EXHIBIT 10.3
REGISTRATION RIGHTS AGREEMENT
dated as of ______________, 1996
between
MONEYGRAM PAYMENT SYSTEMS, INC.
and
INTEGRATED PAYMENT SYSTEMS INC.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
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______________, 1996 between MoneyGram Payment Systems, Inc., a Delaware
corporation (the "Company"), and Integrated Payment Systems Inc., a Delaware
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corporation ("IPS").
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RECITALS
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WHEREAS, pursuant to the Contribution Agreement dated as of _______,
1996 (the "Contribution Agreement") between First Data Corporation, a Delaware
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corporation and the parent company of IPS ("FDC"), IPS and the Company, FDC, IPS
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and certain other affiliates of IPS contributed to the Company certain assets
related to the "MoneyGram/SM/" business;
WHEREAS, as a result of the transactions contemplated by the
Contribution Agreement, IPS is the owner of all of the Company's issued and
outstanding common stock as of the date hereof, and IPS and the Company have
determined to offer to the public (the "Initial Public Offering") shares of the
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Company's common stock, such Initial Public Offering to consist of a secondary
offering by and for the benefit of IPS; and
WHEREAS, the parties hereto desire to enter into this Agreement
setting forth the terms of certain registration rights applicable to the
Registrable Securities (as defined below).
NOW, THEREFORE, in consideration of good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. Definitions and Usage.
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As used in this Agreement:
1.1. Definitions.
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Agent. "Agent" shall mean the principal placement agent on an agented
placement of Registrable Securities.
Commission. "Commission" shall mean the Securities and Exchange
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Commission.
Common Stock. "Common Stock" shall mean (i) the common stock, par
value $.01 per share, of the Company, and (ii) shares of capital stock of the
Company issued by the Company in respect of or in exchange for shares of such
common stock in connection with any stock dividend or distribution, stock split-
up, recapitalization, recombination or exchange by the Company generally of
shares of such common stock.
Continuously Effective. "Continuously Effective", with respect to a
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specified registration statement, shall mean that it shall not cease to be
effective and available for Transfers of Registrable Securities thereunder for
longer than either (i) any ten (10) consecutive business days, or (ii) an
aggregate of fifteen (15) business days during the period specified in the
relevant provision of this Agreement.
Demand Registration. "Demand Registration" shall have the meaning set
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forth in Section 2.1(i).
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Demanding Holders. "Demanding Holders" shall have the meaning set
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forth in Section 2.1(i).
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Exchange Act. "Exchange Act" shall mean the Securities Exchange Act
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of 1934, as amended.
Holders. "Holders" shall mean IPS and Transferees of IPS's
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Registrable Securities with respect to the rights that such Transferees shall
have acquired in accordance with Section 8, at such times as such Persons shall
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own Registrable Securities. Notwithstanding the foregoing, in the event that IPS
deposits any Registrable Securities into the trust (the "Trust") created and
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established pursuant to that Irrevocable Voting Trust Agreement dated the date
hereof between FDC, IPS and ___________, as trustee (the "Trustee"), then each
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of IPS and the Trustee, individually and collectively shall be deemed to
constitute a "Holder" for all purposes under this Agreement; provided, however,
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that the Trustee shall not under any circumstances be deemed a "Selling Holder"
for purposes of Section 7.2 or an "indemnifying party" for purposes of Section
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7.4 or otherwise have any obligation or liability under or pursuant to Section
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7.2 or 7.4.
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Initiating Substantial Holder. "Initiating Substantial Holder" shall
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have the meaning set forth in Section 2.2.
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Majority Selling Holders. "Majority Selling Holders" shall mean those
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Selling Holders whose Registrable Securities included in such registration
represent a majority of the Registrable Securities of all Selling Holders
included therein.
Person. "Person" shall mean any individual, corporation, partnership,
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joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization or government or other agency or political
subdivision thereof.
Piggyback Registration. "Piggyback Registration" shall have the
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meaning set forth in Section 3.1.
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Register, Registered and Registration. "Register", "registered", and
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"registration" shall refer to a registration effected by preparing and filing a
registration statement or
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similar document in compliance with the Securities Act, and the declaration or
ordering by the Commission of effectiveness of such registration statement or
document.
Registrable Securities. "Registrable Securities" shall mean, subject
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to Section 8 and Section 10.3: (i) the Shares owned by Holders on the date
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hereof, and owned by a Holder on the date of determination, (ii) any shares of
Common Stock or other securities issued as (or issuable upon the conversion or
exercise of any warrant, right or other security which is issued as) a dividend
or other distribution with respect to, or in exchange by the Company generally
for, or in replacement by the Company generally of, such Shares; and (iii) any
securities issued in exchange for Shares in any merger or reorganization of the
Company; provided, however, that Registrable Securities shall not include any
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securities which have theretofore been registered and sold pursuant to the
Securities Act or which have been sold to the public pursuant to Rule 144 or any
similar rule promulgated by the Commission pursuant to the Securities Act, and,
provided further, the Company shall have no obligation under Sections 2 and 3 to
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register any Registrable Securities of a Holder if the Company shall deliver to
the Holders requesting such registration an opinion of counsel reasonably
satisfactory to such Holders and their counsel to the effect that the proposed
sale or disposition of all of the Registrable Securities for which registration
was requested does not require registration under the Securities Act for a sale
or disposition in a single public sale, and the Company offers to remove any and
all legends restricting transfer from the certificates evidencing such
Registrable Securities. For purposes of this Agreement, a Person will be deemed
to be a Holder of Registrable Securities whenever such Person has the then-
existing right to acquire such Registrable Securities (by conversion, purchase
or otherwise), whether or not such acquisition has actually been effected.
