EXHIBIT 4.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of October 11, 2000, by and between PayStar Communications
Corporation, a Nevada corporation with offices at 0000 Xxxx Xxxxxxxxx Xxxx,
Xxxxx 00, Xxxx, XX 00000 (the "Company"), and ___________ (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") from Xxxxxxx X. Xxxxx, an officer, director, and principal shareholder
of the Company; 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.
"Other Holders" is defined in Section 3.3 hereof.
"Permitted Transfer" is defined in Section 2.2 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.
"Piggyback Notice" is defined in section 3.1 hereof.
"Piggyback Registration" is defined in Section 3.1 hereof.
"Registerable Securities" means (i) the Common Stock transferred to
the Shareholder pursuant to the agreement between the parties dated October 9,
2000, 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 5.1 hereof.
"Restricted Securities" is defined in Section 2.1 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.
"Transfer" is defined in Section 2.1 hereof.
2. Piggyback Registrations
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. Whenever the Holders of Registerable
Securities have requested that any Registerable Securities be sold pursuant to
this Agreement, the Company will use its reasonable best efforts to effect the
registration and the sale 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 Underwriting Agreement. Enter into such customary agree
ments (including underwriting agreements in customary form) and take all such
other actions as the holders of a majority of the shares of Registerable
Securities being sold or the underwriters, if any, reasonably request in order
to expedite or facilitate the disposition of such Registerable Securities.
3.1.7 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.
3.1.8 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.
3.1.9 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 4.1.9.
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.
3.5 Company's Ability to Postpone. Notwithstanding anything to
the contrary contained herein, the Company shall have the right twice in any
twelve month period to postpone the filing of any registration statement under
Section 3 hereof or any amendment or supplement thereto for a reasonable
period of time (all such postponements not exceeding 90 days in the aggregate
in any twelve month period) if the Company furnishes the Holders of
Registerable Securities a certificate signed by the Chairman of the Board of
Directors or the President of the Company stating that, in its good faith
judgment, the Company's Board of Directors (or the executive committee
thereof) has determined that effecting the registration at such time would
materially and adversely affect a material financing, acquisition, disposition
of assets or stock, merger or other comparable transaction, or would require
the Company to make public disclosure of information the public disclosure of
which would have a material adverse effect upon 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 4.3 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. Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (a) agrees to sell such Person's securities on the basis provided in
any underwriting arrangements approved by the Person or Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.
7. Miscellaneous.
7.1 No Inconsistent Agreements. The Company will not hereafter
enter into any agreement with respect to its securities, which violates the
rights granted to the Holders of Registerable Securities in this Agreement.
7.2 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.
7.3 Term. Except for the provisions of Section 5 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 three years from
the date of this Agreement.
7.4 Amendments and Waivers. Except as otherwise specifically
provided herein., this Agreement may be amended or waived only upon the prior
written consent of the Company and of the Holders of a majority of the then
outstanding shares of Registerable Securities.
7.5 Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto will bind and
inure to the benefit of (i) the respective successors and assigns of the
parties hereto whether so expressed or not and (ii) the persons referred to in
clause (iv) of the definition of Registerable Securities. In addition, the
provisions of this Agreement which are for the benefit of the Shareholder or
Holders of Registerable Securities are also for the benefit of, and
enforceable by, any subsequent holder of such securities so long as such
securities continue to be restricted securities, as that term is defined in
Securities Act Rule 144.
7.6 Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement.
7.7 Counterparts. This Agreement may be executed simultaneously
in multiple counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same Agreement.
7.8 Descriptive Headings. The descriptive headings of this
Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
7.9 Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement will be governed by and
construed in accordance with the domestic laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of New York or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of
New York.
7.10 Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties
hereto with respect of the subject matter contained herein. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
7.11 Notices. All notices, demands or other communications to
be given or delivered under or by reason of the provisions of this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally to the recipient, sent to the recipient by facsimile transmission,
sent to the recipient by reputable express courier service (charges prepaid)
or three business days after being mailed to the recipient by certified or
registered mail, return receipt requested and postage prepaid. Such notices,
demands and other communications will be sent to each Holder at the address
indicated on the records of the Company and to the Company at the address set
forth in the Agreement or to such other address or to the attention of such
other person as the recipient party has specified by prior written notice to
the sending party.
7.12 Confidentiality. The Company shall hold in strict
confidence and shall not disclose information with respect to sales of Common
Stock by any Holder, including the fact of such sales, the amount of such
sales and the timing of such sales, except as such information shall become
public without violation of this Section 7.12, as may be required by
applicable law, rules or regulations or with the express written consent of
such Investor.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
THE COMPANY: PayStar Communications Corporation
By /s/ Xxxx XxXxx
Xxxx XxXxx, President
THE SHAREHOLDER:
Schedule of Shareholders
Name: Xxxxxxxxx Xxxx
Number of Shares: 62,500
Name: Xxxxx Xxxxxx
Number of Shares 62,500
