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Exhibit 4.03
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of
January 26, 2000 by and among QUEPASA.COM, INC. ("Quepasa") and VERDE CAPITAL
PARTNERS, LLC AND VERDE REINSURANCE COMPANY, LTD. (collectively, the
"Shareholders").
WITNESSETH:
WHEREAS, Quepasa, Credito Acquisition Inc., a Delaware corporation
wholly-owned by Quepasa (the "Merger Sub"), Credito.com, Inc., an Arizona
corporation ("Credito") and the Shareholders have entered into a Merger
Agreement dated January 17, 1999 (the "Merger Agreement"); and
WHEREAS, as a condition to the closing of the Merger Agreement,
Quepasa and the Shareholders have agreed to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. DEFINITIONS
1.1 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended;
1.2 "Form S-3" means such form under the Securities Act as in effect on
the date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by Quepasa with
the SEC.
1.3 "Nasdaq" shall mean the Nasdaq National Market;
1.4 "Quepasa IPO" means Quepasa's initial public offering of common
stock effective as of June 24, 1999;
1.5 "Quepasa Common Stock" shall mean the common stock, $.001 par
value, of quepasa.com, inc., a Nevada corporation;
1.6 "Registration Expenses" shall mean all expenses incurred by Quepasa
in complying with Sections 2.1 and 2.2 hereof, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel for Quepasa, fees and expenses of independent public accountants of
Quepasa, blue sky fees and expenses and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of Quepasa which shall be paid in any event by Quepasa).
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1.7 "Registrable Securities" means (a) the Quepasa Common Stock issued
to the Shareholders pursuant to Section 1.5 of the Merger Agreement; (b) any
shares of Quepasa Common Stock issued to the Shareholders pursuant to the
Warrants issued to the Shareholders pursuant to Section 1.5 of the Merger
Agreement; and (c) any additional securities issued to the Shareholders with
respect to the foregoing upon any stock split, stock dividend, recapitalization,
dilution adjustment or similar event.
1.8 "Securities Act" means the Securities Act of 1933, as amended and
the rules and regulations promulgated thereto by the SEC.
1.9 "Selling Expenses" shall mean all underwriting discounts and
selling commissions applicable to the sale.
1.10 "SEC" or "Commission" means the Securities and Exchange
Commission.
1.11 All other capitalized terms used herein which are not specifically
defined shall have the meaning ascribed to them in the Merger Agreement.
2. REGISTRATION RIGHTS
2.1 Piggyback Registration Rights.
(a) Quepasa shall notify all Shareholders in writing at least
fifteen (15) days prior to the filing of any registration statement under the
Securities Act for purposes of a public offering of securities of Quepasa
(including, but not limited to, registration statements relating to secondary
offerings of securities of Quepasa, but excluding registration statements
relating to employee benefit plans, with respect to corporate reorganizations or
other transactions under Rule 145 of the Securities Act or any similar rule of
the Commission or a registration on any form that does not include substantially
the same information as would be required to be included in a registration
statement covering the Registrable Securities, including Form S-4 or any form
substituted therefor) and will afford each such Shareholder an opportunity to
include in such registration statement, at such Shareholder's election, all or
part of such Registrable Securities held by such Shareholder. Each Shareholder
desiring to include in any such registration statement all or any part of the
Registrable Securities held by it shall, within ten (10) days after the
above-described notice from Quepasa, so notify Quepasa in writing. Such notice
shall state the intended method of disposition of the Registrable Securities by
such Shareholder. If a Shareholder decides not to include any or all of its
Registrable Securities in any registration statement thereafter filed by
Quepasa, such Shareholder shall nevertheless continue to have the right to
include any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by Quepasa with respect to offerings of
its securities, all upon the terms and conditions set forth herein.