Registrable Securities then outstanding. "Registrable Securities then
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outstanding" shall mean, with respect to a specified determination date, the
Registrable Securities owned by all Holders on such date.
Registration Expenses. "Registration Expenses" shall have the meaning
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set forth in Section 6.1.
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Securities Act. "Securities Act" shall mean the Securities Act of
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1933, as amended.
Selling Holders. "Selling Holders" shall mean, with respect to a
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specified registration pursuant to this Agreement, Holders whose Registrable
Securities are included in such registration.
Shares. "Shares" shall mean the shares of Common Stock held initially
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by IPS following the closing of the Initial Public Offering.
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Shelf Registration. "Shelf Registration" shall have the meaning set
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forth in Section 2.2.
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Substantial Holder. "Substantial Holder" shall mean any Holder that
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owned on the date of this Agreement 25% or more of the Registrable Securities
then outstanding and such Transferee, if any, to whom such Substantial Holder
Transfers Registrable Securities and assigns such Substantial Holder's rights
as a Substantial Holder as permitted by Section 8.
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Transfer. "Transfer" shall mean and include the act of selling,
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giving, transferring, creating a trust (voting or otherwise), assigning or
otherwise disposing of (other than pledging, hypothecating or otherwise
transferring as security) (and correlative words shall have correlative
meanings); provided however, that any transfer or other disposition upon
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foreclosure or other exercise of remedies of a secured creditor after an event
of default under or with respect to a pledge, hypothecation or other transfer
as security shall constitute a "Transfer".
Underwriters' Representative. "Underwriters' Representative" shall
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mean the managing underwriter, or, in the case of a co-managed underwriting, the
managing underwriter designated as the Underwriters' Representative by the co-
managers.
Violation. "Violation" shall have the meaning set forth in Section
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7.1.
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1.2. Usage.
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(i) References to a Person are also references to its assigns and
successors in interest (by means of merger, consolidation or sale of all or
substantially all the assets of such Person or otherwise, as the case may be).
(ii) References to Registrable Securities "owned" by a Holder shall
include Registrable Securities beneficially owned by such Person but which are
held of record in the name of a nominee, trustee, custodian, or other agent, but
shall exclude shares of Common Stock held by a Holder in a fiduciary capacity
for customers of such Person.
(iii) References to a document are to it as amended, waived and
otherwise modified from time to time and references to a statute or other
governmental rule are to it as amended and otherwise modified from time to
time (and references to any provision thereof shall include references to
any successor provision).
(iv) References to Sections or to Schedules or Exhibits are to
sections hereof or schedules or exhibits hereto, unless the context otherwise
requires.
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(v) The definitions set forth herein are equally applicable both to
the singular and plural forms and the feminine, masculine and neuter forms of
the terms defined.
(vi) The term "including" and correlative terms shall be deemed to
be followed by "without limitation" whether or not followed by such words or
words of like import.
(vii) The term "hereof" and similar terms refer to this Agreement as
a whole.
(viii) The "date of" any notice or request given pursuant to this
Agreement shall be determined in accordance with Section 13.2.
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Section 2. Demand Registration.
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2.1.
(i) At any time on or after the date hereof, if one or more Holders
that own an aggregate of 51% or more of the Registrable Securities then
outstanding shall make a written request to the Company (the "Demanding
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Holders"), the Company shall cause to be filed with the Commission a
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registration statement meeting the requirements of the Securities Act (a "Demand
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Registration"), and each Demanding Holder shall be entitled to have included
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therein (subject to Section 2.7) all or such number of such Demanding Holder's
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Registrable Securities as the Demanding Holder shall request in writing. Any
request made pursuant to this Section 2.1 shall be addressed to the attention of
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the Secretary of the Company, and shall specify the number of Registrable
Securities to be registered, the intended methods of disposition thereof and
that the request is for a Demand Registration pursuant to this Section 2.1(i).
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(ii) The Company shall be entitled to postpone for up to 30 days the
filing of any Demand Registration Statement otherwise required to be prepared
and filed pursuant to this Section 2.1 if the Board of Directors of the Company
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determines, in its good faith reasonable judgment (with the concurrence of the
Underwriters' Representative, if any), that such registration and the Transfer
of Registrable Securities contemplated thereby would materially interfere with,
or require premature disclosure of, any financing, acquisition or reorganization
involving the Company or any of its wholly owned subsidiaries and the Company
promptly gives the Demanding Holders notice of such determination; provided,
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however, that the Company shall not have postponed pursuant to this Section
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2.1(ii) the filing of any other Demand Registration Statement otherwise required
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to be prepared and filed pursuant to this Section 2.1 during the 12 month period
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ended on the date of the relevant request pursuant to Section 2.1(i).
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(iii) Whenever the Company shall have received a demand pursuant to
Section 2.1(i) to effect the registration of any Registrable Securities, the
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Company shall promptly give written notice of such proposed registration to all
Holders. Any such Holder may, within twenty (20) days after receipt of such
notice, request in writing that all of such Holder's Registrable Securities, or
any portion thereof designated by such Holder, be included in the registration.
2.2. On or after the date of this Agreement, each Substantial Holder
that shall make a written request to the Company (the "Initiating Substantial
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Holder") shall be entitled to have all or any number of such Initiating
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Substantial Holder's Registrable Securities included in a registration with the
Commission in accordance with the Securities Act for an offering on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act (a "Shelf
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Registration"). Any request made pursuant to this Section 2.2 shall be addressed
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to the attention of the Secretary of the Company, and shall specify the number
of Registrable Securities to be registered, the intended methods of disposition
thereof and that the request is for a Shelf Registration pursuant to this
Section 2.2.
