1
Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of August __,
1999, by and between QUEPASA.COM, INC., a Nevada corporation (the "Company"),
and ESTEFAN ENTERPRISES, INC., a _______________ corporation ("EEI").
WHEREAS, pursuant to the terms of the Agreement (the "EEI Agreement"),
dated as of the date hereof, between the Company, EEI and Gloria Estefan, the
Company issued to EEI 156,863 shares (the "Shares") of the Company's common
stock, $.001 par value per share ("Common Stock"); and
WHEREAS, in order to induce EEI to enter into the EEI Agreement, the
Company agreed to provide EEI with certain registration rights relating to the
Shares.
NOW THEREFORE, in consideration of the promises and mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Definitions. As used herein, the following defined terms shall have
the following respective meanings:
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Act Registration Statement" means a registration
statement filed with the SEC pursuant to the Exchange Act.
"Indemnified Party" has the meaning set forth in subparagraph
6(c).
"Indemnifying Party" has the meaning set forth in subparagraph
6(c).
The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act or the Exchange Act and the declaration or
ordering of the effectiveness of such registration statement.
"Registrable Securities" means the Shares and all other
securities issued or issuable with respect to the Shares by way of a stock
dividend or stock
2
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Registrable
Securities, such Registrable Securities shall cease to be Registrable Securities
when (i) a registration statement registering such Registrable Securities under
the Securities Act has been declared effective and such Registrable Securities
have been sold or otherwise transferred by a Shareholder pursuant to such
effective registration statement or (ii) such Registrable Securities are sold to
the public in accordance with Rule 144.
"Rule 144" means Rule 144 under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shareholder(s)" means EEI and any affiliates thereof who agree
to become bound by the provisions of this Agreement in accordance with paragraph
9 hereof.
2. Demand Registrations.
(a) If at any time following the first anniversary of the date
hereof, the Company receives a written request that the Company
effect a registration under the Securities Act with respect to
the Registrable Securities from Shareholders holding at least a
majority of the Registrable Securities, the Company will use its
diligent best efforts to effect such registration, which
registration may be under any form of registration statement
eligible for use by the Company for such purpose, and as would
permit or facilitate the sale and distribution of all or such
portion of the Registrable Securities as are specified in such
request; provided, however, that the Company shall not be
obligated to take any action to effect such registration
pursuant to this subparagraph 2(a): (i) after the Company has
effected two such registrations pursuant to this subparagraph
2(a) and such registrations have been declared or ordered
effective or (ii) to effect a registration for less than 500,000
shares. The Company shall not be required to cause a
registration statement requested pursuant to this subparagraph
2(a) to become effective prior to 120 days following the
effective date of a registration statement initiated by the
Company or a Shareholder. The Company shall have the right to
include in a registration statement filed pursuant to this
subparagraph 2(a) shares of Common Stock to be offered and sold
for the account of the Company or any other security holders of
the Company.
3
(b) Subject to subparagraph 2(a) above and the other terms and
conditions contained herein, the Company shall file a
registration statement covering the Registrable Securities so
requested to be registered as soon as practical, but in any
event within 120 days after receipt of the request or requests
of the Shareholder or Shareholders; provided, however, that the
Company may postpone for up to 180 days, the filing or the
effectiveness (which may include the withdrawal of an effective
registration statement) of such a registration statement if the
Company's Board of Directors reasonably determines in its good
faith judgment that it would be materially disadvantageous to
the Company for such a registration statement to be filed and
become effective, or be maintained effective; and, provided
further, that in such event, the Shareholders will be entitled
to withdraw such demand for registration and, if such demand is
withdrawn, such registration will not count as one of the demand
registrations the Shareholders are entitled to hereunder.