(b) Underwriting. If the registration statement under which
Quepasa gives notice under this Section 2.1 is for an underwritten offering,
Quepasa shall so advise the Shareholders of Registrable Securities. In such
event, the right of any such Shareholder to be included in a registration
pursuant to this Section 2.1 shall be conditioned upon such
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Shareholder's participation in such underwriting and the inclusion of such
Shareholder's Registrable Securities in the underwriting to the extent provided
herein. All Shareholders proposing to distribute their Registrable Securities
through such underwriting shall enter into an underwriting agreement in
customary form with the underwriter or underwriters selected for such
underwriting by Quepasa. Notwithstanding any other provision of the Agreement,
if the underwriter determines in good faith that marketing factors require a
limitation of the number of shares to be underwritten, the number of shares that
may be included in the underwriting shall be allocated, first, to Quepasa and
second to holders of Registrable Securities and other security holders, if any,
who have registration rights with respect to the securities they desire to have
registered in proportion, as nearly as practicable, to their respective holdings
of securities of Quepasa. If any Shareholder disapproves of the terms of any
such underwriting, such Shareholder may elect to withdraw therefrom by written
notice to Quepasa and the underwriter, delivered at least ten (10) business days
prior to the effective date of the registration statement. Any Registrable
Securities excluded or withdrawn from such underwriting shall be excluded and
withdrawn from the registration. For any Shareholder which is a partnership or
corporation, the partners, retired partners and stockholders of such
Shareholder, or the estates and family members of any such partners and retired
partners and any trusts or other entities controlled by or formed for the
benefit of any of the foregoing person shall be deemed to be a single
"Shareholder", and any pro rata reduction with respect to such "Shareholder"
shall be based upon the aggregate amount of shares carrying registration rights
owned by all entities and individuals included in such "Shareholder," as defined
in this sentence.
2.2 Form S-3 Registration.
(a) On or within 10 days from the one-year anniversary of the
closing of the Merger Agreement, Quepasa shall diligently prepare and file with
the SEC a registration statement on Form S-3 to register for resale by the
Shareholders all of the Registrable Securities.
(b) After filing, Quepasa shall diligently use its best efforts to
cause such registration statement to become and remain effective until the
earlier of (i) two years after effectiveness of the Form S-3 or (ii) until the
Shareholders are free to resell all of the Registrable Securities pursuant to
Rule 144(k).
2.3 Obligations of Quepasa. Whenever required to effect the
registration of any Registrable Securities pursuant to Sections 2.2 and 2.3
herein, Quepasa shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC 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 provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.
(b) Furnish to the Shareholders such number 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 Registrable
Securities owned by them.
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(c) Use its best 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 Shareholders;
provided that Quepasa 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.
(d) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each
Shareholder participating in such underwriting shall also enter into and perform
its obligations under such an agreement.
(e) Notify each Shareholder of Registrable Securities 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 light of the circumstances then existing.
(f) Use its best efforts to furnish, on the date that such
Registrable Securities are delivered to the underwriters for sale, if such
securities are being sold through underwriters, (i) an opinion, dated as of such
date, of the counsel representing Quepasa for the purposes of such registration,
in form and substance as is customarily given to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and (ii) a letter dated
as of such date, from the independent certified public accountants of Quepasa,
in form and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering addressed to the
underwriters.
2.4 Expenses of Registration. Quepasa shall pay all Registration
Expenses, except that the Shareholders shall bear all Selling Expenses
attributable to their Registrable Securities being registered and fees of their
counsel.
3. INDEMNIFICATION
3.1 To the extent permitted by law, Quepasa will indemnify and hold
harmless each Shareholder, the partners, officers and directors of each
Shareholder, any underwriter (as defined in the Securities Act) for such
Shareholder and each person, if any, who controls such Shareholder or
underwriter within the meaning of the Securities Act or the Exchange Act,
against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation") by Quepasa: (i)
any untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by Quepasa of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities
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Act, the Exchange Act or any state securities law in connection with the
offering covered by such registration statement; and Quepasa will pay to each
such Shareholder, partner, officer, director, underwriter or controlling person
for any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided however, that the indemnity agreement contained in this Section 3.1
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of
Quepasa, which consent shall not be unreasonably withheld, nor shall Quepasa be
liable in any such case for any such loss, claim, damage, liability or action to
the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by such Shareholder, partner, officer,
director, underwriter or controlling person of such Shareholder or from such
Shareholder's failure to deliver, at the time required by the Securities Act, a
final or amended prospectus that corrects any actual or alleged untrue statement
or omission contained in any preliminary prospectus or prior prospectus if such
Shareholder previously has been provided such final or amended prospectus in
accordance with Section 2.3.