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2.3. Following receipt of a request for a Demand Registration or a
Shelf Registration, the Company shall:
(i) File the registration statement with the Commission as promptly
as practicable, and shall use the Company's best efforts to have the
registration statement declared effective under the Securities Act as soon as
practicable.
(ii) Use the Company's best efforts to keep the relevant registration
statement Continuously Effective (x) if a Demand Registration, for up to 180
days or until such earlier date as of which all the Registrable Securities under
the Demand Registration Statement shall have been disposed of in the manner
described in the registration statement, and (y) if a Shelf Registration, for
eighteen (18) months. Notwithstanding the foregoing, if for any reason the
effectiveness of a registration pursuant to this Section 2 is suspended or, in
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the case of a Demand Registration, postponed as permitted by Section 2.1(ii),
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the foregoing period shall be extended by the aggregate number of days of such
suspension or postponement.
2.4. The Company shall be obligated to effect no more than two Demand
Registrations and such number of Shelf Registrations as may be necessary to
provide each and every Substantial Holder with the right to request one Shelf
Registration. For purposes of the preceding sentence, registration shall not be
deemed to have been effected (i) unless a registration statement with respect
thereto has become effective, (ii) if after such registration statement has
become effective, such registration or the related offer, sale or
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distribution of Registrable Securities thereunder is interfered with by any stop
order, injunction or other order or requirement of the Commission or other
governmental agency or court for any reason not attributable to the Selling
Holders and such interference is not thereafter eliminated, or (iii) if the
conditions to closing specified in the underwriting agreement, if any, entered
into in connection with such registration are not satisfied or waived, other
than by reason of a failure on the part of the Selling Holders. If the Company
shall have complied with its obligations under this Agreement, a right to demand
a registration pursuant to this Section 2 shall be deemed to have been satisfied
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(i) if a Demand Registration, upon the earlier of (x) the date as of which all
of the Registrable Securities included therein shall have been disposed of
pursuant to the registration statement, and (y) the date as of which such Demand
Registration shall have been Continuously Effective for a period of 180 days,
and (ii) if a Shelf Registration, upon the effective date of a Shelf
Registration, provided no stop order or similar order, or proceedings for such
an order, is thereafter entered or initiated.
2.5. A registration pursuant to this Section 2 shall be on such
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appropriate registration statement form of the Commission as shall (i) be
selected by the Company and be reasonably acceptable to the Majority Selling
Holders, or by the Initiating Substantial Holder, as the case may be, and (ii)
permit the disposition of the Registrable Securities in accordance with the
intended method or methods of disposition specified in the request pursuant to
Section 2.1(i) or Section 2.2, respectively.
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2.6. If any registration pursuant to Section 2 involves an
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underwritten offering (whether on a "firm", "best efforts" or "all reasonable
efforts" basis or otherwise), or an agented offering, the Majority Selling
Holders, or the Initiating Substantial Holder, as the case may be, shall have
the right to select the underwriter or underwriters and manager or managers to
administer such underwritten offering or the placement agent or agents for such
agented offering; provided, however, that each Person so selected shall be
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reasonably acceptable to the Company.
2.7. Whenever the Company shall effect a registration pursuant to
this Section 2 in connection with an underwritten offering by one or more
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Selling Holders of Registrable Securities: (i) if such Selling Holders have
requested the inclusion therein of more than one class of Registrable
Securities, and the Underwriters' Representative or Agent advises each such
Selling Holder in writing that, in its opinion, the inclusion of more than one
class of Registrable Securities would adversely affect such offering, the
Demanding Holders holding at least a majority of the Registrable Securities
proposed to be sold therein by them shall decide which class of Registrable
Securities shall be included therein in such offering and the related
registration, and the other class shall be excluded; and
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(ii) if the Underwriters' Representative or Agent advises each such Selling
Holder in writing that, in its opinion, the amount of securities requested to be
included in such offering (whether by Selling Holders or others) exceeds the
amount which can be sold in such offering within a price range acceptable to the
Majority Selling Holders, securities shall be included in such offering and the
related registration to the extent of the amount which can be sold within such
price range and on a pro rata basis among all Selling Holders, first for the
account of the Substantial Holders, and second for all other Selling Holders.
Section 3. Piggyback Registration.
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3.1. If at any time the Company proposes to register (including for
this purpose a registration effected by the Company for stockholders of the
Company other than the Holders) securities under the Securities Act in
connection with the public offering solely for cash on Form ▇-▇, ▇-▇ or S-3 (or
any replacement or successor forms), the Company shall promptly give each Holder
of Registrable Securities written notice of such registration (a "Piggyback
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Registration"). Upon the written request of each Holder given within 20 days
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following the date of such notice, the Company shall cause to be included in
such registration statement and use its best efforts to be registered under the
Securities Act all the Registrable Securities that each such Holder shall have
requested to be registered. The Company shall have the absolute right to
withdraw or cease to prepare or file any registration statement for any offering
referred to in this Section 3 without any obligation or liability to any Holder.
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3.2. If the Underwriters' Representative or Agent shall advise the
Company in writing (with a copy to each Selling Holder) that, in its opinion,
the amount of Registrable Securities requested to be included in such
registration would materially adversely affect such offering, or the timing
thereof, then the Company will include in such registration, to the extent of
the amount and class which the Company is so advised can be sold without such
material adverse effect in such offering: First, all securities proposed to be
sold by the Company for its own account; second, the Registrable Securities
requested to be included in such registration by Holders pursuant to this
Section 3, and all other securities being registered pursuant to the exercise of
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contractual rights comparable to the rights granted in this Section 3, pro rata
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based on the estimated gross proceeds from the sale thereof; and third, all
other securities requested to be included in such registration.
