EXHIBIT 10.26
PUT AND CALL AGREEMENT
This Put and Call Agreement (the "Agreement"), dated as of June 29,
2002, is entered into by and between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "▇▇▇▇▇") and La
Jolla Cove Investors, Inc. a California corporation ("LJCI"), with
reference to the following:
WHEREAS, concurrently herewith, LJCI is purchasing from PayStar
Corporation (the "Company") 2,222,222 shares of the Company's common stock
(the "Stock"); and
WHEREAS, the parties hereto desire to provide for certain put and call
provisions relating to the Stock.
NOW, THEREFORE, in consideration of the mutual promises and convenants
contained herein, and in consideration of LJCI purchasing the Stock, the
receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
1. Put Right. During the period and from time to time between March
27, 2003 and June 27, 2003 (the "Put Period"), LJCI shall have the right to
sell in its sole and absolute discretion, and Yotty shall thereafter have
the obligation to purchase, all or a portion of the Stock for a cash
purchase price of $0.17 per share. The election of LJCI to sell the Stock
shall be pursuant to written notice to Yotty, which notice shall be sent at
least three business days prior to the effective date of the transfer and
shall specify the number of shares of Stock which LJCI elects to sell
hereunder at such time. On the effective date of the transfer, Yotty shall
pay to LJCI (or its designee), the purchase price therefor in good funds,
and within three business days thereafter LJCI shall deliver to Yotty
certificates evidencing the shares of Stock elected to be sold together
with a stock power. Any transfer hereunder shall be without warranty or
representation except as to good title. The obligations of Yotty hereunder
shall not be subject to any defense, setoff, recoupment, impairment or
termination for any reason including, without limitation, whether the Stock
is publicly traded, whether any bankruptcy proceedings have been instituted
by or against the Company or any order has been entered adjudging the
Company a bankrupt or insolvent, or whether the Company or its transfer
agent consents to or authorizes the transfer. In the event that, at
anytime, LJCI sells up to 500,000 shares of the Stock for a net amount,
after reasonable brokerage commissions, of $200,000 or more, LJCI's Put
right shall be null and void as to all of the Stock.
2. Call Right. During the period and from time to time between the
date hereof and March 27, 2003 (the "Call Period"), Yotty shall have the
option to purchase, and LJCI shall thereafter have the obligation to sell,
all or a portion of the Stock for a cash purchase price of $0.20 per share.
The election of Yotty to purchase the Stock shall be pursuant to written
notice to LJCI, which notice shall be sent at least
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three business days prior to the effective date of the transfer and shall
specify the number of shares of Stock which Yotty elects to purchase
hereunder at such time. On the effective date of the transfer, Yotty shall
pay to LJCI (or its designee) the purchase price therefor in good funds,
and within three business days thereafter LJCI shall deliver to Yotty
certificates evidencing the shares of Stock elected to be sold together
with a stock power. Any transfer hereunder shall be without warranty or
representation except as to good title. The exercise of LJCI's Put, in
whole or in part, or the sale by LJCI of up to 500,000 shares, shall cancel
a corresponding amount of Yotty's Call.
3. Adjustment to Shares. The number of shares and the per share
purchase price shall be appropriately adjusted in the case of any
reclassification or change of outstanding securities, the subdivision or
combination of the Stock, the payment of a dividend with respect to the
Stock payable in shares or a distribution of shares with respect to the
Stock. If the Company at any time while the Put and Call remain outstanding
and unexpired shall subdivide or combine its shares, the per share purchase
price shall be proportionately decreased in the case of a subdivision or
increased in the case of a combination. Upon each adjustment in the per
share purchase price, the number of shares shall be adjusted, to the
nearest whole share, to the product obtained by multiplying the number of
shares purchasable immediately prior to such adjustment by a fraction
(a) the numerator of which shall be the per share purchase price prior to
the adjustment and (b) the denominator of which shall be the per share
purchase price immediately thereafter.
4. Interest. At such time that money is due to any party, and if
such amount is not paid within five (5) business days, then that amount
shall accrue interest at the rate of nine percent (9%) per year.
5. Governing Law. This Agreement shall in all respects be
construed, interpreted and enforced in accordance with and governed by the
laws of the State of California, United States of America.
6. Consent to Jurisdiction. The Yotty (i) hereby irrevocably
submits to the jurisdiction of the United States District Court sitting in
the District of San Diego and the courts of the State of California located
in San Diego county for the purposes of any suit, action or proceeding
arising out of or relating to this Agreement or the transactions
contemplated hereunder and (ii) hereby waives, and agrees not to assert in
any such suit, action or proceeding, any claim that he is not personally
subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the
suit, action or proceeding is improper. The Yotty consents to process
being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing in this section shall
affect or limit any right to serve process in any other manner permitted by
law.
7. Attorneys' Fees. In the event of any legal action between the
parties with respect to this Agreement or the subject matter hereof, the
prevailing party shall be entitled to recover reasonable attorneys' fees in
addition to court costs and litigation expenses incurred in said legal
action, regardless of whether such legal action is prosecuted to judgment.
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8. Notices. Any notice, demand or other communication required or
permitted under this Agreement shall be deemed given and delivered when in
writing and (a) personally served upon the receiving party, or (b) upon
hand delivery by telex (with correct answer back received), telecopy or
facsimile at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be
received), or (c) upon the third (3rd) calendar day after mailing to the
receiving party by either (i) United States registered or certified mail,
postage prepaid, or (ii) FedEx or other comparable overnight delivery
service, delivery charges prepaid, and addressed as follows:
To Yotty: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To ▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To LJCI: La Jolla Cove Investors, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
9. Severability. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or invalid, then this Agreement shall continue in full force
and effect without said provision. If this Agreement continues in full
force and effect as provided above, the parties shall replace the invalid
provision with a valid provision which corresponds as far as possible to
the spirit and purpose of the invalid provision.
10. Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be executed by less than all of the parties
hereto, each of which shall be enforceable against the parties actually
executing such counterparts, and all of which together shall constitute one
document. Facsimile execution shall be deemed originals.
11. Entire Agreement. This Agreement constitute the entire agreement
between the parties with respect to the subject matter hereof, and
supersede all prior oral or written agreements, representations or
warranties between the parties other than those set forth herein or herein
provided for.
12. Successors and Assigns. The provisions hereof shall inure to the
benefit of, and be binding upon, the permitted successors and assigns,
heirs, executors, and administrators of the parties hereto.
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13. Amendment and Waiver. No modification or waiver of any provision
of this Agreement shall be binding upon the party against whom it is sought
to be enforced, unless specifically set forth in writing signed by an
authorized representative of that party. A waiver by any party of any of
the terms or conditions of this Agreement in any one instance shall not be
deemed or construed to be a waiver of such terms or conditions for the
future, or of any subsequent breach thereof. The failure by any party
hereto at any time to enforce any of the provisions of this Agreement, or
to require at any time performance of any of the provisions hereof, shall
in no way to be construed to be a waiver of such provisions or to affect
either the validity of this Agreement or the right of any party to
thereafter enforce each and every provision of this Agreement.
14. Status of Shares. Yotty acknowledges that the Stock being
purchased by LJCI constitutes restricted securities and the resale thereof
by the Yotty may be limited and subject to applicable securities laws. In
the event that the Yotty acquires the Stock pursuant to the exercise of the
Put Right or Call Right, he shall acquire the Stock for investment purposes
and not with a view to distribution.
IN WITNESS WHEREOF, LJCI and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ have duly executed this
Agreement as of the date first above written.
La Jolla Cove Investors, Inc.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Portfolio Manager
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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