(c) The Company shall have the right to select the investment
banker(s) and manager(s) to administer and underwrite the
offering, subject to the approval of a majority of the
Shareholders proposing to distribute their securities through
such underwriting, which will not be unreasonably withheld. In
connection with any registration statement that pertains to
Registrable Securities, all Shareholders proposing to distribute
their securities through such underwriting shall (i) enter into
any reasonable underwriting agreement required by the proposed
underwriter for the registration of Registrable Securities and
(ii) immediately notify the Company, at any time when a
prospectus relating to the Registrable Securities is required to
be delivered under the Securities Act, of the occurrence of any
event relating to information respecting such Shareholders as a
result of which the prospectus which forms a part of such
registration statement contains an untrue statement of a
material fact or omits to state any material fact necessary to
make the statement therein not misleading.
4
2. Piggyback Registrations.
(a) If at any time following the first anniversary of the date
hereof, the Company shall determine to register any of its
securities (other than pursuant to a demand registration in
accordance with Paragraph 2 hereof), either for its own account
or the account of a security holder or holders, in a
registration statement covering the sale of Common Stock to the
general public pursuant to an underwritten public offering
(except with respect to any registration filed on Form S-8, Form
S-4 or any successor forms thereto), the Company will: (i) give
to each Shareholder written notice thereof at least 15 days
before the initial filing of such registration statement; and
(ii) use its best efforts to include in such registration (and
any related qualification under blue sky laws) and in any
underwriting involved therein all the Registrable Securities
specified in a written request or requests, made within 10 days
after receipt of such written notice from the Company, except as
set forth in subparagraph 3(b) below.
5
(b) The right of any Shareholder to registration pursuant to
this Paragraph 3 shall be conditioned upon such Shareholder's
participation in the underwriting, to the extent provided
herein. All Shareholders proposing to distribute their
securities through such underwriting shall (together with the
Company) enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such
underwriting by the Company. If requested by the underwriter,
the Shareholders will agree, for themselves and their
affiliates, not to sell or offer to sell any shares of their
Common Stock for a reasonable period of time (not to exceed 180
days) after the effective date of the registration statement.
Notwithstanding any other provision of this Paragraph 3, if the
underwriter determines that marketing factors require a
limitation of the number of shares to be underwritten, the
Company shall so advise all holders of Registrable Securities
that would otherwise be registered and underwritten pursuant
hereto and the Company shall include in such registration, prior
to the inclusion of any securities that are not Registrable
Securities (other than the securities the registration of which
gave rise to the right of any Shareholder to include Registrable
Securities in such registration), the number of shares of
Registrable Securities requested to be included in the
registration which in the opinion of such underwriter can be
sold, pro rata among all Shareholders in proportion, as nearly
as practicable, to the respective amounts of Registrable
Securities held by such Shareholder at the time of filing the
registration statement, with further proportional allocations
among the Shareholders and if any such Shareholder has requested
less than all such Registrable Securities it is entitled to
register.
3. Expenses of Registration. All expenses incurred in connection
with any registration or qualification pursuant to this Agreement, including,
without limitation, all registration, filing and qualification fees, printing
expenses, fees and disbursements of counsel for the Company, and expenses and
fees of any special audits incidental to or required by such registration, shall
be borne by the Company; provided, however, that the Company shall not be
required to pay fees of legal counsel of the Shareholders, or underwriters'
discounts or commissions relating to Registrable Securities (such underwriters'
fees, discounts or commissions to be borne by the Shareholders, on a pro rata
basis, based upon the number of shares of Registrable Securities sold by each
Shareholder).
