holders may
otherwise agree.
5. Indemnification Section.
5.1 Indemnification by Company. The Company agrees to
indemnify, to the fullest extent permitted by law, each Holder of Registerable
Securities and each Person who controls (within the meaning of the Securities
Act) such Holder against all loses, claims, damages, liabilities and expenses
in connection with defending against any such losses, claims, damages and
liabilities or in connection with any investigation or inquiry, in each case
caused by or based on any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary prospectus
or any amendment thereof or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading or arise out of any violation by the
Company of any rules or regulation promulgated under the Securities Act
applicable to the Company and relating to action or inaction required of the
Company in connection with such registration, except insofar as the same are
(i) contained in any information furnished in writing to the Company by such
Holder expressly for use therein; (ii) caused by such Holder's failure to
deliver a copy of the registration statement or prospectus or any amendments
or supplements thereto; or (iii) caused by such Holder's failure to
discontinue disposition of shares after receiving notice from the Company
pursuant to Section 3.3 hereof. In connection with an underwritten offering,
the Company will indemnify such underwriters, their officers and directors and
each Person who controls (within the meaning of the Securities Act) such
underwriters at least to the same extent as provided above with respect to the
indemnification of the Holders of Registerable Securities.
5.2 Indemnification by Holder. In connection with any
registration statement in which a Holder of Registerable Securities is
participating, each such Holder will furnish to the Company in writing such
information as the Company reasonably requests for use in connection with any
such registration statement or prospectus and, to the extent permitted by law,
will indemnify the Company, its directors and officers and each Person who
controls (within the meaning of the Securities Act) the Company against any
losses, claims, damages, liabilities and expenses resulting from any untrue or
alleged untrue statement of material fact contained in the registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or omission is
contained in any information so furnished in writing by such Holder expressly
for use in connection with such registration; provided that the obligation to
indemnify will be individual to each Holder and will be limited to the net
amount of proceeds received by such Holder from the sale of Registerable
Securities pursuant to such registration statement. In connection with an
underwritten offering, each such Holder will indemnify such underwriters,
their officers and directors and each Person who controls (within the meaning
of the Securities Act) such underwriters at least to the same extent as
provided above with respect to the indemnification of the Company.
5.3 Assumption of Defense by Indemnifying Party. Any Person
entitled to indemnification hereunder will (a) give prompt written notice to
the indemnifying party of any claim with respect to which it seeks
indemnification and (b) unless in such indemnified party's reasonable judgment
a conflict of interest between such indemnified and indemnifying parties may
exist with respect to such claim, permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the indemnified
party. If such defense is assumed, the indemnifying party will not be subject
to any liability for any settlement made by the indemnified party without its
consent (but such consent will not be unreasonably withheld). An indemnifying
party who is not entitled to, or elects not to, assume the defense of a claim
will not be obligated to pay the fees and expenses of more than one counsel
for all parties indemnified by such indemnifying party with respect to such
claim. unless in the reasonable judgment of any indemnified party a conflict
of interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
5.4 Binding Effect. The indemnification provided for under this
Agreement will remain in full force and effect regardless of any investigation
made by or on behalf of the indemnified party or any officer, director or
controlling Person of such indemnified party and will survive the transfer of
securities. The Company also agrees to make such provisions, as are reasonably
requested by any indemnified party, for contribution to such party in the
event the Company's indemnification is unavailable for any reason. Each Holder
or Registerable Securities also agrees to make such provisions, as are
reasonably requested by any indemnified party, for contribution to such party
in the event such Holder's indemnification is unavailable for any reason.
6. Repurchase Obligation. Notwithstanding any other provisions in
this Agreement to the contrary, if for any reason a registration statement
which includes the Registerable Securities is not declared effective on or
before January 31, 2002, persons holding a majority of the Registerable
Securities may, upon 30-days' prior written notice, require the Company to
withdraw the registration statement. Following such withdrawal of the
registration statement, any Holder of Registerable Securities may require the
Company to repurchase such Registerable Securities. The repurchase price per
share shall be equal to the average daily closing price of the Common Stock
from the date of this Agreement until January 31, 2002.
