EXHIBIT 4.17 and EXHIBIT 10.25
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement"), entered into
this 11th day of February 2002, is by and between PayStar Corporation, a
Nevada corporation (the "Company"), and Xxxxxxxx Securities Limited (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 conversion of a promissory note dated July
31, 2000, as set forth in the Debt Conversion Agreement of even date
herewith between the Company and the Shareholder (the "Debt Conversion
Agreement"); and
WHEREAS, as a condition to such debt conversion, 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.
"Debt Conversion Agreement" is defined in the Recitals to this
Agreement.
"Holder" means the Shareholder or any transferee of the
Shareholder.
"Piggyback Registration" is defined in Section 2.1 hereof.
"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) the shares of Common Stock
issued to the Shareholder pursuant to the Debt Conversion Agreement which
have not previously been included in a Piggyback Registration, 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 U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"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 the Registerable Securities (a
"Piggyback Registration"), each such time the Company will give prompt
written notice to all registered Holders of Registerable Securities of its
intention to effect such a registration (each, a "Piggyback Notice") and,
subject to Sections 2.2 and 2.3 hereof, the Company will use its best
efforts to cause to be included in such Piggyback 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. If the Holder of the Registerable Securities
shall not respond within such 20-day period, such Person shall be deemed to
have waived the right to include such Registerable Securities in the
Piggyback Registration and this Agreement shall terminate as to such
shares. Registerable Securities shall be included only once in a Piggyback
Registration, regardless of whether such shares are sold thereby.
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. Registerable Securities which are
not included in such a primary registration shall continue to have
piggyback registration rights under this Agreement, unless the Holder of
the Registerable Securities shall have waived his right to include such
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Registerable Securities in the Piggyback Registration by failing to respond
to the Piggyback Notice with the required time as set forth above.
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 to be included in such registration
hereunder, pro rata among the Holders of Registerable Securities requesting
such registration on the basis of the number of shares of such securities
owned by each such Holder. Registerable Securities which are not included
in such an underwritten secondary registration shall continue to have
piggyback registration rights under this Agreement, unless the Holder of
the Registerable Securities shall have waived his right to include such
Registerable Securities in the Piggyback Registration by failing to respond
to the Piggyback Notice with the required time as set forth above.
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.
2.5 Term. Except for the provisions of Section 5, or as
specifically otherwise 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; provided, however, that if the Piggyback
Registration is filed during such period, the Company shall maintain the
effectiveness thereof for the period set forth in subsection 3.1.10, below.
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
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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.
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.
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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.
3.1.10 Duration of the Registration Statement. The
Company shall use its best efforts to continuously maintain the
effectiveness of each registration statement (i) for a period of not less
than 9 months from the original effective date of the registration
statement, (ii) until the shares covered by the registration statement have
been sold under circumstances under which all of the applicable conditions
of Rule 144 (or any similar provision then in force) under the Securities
Act are met, or (iii) until the shares covered by the registration
statement have been otherwise transferred to a Holder who may trade such
shares without restriction under the Securities Act, and the Company has
delivered a new certificate or other evidence of ownership for such
securities not bearing a restrictive legend, whichever event shall first
occur.
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. Each Holder agrees to provide such requested information in
writing to the Company.
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
Holder 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
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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, exchange or market listing
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 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.
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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 suspend 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
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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. Miscellaneous.
6.1 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: Xxxxx 0X
Xxxxxxx Xxxxx
000 Xxxx Xxxxxx
Gibraltar
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
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6.2 Attorneys' Fees. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party or
parties will be entitled to recover reasonable attorneys' fees and other
costs incurred in that action or proceeding, in addition to any other
relief to which it or they may be entitled.
6.3 Rights Are Cumulative. The rights and remedies granted to
the parties hereunder shall be in addition to and cumulative of any other
rights or remedies either may have under any document or documents executed
in connection herewith or available under applicable law. No delay or
failure on the part of a party in the exercise of any power or right shall
operate as a waiver thereof nor as an acquiescence in any default nor shall
any single or partial exercise of any power or right preclude any other or
further exercise thereof or the exercise of any other power or right.
6.4 Governing Law. This Agreement and the rights and duties of
the parties hereto shall be construed and determined in accordance with the
laws of the State of California,and any and all actions to enforce the
provisions of this Agreement, shall be brought in a court of competent
jurisdiction in the State of California and in no other place.
6.5 Successors and Assigns. This Agreement shall be binding
upon the parties and their successors and assigns and shall inure to the
benefit of the other parties and successors and assigns.
6.6 Counterparts. This Agreement may be executed in any number
of counterparts and all such counterparts taken together shall be deemed to
constitute one instrument.
6.7 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.
6.8 Survival of Covenants, Etc. All covenants, representations
and warranties made herein shall survive the making of this Agreement and
shall continue in full force and effect until the obligations of this
Agreement have been fully satisfied.
6.9 Partial Invalidity. If any term of this Agreement shall be
held to be invalid or unenforceable, such term shall be deemed to be
severable and the validity of the other terms of this Agreement shall in no
way be affected thereby.
6.10 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.
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6.11 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.
6.12 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.
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
Xxxxxxx X. Xxxxx, Chairman
THE SHAREHOLDER: Xxxxxxxx Securities Limited
By /s/Xxxxxx X. Xxxxxxx
Its Director
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