6
4. Registration Procedures. Whenever the holders of Registrable
Securities have requested that any Registrable Securities be registered pursuant
to this Agreement, the Company will use its best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof, and pursuant thereto the Company will as
promptly as practicable:
(a) prepare and file with the Securities and Exchange Commission
a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration
statement to become effective;
(b) prepare and file with the Securities and Exchange Commission
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 a
period of not less than six months 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;
(c) furnish to each seller of Registrable Securities such 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 Registrable Securities owned
by such seller;
(d) use its best efforts to register or qualify such Registrable
Securities under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and
all other acts and things that may be reasonably necessary or
advisable to enable such seller to consummate the disposition in
such jurisdictions of the Registrable Securities owned by such
seller (provided that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this
Subsection, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in
any such jurisdiction);
7
(e) promptly notify each seller of such Registrable Securities,
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 contains an untrue statement of a
material fact or omits any fact necessary to make the statements
therein not misleading, and, at the request of any such seller,
the Company will prepare a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of
such Registrable Securities, such prospectus will not contain an
untrue statement of a material fact or omit to state any fact
necessary to make the statements therein not misleading;
(f) cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by the
Company are then listed and, if not so listed, to be listed on
the NASD automated quotation system if the Common Stock so
qualifies;
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such
registration statement;
(h) enter into such customary agreements (including underwriting
agreements in customary form) and take all such other actions as
the holders of a majority of the Registrable Securities being
sold or the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable
Securities (including, without limitation, effecting a stock
split or a combination of shares);
(i) make available for inspection by any seller of Registrable
Securities any underwriter participating in any disposition
pursuant to such registration statement and any attorney,
accountant or other agent retained by any such seller or
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 seller, underwriter, attorney, accountant or agent in
connection with such registration statement;
8
(j) otherwise use its best efforts to comply with all applicable
rules and regulations of the SEC and make available to its
security holders, as soon as reasonably practicable, an earnings
statement covering the period of at least twelve months
beginning with the first day of the Company's first full
calendar quarter after the effective date of the registration
statement, which earnings statement shall satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 thereunder;
and
(k) obtain a cold comfort letter from the Company's independent
public accountants in customary form and covering such matters
of the type customarily covered by cold comfort letters.
5. Indemnification. The Company will indemnify each Shareholder,
each of the Shareholder's officers, directors, partners and employees, and each
person controlling such Shareholder, with respect to such registration or
qualification effected pursuant to this Agreement and in which Registrable
Securities are included, against all claims, losses, damages, and liabilities
(or actions in respect thereto) arising out of or based on any untrue statement
(or alleged untrue statement) of a material fact contained in any prospectus,
registration statement or other document incident to any such registration or
qualification, or based on any 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 any violation by the Company of any rule or
regulation promulgated pursuant to any Federal, state or common law rule or
regulation including' without limitation, the Securities Act, applicable to the
Company and relating to action or inaction required of the Company in connection
with any such registration qualification or compliance and will reimburse each
such Shareholder, each of the Shareholder's officers, directors, partners and
employees, and each person controlling such Shareholder, for any legal and any
other reasonable expenses incurred in connection with investigating, or
defending any such claim, loss, damage, liability or action, including
reasonable attorneys' fees and expenses; provided, however, that the Company
will not be liable in any such case to the extent that any such claim, loss,
damage or liability arises out of or is based on any untrue statement or
omission based upon and in conformity with written information furnished to the
Company by such Shareholder in a signed document. Such indemnity shall be
effective notwithstanding any investigation made by or on behalf of any
Shareholder or any such officer, director, partner, employee, or controlling
person and shall survive any transfer by the same of the Registrable Securities.
9
(a) Each Shareholder will, if Registrable Securities held by or
issuable to such Shareholder are included in the securities as
to which such registration or qualification is being effected,
indemnify the Company, each of its directors, officers and
employees, each person who controls the Company, and each other
such Shareholder, each of such Shareholder's officers,
directors, partners and employees, and each person controlling
such other Shareholder, against all claims, losses, damages and
liabilities (or actions in respect thereto) arising out of or
based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement,
prospectus or other document, or any omission (or alleged
omission) to state therein a material fact required to be stated
therein or necessary to make the statements therein not
misleading, and will reimburse the Company, such other
Shareholders, each such Shareholder's directors, officers,
partners, employees or persons for any legal or any other
reasonable expenses incurred in connection with investigating or
defending any such claim, loss, damage, liability or action,
including reasonable attorneys' fees and expenses, in each case
to the extent, but only to the extent, that such untrue
statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus or
other document in reliance upon and in conformity with written
information furnished to the Company by such Shareholder.