3.3. Each Holder shall be entitled to have its Registrable Securities
included in an unlimited number of Piggyback Registrations pursuant to this
Section 3.
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3.4. If the Company has previously filed a registration statement
with respect to Registerable Securities pursuant to Section 2 or pursuant to
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this Section 3, and if such
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previous registration has not been withdrawn or abandoned, the Company will not
file or cause to be effected any other registration of any of its equity
securities or securities convertible or exchangeable into or exercisable for its
equity securities under the Securities Act (except on Form S-8 or any successor
form), whether on its own behalf or at the request of any holder or holders of
such securities, until a period of 180 days has elapsed from the effective date
of such a previous registration.
Section 4. Registration Procedures. Whenever required under Section
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2 or Section 3 to effect the registration of any Registrable Securities, the
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Company shall, as expeditiously as practicable:
4.1. Prepare and file with the Commission a registration statement
with respect to such Registrable Securities and use the Company's best efforts
to cause such registration statement to become effective; provided, however,
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that before filing a registration statement or prospectus or any amendments or
supplements thereto, including documents incorporated by reference after the
initial filing of the registration statement and prior to effectiveness thereof,
the Company shall furnish to one firm of counsel for the Selling Holders
(selected by Majority Selling Holders or the Initiating Substantial Holder, as
the case may be) copies of all such documents in the form substantially as
proposed to be filed with the Commission at least five (5) business days prior
to filing for review and comment by such counsel, which opportunity to comment
shall include an absolute right to control or contest disclosure if the
applicable Selling Holder reasonably believes that it may be subject to
controlling person liability under applicable securities laws with respect
thereto.
4.2. Prepare and file with the Commission 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 and rules thereunder with respect to the
disposition of all securities covered by such registration statement. If the
registration is for an underwritten offering, the Company shall amend the
registration statement or supplement the prospectus whenever required by the
terms of the underwriting agreement entered into pursuant to Section 5.2.
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Subject to Rule 415 under the Securities Act, if the registration statement is a
Shelf Registration, the Company shall amend the registration statement or
supplement the prospectus so that it will remain current and in compliance with
the requirements of the Securities Act for eighteen (18) months after its
effective date, and if during such period any event or development occurs as a
result of which the registration statement or prospectus contains a misstatement
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, the Company
shall promptly notify each Selling
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Holder, promptly amend the registration statement or supplement the prospectus
so that each will thereafter comply with the Securities Act and promptly furnish
to each Selling Holder of Registrable Securities such amended or supplemented
prospectus, which each such Holder shall thereafter use in the Transfer of
Registrable Securities covered by such registration statement. Pending such
amendment or supplement each such Holder shall cease making offers or Transfers
of Registrable Securities pursuant to the prior prospectus. In the event that
any Registrable Securities included in a registration statement subject to, or
required by, this Agreement remain unsold at the end of the period during which
the Company is obligated to use its best efforts to maintain the effectiveness
of such registration statement, the Company may file a post-effective amendment
to the registration statement for the purpose of removing such securities from
registered status.
4.3. Furnish to each Selling Holder of Registrable Securities,
without charge, such numbers of copies of the registration statement, any pre-
effective or post-effective amendment thereto, the prospectus, including each
preliminary prospectus and any amendments or supplements thereto, in each case
in conformity with the requirements of the Securities Act and the rules
thereunder, and such other related documents as any such Selling Holder may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by such Selling Holder.
4.4. Use the Company's best efforts (i) to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such states or jurisdictions as shall be reasonably requested
by the Underwriters' Representative or Agent (as applicable, or if inapplicable,
the Majority Selling Holders or the Initiating Substantial Holder, as the case
may be), and (ii) to obtain the withdrawal of any order suspending the
effectiveness of a registration statement, or the lifting of any suspension of
the qualification (or exemption from qualification) of the offer and transfer of
any of the Registrable Securities in any jurisdiction, at the earliest possible
moment; provided, however, that the Company shall not be required in connection
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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.
4.5. In the event of any underwritten or agented offering, enter into
and perform the Company's obligations under an underwriting or agency agreement
(including indemnification and contribution obligations of underwriters or
agents), in usual and customary form, with the managing underwriter or
underwriters of or agents for such offering. The Company shall also cooperate
with the Majority Selling Holders or Initiating Substantial Holder, as the case
may be, and the Underwriters' Representative or Agent for such offering in the
marketing of the Registerable
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Shares, including making available the Company's officers, accountants, counsel,
premises, books and records for such purpose, but the Company shall not be
required to incur any material out-of-pocket expense pursuant to this sentence.
4.6. Promptly notify each Selling Holder of any stop order issued or
threatened to be issued by the Commission in connection therewith (and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered).
4.7. Make generally available to the Company's security holders copies
of all periodic reports, proxy statements, and other information referred to in
Section 10.1 and an earnings statement satisfying the provisions of Section
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11(a) of the Securities Act no later than 90 days following the end of the 12-
month period beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of each registration statement filed
pursuant to this Agreement.
4.8. Make available for inspection by any Selling Holder, any
underwriter participating in such offering, any Agent in an agented offering and
the representatives of such Selling Holder, underwriter or Agent (but not more
than one firm of counsel to such Selling Holders), all financial and other
information as shall be reasonably requested by them, and provide the Selling
Holder, any underwriter participating in such offering, any Agent in an agented
offering and the representatives of such Selling Holder, underwriter or Agent
the opportunity to discuss the business affairs of the Company with its
executive officers and independent public accountants who have certified the
audited financial statements included in such registration statement, in each
case all as necessary to enable them to exercise their due diligence
responsibility under the Securities Act; provided, however, that information
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that the Company determines, in good faith, to be confidential and which the
Company advises such Person in writing is confidential shall not be disclosed
unless such Person signs a confidentiality agreement reasonably satisfactory to
the Company or the related Selling Holder of Registrable Securities agrees to be
responsible for such Person's breach of confidentiality on terms reasonably
satisfactory to the Company.