3.2 To the extent permitted by law, each Shareholder will, if
Registrable Securities held by such Shareholder are included in the securities
as to which such registration qualifications or compliance is being effected,
indemnify and hold harmless Quepasa, each of its directors, its officers and
each person, if any, who controls Quepasa within the meaning of the Securities
Act, any underwriter and any other Shareholder selling securities under such
registration statement or any of such other Shareholder's partners, directors or
officers or any person who controls such Shareholder, against any losses,
claims, damages or liabilities (joint or several) to which Quepasa or any such
director, officer, controlling person, underwriter or other such Shareholder, or
partner, director, officer or controlling person of such other Shareholder may
become subject under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in strict conformity with written information furnished by such Shareholder
under an instrument duly executed by such Shareholder and stated to be
specifically for use in connection with such registration; and each such
Shareholder will pay any legal or other expenses reasonably incurred by Quepasa
or any such director, officer, controlling person, underwriter or other
Shareholder, or partner, officer, director or controlling person of such other
Shareholder in connection with investigating or defending any such loss, claim,
damage, liability or action if it is judicially determined that there was such a
Violation; provided, however, that the indemnity agreement contained in this
Section 3.2 shall not apply to amounts paid in settlement of any such loss,
claim, damage, liability or action if such settlement is effected without the
consent of the Shareholder, which consent shall not be unreasonably withheld;
and provided further, that in no event shall any indemnity under this Section 3
exceed the net proceeds from the offering received by such Shareholder.
3.3 Promptly after receipt by an indemnified party under this Section 3
of notice of the commencement of any action (including any governmental action),
such indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section 3, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense
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thereof with counsel mutually satisfactory to the parties; provided, however,
that an indemnified party shall have the right to retain its own counsel, with
the fees and expenses to be paid by the indemnifying party, if representation of
such indemnified party by the counsel retained by the indemnifying party would
be inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action, if materially
prejudicial to its ability to defend such action, shall relieve such
indemnifying party of liability to the indemnified party under this Section 3
but only to the extent such failure is materially prejudicial to its ability to
defend such action, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 3.
3.4 If the indemnification provided for in this Section 3 is held by a
court of competent jurisdiction to be unavailable to an indemnified party with
respect to any losses, claims, damages or liabilities referred to herein, the
indemnifying party, in lieu of indemnifying such indemnified party thereunder,
shall to the extent permitted by applicable law contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and of the indemnified party on the other
in connection with the Violation(s) that resulted in such loss, claim, damage or
liability, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by a court of law by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a material
fact relates to information supplied by the indemnifying party or by the
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
provided, that in no event shall any contribution by a Shareholder hereunder
exceed the net proceeds from the offering received by such Shareholder.
3.5 The obligations of Quepasa and Shareholders under this Section 3
shall survive completion of any offering of Registrable Securities in a
registration statement and the termination of this agreement. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation.
4. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights to cause Quepasa to register Registrable Securities pursuant
to this Agreement may be assigned by a Shareholder to a transferee or assignee
of Registrable Securities which (a) is a subsidiary, parent, general partner,
limited partner, retired partner, member or retired member, or director,
officer, employee or owner of a Shareholder, or (b) is a Shareholder's family
member or trust or other entity controlled by or formed for the benefit of an
individual Shareholder or family; provided, however, (i) the transferor shall,
within ten (10) days after such transfer, furnish to Quepasa written notice of
the name and address of such transferee or assignee and the securities with
respect to which such registration rights are being assigned and (ii) such
transferee shall agree to be subject to all restrictions set forth in this
Agreement.
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5. RULE 144 REPORTING
With a view to making available to the Shareholders the benefits of
certain rules and regulations of the SEC which may permit the sale of the
Registrable Securities to the public without registration, Quepasa agrees to use
its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act;
(b) File with the SEC, in a timely manner, all reports and other
documents required of Quepasa under the Exchange Act; and
(c) So long as a Shareholder owns any Registrable Securities,
furnish to such Shareholder forthwith upon request: a written statement by
Quepasa as to its compliance with the reporting requirements of Rule 144 of the
Securities Act and of the Exchange Act; a copy of the most recent annual or
quarterly report of Quepasa; and such other reports and documents as a
Shareholder may reasonably request in availing itself of any rule or regulation
of the SEC allowing it to sell any such securities without registration.
6. MISCELLANEOUS
6.1 No Waiver; Cumulative Remedies. No failure or delay on the part of
any party to this Agreement in exercising any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.