Notwithstanding the foregoing, the liability of any such
Shareholder shall not exceed an amount equal to the net proceeds
realized by each such Shareholder sold as contemplated herein.
Such indemnity shall be effective notwithstanding any
investigation made by or on behalf of the Company, any such
director, officer, partner, employee, or controlling person and
shall survive the transfer of such securities by such
Shareholder.
10
(b) Each party entitled to indemnification under this Paragraph
6 (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of
any claim as to which indemnity may be sought. Unless in the
reasonable judgment of the Indemnified Party a conflict of
interest may exist between the Indemnifying Party and the
Indemnified Party, the Indemnifying Party shall be permitted to
assume the defense of any such claim or any litigation resulting
therefrom; provided, however, that in any event counsel for the
Indemnifying Party or Indemnified Party who shall conduct the
defense of such claim or litigation as provided above shall be
approved by the other Party (which approval shall not be
unreasonably withheld), and such other Party may participate in
such defense at such Party's expense; provided, further, that
the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying party of its
obligations under this Paragraph 6 unless such failure shall
have had a material adverse effect on the Indemnifying Party's
ability to defend such claim.
11
(c) The Indemnified Party shall make no settlement of any claim
or litigation which would give rise to liability on the part of
the Indemnifying Party under any indemnity contained in this
Paragraph 6 without the written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld or
delayed, and no Indemnifying Party shall make any settlement of
any such claim or litigation without the consent of the
Indemnified Party, which consent shall not be unreasonably
withheld or delayed. If a firm offer is made to settle a claim
or litigation defended by the Indemnified Party and the
Indemnified Party notifies the Indemnifying Party in writing
that the Indemnified Party desires to accept and agree to such
offer, but the Indemnifying Party elects not to accept or agree
to such offer within ten days after receipt of written notice
from the Indemnified Party of the terms of such offer, then, in
such event, the Indemnified Party shall continue to contest or
defend such claim or litigation and, if such claim or litigation
is within the scope of the Indemnifying Party's indemnity
contained in this Paragraph 6, the Indemnified Party shall be
indemnified pursuant to the terms hereof. If a firm offer is
made to settle a claim or litigation defended by the
Indemnifying Party and the Indemnifying Party notifies the
Indemnified Party in writing that the Indemnifying Party desires
to accept and agree to such offer, but the Indemnified Party
elects not to accept or agree to such offer within ten days
after receipt of written notice from the Indemnifying Party of
the terms of such offer, then, in such event, the Indemnified
Party may continue to contest or defend such claim or litigation
and, in such event, the total maximum liability of the
Indemnifying Party to indemnify or otherwise reimburse the
Indemnified Party in accordance with this Agreement with respect
to such claim or litigation shall be limited to and shall not
exceed the amount of such settlement offer, plus reasonable
out-of-pocket costs and expenses (including reasonably fees and
disbursements of counsel) to the date of notice that the
Indemnifying Party desired to accept such settlement offer.
(d) The indemnification payments required pursuant to this
Paragraph 6 for expenses of the investigation or defense of a
claim or lawsuit shall be made from time to time during the
course of the investigation or defense, as the case may be, upon
submission of reasonably sufficient documentation that any such
expenses have been incurred.
12
6. Information to be Provided by Shareholders. The Shareholders
whose securities are included in any registration shall furnish to the Company
such written information regarding such Shareholder or Shareholders and the
distribution proposed by such Shareholder or Shareholders as the Company may
reasonably request and as shall be required in connection with any registration
or qualification referred to in this Agreement. The Company agrees to include in
any such registration statement all information concerning the Shareholders and
their distribution which the Shareholders shall reasonably request.