4.9. Use the Company's best efforts to obtain a so-called "comfort
letter" from its independent public accountants, and legal opinions of counsel
to the Company addressed to the Selling Holders, any underwriter or any Agent,
in customary form and covering such matters of the type customarily covered by
such letters, and in a form that shall be reasonably satisfactory to the
Majority Selling Holders or the Initiating Substantial Holder, as the case be.
The Company shall furnish to each Selling Holder, underwriter or Agent a signed
counterpart of any such comfort letter or legal opinion. Delivery of any such
opinion or comfort letter shall be subject to the recipient
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furnishing such written representations or acknowledgments as are customarily
provided by selling stockholders, underwriters or agents who receive such
comfort letters or opinions.
4.10. Provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities covered by such registration statement
from and after a date not later than the effective date of such registration
statement.
4.11. Use all reasonable efforts to cause the Registrable Securities
covered by such registration statement (i) if the Common Stock is then listed on
a securities exchange or included for quotation in a recognized trading market,
to continue to be so listed or included for a reasonable period of time after
the offering, and (ii) to be registered with or approved by such other United
States or state governmental agencies or authorities as may be necessary by
virtue of the business and operations of the Company to enable the Selling
Holders of Registrable Securities to consummate the disposition of such
Registrable Securities.
4.12. Use the Company's reasonable efforts to provide a CUSIP number
for the Registrable Securities prior to the effective date of the first
registration statement including Registrable Securities.
4.13. Take such other actions as are reasonably required in order to
expedite or facilitate the disposition of Registrable Securities included in
each such registration.
Section 5. Holders' Obligations. It shall be a condition precedent to
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the obligations of the Company to take any action pursuant to this Agreement
with respect to the Registrable Securities of any Selling Holder of Registrable
Securities that such Selling Holder shall:
5.1. Furnish to the Company such information regarding such Selling
Holder, the number of the Registrable Securities owned by it, and the intended
method of disposition of such securities as shall be required to effect the
registration of such Selling Holder's Registrable Securities, and to cooperate
with the Company in preparing such registration; and
5.2. Agree to sell their Registrable Securities to the underwriters at
the same price and on substantially the same terms and conditions as the Company
or the other Persons on whose behalf the registration statement was being filed
have agreed to sell their securities, and to execute the underwriting agreement
agreed to by the Majority Selling Holders (in the case of a registration under
Section 2) or the Company and the Majority Selling Holders (in the case of a
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registration under Section 3).
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Section 6. Expenses of Registration. Expenses in connection with
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registrations pursuant to this Agreement shall be allocated and paid as follows:
6.1. With respect to each Demand Registration and Shelf Registration,
the Selling Holders shall proportionately bear and pay all expenses incurred in
connection with any registration, filing, or qualification of Registrable
Securities with respect to such Demand Registrations or Shelf Registrations
(which right may be assigned to any Person to whom Registrable Securities are
Transferred as permitted by Section 8), including all registration, filing and
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National Association of Securities Dealers, Inc. fees, all fees relating to
listing the Registrable Securities on the national securities exchange (or
including the Registrable Securities for quotation on the trading market) on
which the Common Stock is then listed (or quoted), all fees and expenses of
complying with state securities or blue sky laws, all word processing,
duplicating and printing expenses, messenger and delivery expenses, the
reasonable fees and disbursements of counsel for the Company, and of the
Company's independent public accountants, including the expenses of "cold
comfort" letters required by or incident to such performance and compliance, and
the reasonable fees and disbursements of one firm of counsel for the Selling
Holders of Registrable Securities (selected by Demanding Holders owning a
majority of the Registrable Securities owned by Demanding Holders to be included
in a Demand Registration or by the Initiating Substantial Holder, as the case
may be) (the "Registration Expenses").
---------------------
6.2. The Company shall bear and pay all Registration Expenses incurred
in connection with any Piggyback Registrations pursuant to Section 3 for each
---------
Selling Holder (which right may be Transferred to any Person to whom Registrable
Securities are Transferred as permitted by Section 8), but excluding
---------
underwriting discounts and commissions relating to Registrable Securities (which
shall be paid on a pro rata basis by the Selling Holders of Registrable
Securities).
6.3. Any failure of the Company to pay any Registration Expenses as
required by Section 6.2 shall not relieve the Company of its obligations under
-----------
this Agreement.