6.2 Amendments and Waivers. Except as hereinafter provided, amendments
to this Agreement shall require and shall be effective upon receipt of the
written consent of Quepasa and the Shareholders of at least a majority in
interest of the Registrable Securities. Except as hereinafter provided,
compliance with any covenant or provision set forth herein may be waived upon
written consent by the party or parties whose rights are being waived; provided,
that, the rights of Shareholders of Registrable Securities can be waived only
upon the written consent of a majority in interest of the Registrable Securities
then held by the Shareholders. Notwithstanding the foregoing, no waivers or
amendments shall be effective to reduce the percentage in interest of the
Registrable Securities then held by the Shareholders required under this
Section. Any waiver or amendments may be given subject to satisfaction of
conditions stated therein and any waiver or amendments shall be effective only
in the specific instance and for the specific purpose for which given.
6.3 Notices.
As the terms "notice" or "notices" are used herein as between the
parties, such term shall mean a written document, explaining in reason for the
notice, and the same shall be mailed by United States Postal Service Via
Certified Mail, Return Receipt Requested, or by recognized overnight courier
service, addressed as follows:
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to Quepasa:
quepasa.com, inc.
One Arizona Center
Phoenix, AZ 85004
Fax: 602-716-0200
Attn: Gary Trujillo
with a copy to:
Jeffrey Knetsch
Brownstein Hyatt & Farber, P.C.
410 17th Street
Denver, CO 80202
Fax: 303-223-1111
to the Shareholders:
Ernest C. Garcia II
Verde Capital Partners, LLC
2525 East Camelback, Suite 1150
Phoenix, AZ 85016
Fax: 602-667-2484
Ernest C. Garcia II
Verde Reinsurance Company, Ltd.
2525 East Camelback, Suite 1150
Phoenix, AZ 85016
Fax: 602-667-2484
with a copy to:
Steven D. Pidgeon, Esquire
Snell & Wilmer, LLP
One Arizona Center
Phoenix, AZ 85004
Fax: (602) 382-6070
Such notice shall be deemed to have been given on the date placed in the U.S.
Mails or delivered to the overnight courier service, whether actually received
by the addressee or not. The parties may from time to time amend the above
addresses and names by written notice given the other party.
6.4 Termination. This Agreement shall terminate with respect to any
holder of Registrable Securities on the earlier of the date that all of such
holder's Registrable Securities (a) have been sold pursuant to a registration
statement under the Securities Act or (b) may immediately be sold by such Holder
pursuant to Rule 144 under the Securities Act during any 90
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day period; provided, however, that this Agreement shall not terminate if any
shares are subject to any then-effective registration rights pursuant to Section
2 hereof.
6.5 Binding Effect; Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns, except that Quepasa shall not have the right
to delegate its obligations hereunder or to assign its rights hereunder.
6.6 Prior Agreements. This Agreement constitutes the entire agreement
between the parties and supersedes any prior understandings or agreements
concerning the subject matter hereof.
6.7 Severability. The provisions of this Agreement are severable and,
in the event that any court of competent jurisdiction shall determine that any
one or more of the provisions or part of a provision contained in this
Agreement, shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision or part of a provision of this Agreement,
but this Agreement shall be reformed and construed as if such invalid or illegal
or unenforceable provision, or part of a provision, had never been contained
herein, and such provisions or part reformed so that it would be valid, legal
and enforceable to the maximum extent possible.
6.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the substantive laws of the State of Arizona.
6.9 Headings. Article, section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
6.10 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
6.11 Further Assurances. From and after the date of this Agreement,
upon the request of any party hereto, the other parties shall execute and
deliver such instruments, documents and other writings as may be reasonably
necessary or desirable to confirm and carry out and to effectuate fully the
intent and purposes of this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Registration
Rights Agreement as of the day and year first above written.
QUEPASA.COM, INC.
By: /s/ Gary L. Trujillo
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Title: President & CEO
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VERDE CAPITAL PARTNERS, LLC
By: /s/ Ernest C. Garcia II
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Title: Ernest C. Garcia, II, Member
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VERDE REINSURANCE COMPANY, LTD.
By: /s/ Ernest C. Garcia II
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Title: Ernest C. Garcia II, Managing
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Director
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