7. Miscellaneous.
7.1 Notices. All communications provided for herein shall be in writing
and shall be deemed to be given or made when served personally or when
deposited in the United States mail, certified return receipt requested,
addressed as follows, or at such other address as shall be designated by any
party hereto in written notice to the other party hereto delivered pursuant to
this subsection:
Shareholder: 000 Xxxxx 0xx Xxxxxx
Xxxxx x'Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
Company: Xxxxx X. Xxxxxx, CFO
0000 Xxxx Xxxxxxxxx Xxxx Xxxxx 00
Xxxx, XX 00000
with copy to: Xxxxxx X. Xxxxx
Attorney at Law
00 Xxxx 000 Xxxxx Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
7.1 Default. Should any party to this Agreement default in any of the
covenants, conditions, or promises contained herein, the defaulting party
shall pay all costs and expenses, including a reasonable attorney's fee, which
may arise or accrue from enforcing this Agreement, or in pursuing any remedy
provided hereunder or by statute.
7.2 Assignment. This Agreement may not be assigned in whole or in part by
the parties hereto without the prior written consent of the other party or
parties, which consent shall not be unreasonably withheld.
7.3 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their heirs, executors,
administrators, successors and assigns.
7.4 Partial Invalidity. If any term, covenant, condition, or provision of
this Agreement or the application thereof to any person or circumstance shall
to any extent be invalid or unenforceable, the remainder of this Agreement or
application of such term or provision to persons or circumstances other than
those as to which it is held to be invalid or unenforceable shall not be
affected thereby and each term, covenant, condition, or provision of this
Agreement shall be valid and shall be enforceable to the fullest extent
permitted by law.
7.5 Entire Agreement. This Agreement constitutes the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersedes all negotiations, representations, prior discussions, and
preliminary agreements between the parties hereto relating to the subject
matter of this Agreement.
7.7 Interpretation of Agreement. This Agreement shall be interpreted and
construed as if equally drafted by all parties hereto.
7.8 Survival of Covenants, Etc. All covenants, representations, and
warranties made herein to any party, or in any statement or document delivered
to any party hereto, shall survive the making of this Agreement and shall
remain in full force and effect until the obligations of such party hereunder
have been fully satisfied.
7.9 Further Action. The parties hereto agree to execute and deliver such
additional documents and to take such other and further action as may be
required to carry out fully the transactions contemplated herein.
7.10 Amendment. This Agreement or any provision hereof may not be
changed, waived, terminated, or discharged except by means of a written
supplemental instrument signed by the party or parties against whom
enforcement of the change, waiver, termination, or discharge is sought.
7.61 Full Knowledge. By their signatures, the parties acknowledge that
they have carefully read and fully understand the terms and conditions of this
Agreement, that each party has had the benefit of counsel, or has been advised
to obtain counsel, and that each party has freely agreed to be bound by the
terms and conditions of this Agreement.
7.72 Headings. The descriptive headings of the various sections or parts
of this Agreement are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
7.83 Counterparts. This Agreement may be executed in two or more
partially or fully executed counterparts, each of which shall be deemed an
original and shall bind the signatory, but all of which together shall
constitute but one and the same instrument.
7.14 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without regard to
conflict of law principles and will be binding upon and shall inure to the
benefit of the Parties and the Shareholder and their successors and assigns.
7.15 Remedies. 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. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provision of this Agreement and that any party may in its sole discretion
apply to any court of law or equity of competent jurisdiction (without posting
any bond or other security) for specific performance and for other injunctive
relief in order to enforce or prevent violation of the provisions of this
Agreement.
7.16 Term. Except for the provisions of Section 6 or as
specifically other-wise provided herein, the provisions of this Agreement
shall apply until such time as all Registerable Securities have ceased to be
Registerable Securities hereunder but in no event later than two years from
the date of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
THE COMPANY: PayStar Corporation
By
/s/ Xxxxxxx X. Xxxxx, Chairman
THE SHAREHOLDER: Intermountain Marketing Associates, LLC
By
/s/ Xxxxxx Xxxxxx, Managing Member