Section 7. Indemnification; Contribution. If any Registrable
-----------------------------
Securities are included in a registration statement under this Agreement:
7.1. To the extent permitted by applicable law, the Company shall
indemnify and hold harmless each Selling Holder, each Person, if any, who
controls such Selling Holder within the meaning of the Securities Act, and each
officer, director, partner, employee and agent of such Selling Holder and such
controlling Person, against any and all losses, claims, damages, liabilities and
expenses (joint or several), including attorneys' fees and disbursements and
expenses of investigation, incurred by
-13-
such party pursuant to any actual or threatened action, suit, proceeding or
investigation, or to which any of the foregoing Persons may become subject under
the Securities Act, the Exchange Act or other federal or state laws, insofar as
such losses, claims, damages, liabilities and expenses arise out of or are based
upon any of the following statements, omissions or violations (collectively a
"Violation"):
---------
(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 the Company of the
Securities Act, the Exchange Act, any applicable state securities law or any
rule or regulation promulgated under the Securities Act, the Exchange Act or any
applicable state securities law;
provided, however, that the indemnification required by this Section 7.1 shall
-------- ------- -----------
not apply to amounts paid in settlement of any such loss, claim, damage,
liability or expense if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or expense 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 to the Company by the indemnified party expressly for use in
connection with such registration. The Company shall also indemnify
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in the distribution, their officers, directors,
agents and employees and each Person who controls such Persons (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
to the same extent as provided above with respect to the indemnification of the
Selling Holders; provided, however, that the indemnity agreement contained in
-------- -------
this Section 7.1 shall not apply to any underwriter to the extent that any such
-----------
loss is based on or arises out of an untrue statement or alleged untrue
statement of a material fact, or an omission or alleged omission to state a
material fact, included in or omitted from any preliminary prospectus if the
final prospectus shall correct such untrue statement or alleged untrue
statement, or such omission or alleged omission, and a copy of the final
prospectus has not been sent or given to a purchaser of a Registrable Security
subject to such registration at or prior to the confirmation of sale to such
Person if such underwriter was under an obligation to deliver such final
prospectus and failed to do so.
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7.2. To the extent permitted by applicable law, each Selling Holder
shall indemnify and hold harmless the Company, each of its directors, each of
its officers who shall have signed the registration statement, each Person, if
any, who controls the Company within the meaning of the Securities Act, any
other Selling Holder, any controlling Person of any such other Selling Holder
and each officer, director, partner, employee and agent of such other Selling
Holder and such controlling Person, against any and all losses, claims, damages,
liabilities and expenses (joint and several), including attorneys' fees and
disbursements and expenses of investigation, incurred by such party pursuant to
any actual or threatened action, suit, proceeding or investigation, or to which
any of the foregoing Persons may otherwise become subject under the Securities
Act, the Exchange Act or other federal or state laws, insofar as such losses,
claims, damages, liabilities and expenses 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 conformity with written information
furnished by such Selling Holder expressly for use in connection with such
registration; provided, however, that (x) the indemnification required by this
-------- -------
Section 7.2 shall not apply to amounts paid in settlement of any such loss,
-----------
claim, damage, liability or expense if settlement is effected without the
consent of the relevant Selling Holder of Registrable Securities, which consent
shall not be unreasonably withheld, and (y) in no event shall the amount of any
indemnity under this Section 7.2 exceed the gross proceeds from the applicable
-----------
offering received by such Selling Holder.
7.3. Promptly after receipt by an indemnified party under this Section
-------
7 of notice of the commencement of any action, suit, proceeding, investigation
-
or threat thereof made in writing for which such indemnified party may make a
claim under this Section 7, such indemnified party shall 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 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 disbursements 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 following the commencement of any such action, if
materially prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
-------
7 but shall not relieve the indemnifying party of any liability that it may have
-
to any indemnified party otherwise than pursuant to this Section 7. Any fees and
---------
expenses incurred
-15-
by the indemnified party (including any fees and expenses incurred in connection
with investigating or preparing to defend such action or proceeding) shall be
paid to the indemnified party, as incurred, within thirty (30) days of written
notice thereof to the indemnifying party (regardless of whether it is ultimately
determined that an indemnified party is not entitled to indemnification
hereunder). Any such indemnified party shall have the right to employ separate
counsel in any such action, claim or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be the expenses
of such indemnified party unless (i) the indemnifying party has agreed to pay
such fees and expenses or (ii) the indemnifying party shall have failed to
promptly assume the defense of such action, claim or proceeding or (iii) the
named parties to any such action, claim or proceeding (including any impleaded
parties) include both such indemnified party and the indemnifying party, and
such indemnified party shall have been advised by counsel that there may be one
or more legal defenses available to it which are different from or in addition
to those available to the indemnifying party and that the assertion of such
defenses would create a conflict of interest such that counsel employed by the
indemnifying party could not faithfully represent the indemnified party (in
which case, if such indemnified party notifies the indemnifying party in writing
that it elects to employ separate counsel at the expense of the indemnifying
party, the indemnifying party shall not have the right to assume the defense of
such action, claim or proceeding on behalf of such indemnified party, it being
understood, however, that the indemnifying party shall not, in connection with
any one such action, claim or proceeding or separate but substantially similar
or related actions, claims or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (together with
appropriate local counsel) at any time for all such indemnified parties, unless
in the reasonable judgment of such indemnified party a conflict of interest may
exist between such indemnified party and any other of such indemnified parties
with respect to such action, claim or proceeding, in which event the
indemnifying party shall be obligated to pay the fees and expenses of such
additional counsel or counsels). No indemnifying party shall be liable to an
indemnified party for any settlement of any action, proceeding or claim without
the written consent of the indemnifying party, which consent shall not be
unreasonably withheld.
7.4. If the indemnification required by this Section 7 from the
---------
indemnifying party is unavailable to an indemnified party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to in this
Section 7:
---------
(i) The indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses,
-16-
claims, damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified parties in
connection with the actions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of such indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether any Violation has been
committed by, or relates to information supplied by, such indemnifying party or
indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such Violation. The amount
paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject
to the limitations set forth in Section 7.1 and Section 7.2, any legal or other
----------- -----------
fees or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
(ii) The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 7.4 were determined by pro rata
-----------
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in Section 7.4(i). No Person guilty of
--------------
fraudulent misrepresentation (within the meaning of Section 11(f) of the
-------------
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.