7. Rule 144 Reporting. With a view to making available to the
Shareholders benefits of certain rules and regulations of the SEC which may
permit the sale of the Shares to the public without registration, after the
completion of any registration pursuant to Paragraph 2 or 3 above, the Company
agrees to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144, or any successor
provision thereto, at all times;
(b) use its best efforts to file with the SEC in a timely manner
all reports and other documents required of the Company under
the Securities Act and the Exchange Act;
(c) so long as a Shareholder owns any Registrable Securities, to
furnish to such Shareholder forthwith upon its request a written
statement by the Company as to the Company's compliance with the
reporting requirements of Rule 144 and of the Securities Act and
the Exchange Act, a copy of the most recent annual or quarterly
report of the Company, and such other reports and documents so
filed by the Company as such Shareholder may reasonably request
in availing itself of any rule or regulation of the SEC allowing
such Shareholder to sell any such securities without
registration; and
(d) take any further action reasonably requested by a
Shareholder to enable such Shareholder to sell its Registrable
Securities without registration under Rule 144, under any
successor provision, or any similar rule or regulation
promulgated by the SEC from time to time.
13
8. Transfer of Registration Rights. The rights to cause the Company
to register Registrable Securities that are granted by the Company under
Paragraphs 2 and 3 may be assigned by a Shareholder to an affiliate of EEI upon
transfer of such Registrable Securities to such affiliate other than pursuant to
a registration statement, Rule 144 or Rule 145; provided, however, that (i) at
or before the time of the transfer the transferee or assignee agrees in writing
for the benefit of the Company to be bound by all of the provisions contained in
this Agreement and (ii) the Company is given written notice by the Shareholder
at the time of or within a reasonable time after the transfer, stating the name
and address of the transferee or assignee and identifying the securities with
respect to which such registration rights are being transferred or assigned.
Subject to the foregoing provision, this Agreement shall be binding upon, and
inure to the benefit of, the parties hereto and their respective successors and
assigns.
9. Changes. The terms and provisions of this Agreement may only be
modified, amended or waived with the written consent of the Company and EEI.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF ARIZONA WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF ARIZONA OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF ARIZONA.
11. Notice. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement will be in
writing and will be deemed to have been given when delivered personally, one
business day after being sent via a nationally recognized overnight courier, or
when sent, when sent via facsimile promptly confirmed in writing to the
recipient. Such notices, demands and other communications will be sent to the
address indicated below:
(i) If to the Company, to:
quepasa.com, inc.
One Arizona Center
400 E. Van Buren, 4th Floor
Phoenix, Arizona 85004
Attention: Gary L. Trujillo
Telecopy No.: (602) 716-0200
14
with copies to:
Brownstein, Hyatt & Farber, P.C.
410 Seventeenth Street, 22nd Floor
Denver, Colorado 80202
Attention: Jeffrey M. Knetsch, Esq.
Telecopy No.: (303) 223-1111
(ii) If to EEI, to:
Estefan Enterprises, Inc.
420 Jefferson and Fifth Street
Miami Beach, Florida
Attention: Frank J. Amadeo
Telecopy No.: (___) ___-____
with a copy to:
_________________________
_________________________
_________________________
_________________________
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.
12. Termination. This Agreement shall terminate on the first day
that all the Shares cease to be Registrable Securities.
13. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original and which together shall constitute a
single agreement.
14. Headings. The headings of the Paragraphs of this Agreement are
inserted for convenience only and shall not be deemed to constitute a part
hereof.
15. Severability. If any provision or any portion of any provision
of this Agreement shall be held to be void or unenforceable, the remaining
portions of this Agreement shall continue in full force and effect.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
15
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
duly executed by their authorized officers as of the date first above written.
QUEPASA.COM, INC.
By: /s/ Gary L. Trujillo
Gary L. Trujillo
Chairman and Chief Executive
Officer
ESTEFAN ENTERPRISES, INC.
By: /s/ Frank J. Amadeo
Frank J. Amadeo
President