7.5. If indemnification is available under this Section 7, the
---------
indemnifying parties shall indemnify each indemnified party to the full extent
provided in this Section 7 without regard to the relative fault of such
---------
indemnifying party or indemnified party or any other equitable consideration
referred to in Section 7.4.
-----------
7.6. The obligations of the Company and the Selling Holders of
Registrable Securities under this Section 7 shall survive the completion of any
---------
offering of Registrable Securities pursuant to a registration statement under
this Agreement, and otherwise.
Section 8. Transfer of Registration Rights. Rights with respect to
-------------------------------
Registrable Securities may be Transferred as follows: (i) the rights of a
Substantial Holder to require a Shelf Registration pursuant to Section 2.2 may
-----------
be Transferred to any Person in connection with the Transfer to such Person by
such Substantial Holder of a number of Registrable Securities equal to 25% or
more of the Registrable Securities outstanding on the date of this Agreement,
(ii) all other rights of a Holder with respect to Registrable Securities
pursuant to this Agreement may be Transferred by such Holder to any Person in
connection with the Transfer of Registrable Securities to such Person, in all
cases, if (x) any such Transferee that is not a party to this Agreement shall
have executed and delivered to the Secretary of the Company
-17-
a properly completed agreement substantially in the form of Exhibit A, and (y)
---------
the Transferor shall have delivered to the Secretary of the Company, no later
than 15 days following the date of the Transfer, written notification of such
Transfer setting forth the name of the Transferor, name and address of the
Transferee, and the number of Registrable Securities which shall have been so
Transferred and (iii) the Trustee shall have such rights and obligations as a
Holder as set forth in the definition of Holder in Section 1.1.
-----------
Section 9. Holdback. Except in the case of a Shelf Registration, each
--------
Holder entitled pursuant to this Agreement to have Registrable Securities
included in a registration statement prepared pursuant to this Agreement, if so
requested by the Underwriters' Representative or Agent in connection with an
offering of any Registrable Securities, shall not effect any public sale or
distribution of shares of Common Stock or any securities convertible into or
exchangeable or exercisable for shares of Common Stock, including a sale
pursuant to Rule 144 under the Securities Act (except as part of such
underwritten or agented registration), during the five business day period prior
to, and during the 90-day period beginning on, the date such registration
statement is declared effective under the Securities Act by the Commission,
provided that such Holder is timely notified of such effective date in writing
--------
by the Company or such Underwriters' Representative or Agent.
Section 10. Covenants of the Company. The Company hereby agrees and
------------------------
covenants as follows:
10.1. The Company shall file as and when applicable, on a timely
basis, all reports required to be filed by it under the Exchange Act. If the
Company is not required to file reports pursuant to the Exchange Act, upon the
request of any Holder of Registrable Securities, the Company shall make publicly
available the information specified in subparagraph (c)(2) of Rule 144 of the
Securities Act, and take such further action as may be reasonably required from
time to time and as may be within the reasonable control of the Company, to
enable the Holders to Transfer Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by Rule 144
under the Securities Act or any similar rule or regulation hereafter adopted by
the Commission.
10.2. (i) The Company shall not, and shall not permit its majority
owned subsidiaries to, effect any public sale or distribution of any shares of
Common Stock or any securities convertible into or exchangeable or exercisable
for shares of Common Stock, during the five business days prior to, and during
the 90-day period beginning on, the commencement of a public distribution of the
Registrable Securities pursuant to any registration statement prepared pursuant
to this Agreement (other than by the Company pursuant to such registration if
the
-18-
registration is pursuant to Section 3). The Company shall not effect any
---------
registration of its securities (other than on Form ▇-▇, ▇▇▇▇ ▇-▇, or any
successor forms to such forms or pursuant to such other registration rights
agreements as may be approved in writing by the Majority Selling Holders or the
Initiating Substantial Holder, as the case may be), or effect any public or
private sale or distribution of any of its securities, including a sale pursuant
to Regulation D under the Securities Act, whether on its own behalf or at the
request of any holder or holders of such securities from the date of a request
for a Demand Registration pursuant to Section 2.1 until the earlier of (x) 90
-----------
days following the date as of which all securities covered by such Demand
Registration Statement shall have been Transferred, and (y) 90 days following
the effective date of such Demand Registration statement, unless the Company
shall have previously notified in writing all Selling Holders of the Company's
desire to do so, and either Selling Holders owning a majority of the Registrable
Securities or the Underwriters' Representative, if any, shall have consented
thereto in writing.
(ii) Any agreement entered into after the date of this Agreement
pursuant to which the Company or any of its majority owned subsidiaries issues
or agrees to issue any privately placed securities similar to any issue of the
Registrable Securities (other than (x) shares of Common Stock pursuant to a
stock incentive, stock option, stock bonus, stock purchase or other employee
benefit plan of the Company approved by its Board of Directors, and (y)
securities issued to Persons in exchange for ownership interests in any Person
in connection with a business combination in which the Company or any of its
majority owned subsidiaries is a party) shall contain a provision whereby
holders of such securities agree not to effect any public sale or distribution
of any such securities during the periods described in the first sentence of
Section 10.2(i), in each case including a sale pursuant to Rule 144 under the
---------------
Securities Act (unless such Person is prevented by applicable statute or
regulation from entering into such an agreement).
10.3. The Company shall not, directly or indirectly, (x) enter into
any merger, consolidation or reorganization in which the Company shall not be
the surviving corporation or (y) Transfer or agree to Transfer all or
substantially all the Company's assets, unless prior to such merger,
consolidation, reorganization or asset Transfer, the surviving corporation or
the Transferee, respectively, shall have agreed in writing to assume the
obligations of the Company under this Agreement, and for that purpose references
hereunder to "Registrable Securities" shall be deemed to include the securities
which the Holders of Registrable Securities would be entitled to receive in
exchange for Registrable Securities pursuant to any such merger, consolidation
or reorganization.
10.4. The Company shall not grant to any Person (other than a Holder
of Registrable Securities) any registration rights
-19-
with respect to securities of the Company, or enter into any agreement, that
would entitle the holder thereof to have securities owned by it included in a
Demand Registration or Shelf Registration.
Section 11. Amendment, Modification and Waivers; Further Assurances.
--------------------------------------------------------
(i) This Agreement may be amended only if the Company shall have
obtained the written consent of Holders owning Registrable Securities possessing
a majority in number of the Registrable Securities then outstanding to such
amendment.
(ii) No waiver of any terms or conditions of this Agreement shall
operate as a waiver of any other breach of such terms and conditions or any
other term or condition, nor shall any failure to enforce any provision hereof
operate as a waiver of such provision or of any other provision hereof. No
written waiver hereunder, unless it by its own terms explicitly provides to the
contrary, shall be construed to effect a continuing waiver of the provisions
being waived and no such waiver in any instance shall constitute a waiver in any
other instance or for any other purpose or impair the right of the party against
whom such waiver is claimed in all other instances or for all other purposes to
require full compliance with such provision.
(iii) Each of the parties hereto shall execute all such further
instruments and documents and take all such further action as any other party
hereto may reasonably require in order to effectuate the terms and purposes of
this Agreement.
Section 12. Assignment; Benefit. This Agreement and all of the
-------------------
provisions hereof shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, assigns, executors, administrators or
successors; provided, however, that except as specifically provided herein with
-------- -------
respect to certain matters, neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned or delegated by the Company
without the prior written consent of Holders owning Registrable Securities
possessing a majority in number of the Registrable Securities outstanding on the
date as of which such delegation or assignment is to become effective. A Holder
may Transfer its rights hereunder to a successor in interest to the Registrable
Securities owned by such assignor only as permitted by Section 8.
---------
Section 13. Miscellaneous.
-------------
13.1. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York, without giving
regard to the conflict of laws principles thereof.
-20-
13.2. Notices. All notices and requests given pursuant to this
-------
Agreement shall be in writing and shall be made by hand-delivery, first-class
mail (registered or certified, return receipt requested), confirmed facsimile or
overnight air courier guaranteeing next business day delivery to the following:
If to IPS, to:
First Data Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to the Company, to:
MoneyGram Payment Systems, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
or in the case of Transferees, to the address contained in the agreement in the
form of Exhibit A whereby such party became bound by the provisions of this
---------
Agreement. Except as otherwise provided in this Agreement, the date of each such
notice and request shall be deemed to be, and the date on which each such notice
and request shall be deemed given shall be: at the time delivered, if personally
delivered or mailed; when receipt is acknowledged, if sent by facsimile; and the
next business day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next business day delivery.
13.3. Entire Agreement; Integration. This Agreement supersedes all
-----------------------------
prior agreements between or among any of the parties hereto with respect to the
subject matter contained herein, and embodies the entire understanding among the
parties relating to such subject matter.
13.4. Injunctive Relief. Each of the parties hereto acknowledges that
-----------------
in the event of a breach by any of them of any material provision of this
Agreement, the aggrieved party may be without an adequate remedy at law. Each of
the parties therefore agrees that in the event of such a breach hereof the
aggrieved party may elect to institute and prosecute proceedings in any court of
competent jurisdiction to enforce specific performance or to enjoin the
continuing breach hereof. By seeking or obtaining any such relief, the aggrieved
party shall not be precluded from seeking or obtaining any other relief to which
it may be entitled.
-21-
13.5. Section Headings. Section headings are for convenience of
----------------
reference only and shall not affect the meaning of any provision of this
Agreement.
13.6. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, and all of which shall
together constitute one and the same instrument. All signatures need not be on
the same counterpart.
13.7. Severability. If any provision of this Agreement shall be
------------
invalid or unenforceable, such invalidity or unenforceability shall not affect
the validity and enforceability of the remaining provisions of this Agreement,
unless the result thereof would be unreasonable, in which case the parties
hereto shall negotiate in good faith as to appropriate amendments hereto.
13.8. Filing. A copy of this Agreement and of all amendments thereto
------
shall be filed at the principal executive office of the Company with the
corporate recorder of the Company.
13.9. Termination. This Agreement may be terminated at any time by a
-----------
written instrument signed by the parties hereto. Unless sooner terminated in
accordance with the preceding sentence, this Agreement (other than Section 7
---------
hereof) shall terminate in its entirety on such date as there shall be no
Registrable Securities outstanding, provided that any shares of Common Stock
--------
previously subject to this Agreement shall not be Registrable Securities
following the sale of any such shares in an offering registered pursuant to this
Agreement.
13.10. Attorneys' Fees. In any action or proceeding brought to enforce
---------------
any provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the successful party shall be entitled to recover
reasonable attorneys' fees (including any fees incurred in any appeal) in
addition to its costs and expenses and any other available remedy.
13.11. No Third Party Beneficiaries. Nothing herein expressed or
----------------------------
implied is intended to confer upon any person, other than the parties hereto,
their respective permitted assigns (including, if applicable, the Trustee),
successors, heirs and legal representatives or any Person entitled to
indemnification or contribution under Section 7, any rights, remedies,
---------
obligations or liabilities under or by reason of this Agreement.
-22-
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first written above.
MONEYGRAM PAYMENT SYSTEMS, INC.
By:
----------------------------
Name:
Title:
INTEGRATED PAYMENT SYSTEMS INC.
By:
----------------------------
Name:
Title:
-23-