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Q COMM INTERNATIONAL, INC.
 
REGISTRATION RIGHTS AGREEMENT
 
 
December 19, 2005
 
 
 
 
 
 
 
 
 
 
 

 
 
 

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TABLE OF CONTENTS

 

   
Page
           
Section 1
Definitions
1
         
1.1
Certain Definitions
1
       
Section 2
Registration Rights
3
         
2.1
Company Registration
3
 
2.2
Registration on Form S-3
4
 
2.3
Expenses of Registration
6
 
2.4
Registration Procedures
6
 
2.5
Indemnification
7
 
2.6
Information by Holder
9
 
2.7
Restrictions on Transfer
9
 
2.8
Rule 144 Reporting
11
 
2.9
Delay of Registration
11
 
2.10
Transfer or Assignment of Registration Rights
11
 
2.11
Limitations on Subsequent Registration Rights
11
 
2.12
Termination of Registration Rights
12
       
Section 3
Miscellaneous
12
         
3.1
Amendment
12
 
3.2
Notices
12
 
3.3
Governing Law
13
 
3.4
Successors and Assigns
13
 
3.5
Entire Agreement
13
 
3.6
Delays or Omissions
13
 
3.7
Severability
13
 
3.8
Titles and Subtitles
13
 
3.9
Counterparts
13
 
3.10
Telecopy Execution and Delivery
13
 
3.11
Jurisdiction; Venue
14
 
3.12
Further Assurances
14
 
3.13
Attorneys’ Fees
14
 
3.14
Aggregation
14
 
3.15
Obligation of Company
14

 
 
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Q COMM INTERNATIONAL, INC.
 

REGISTRATION RIGHTS AGREEMENT
 
 
This Registration Rights Agreement (this “Agreement”) is made and entered into
as of December 19, 2005, by and among Q Comm International, Inc., a Utah
corporation (the “Company”), and the persons and entities (each, an “Investor”
and collectively, the “Investors”) listed on Exhibit A hereto. Unless otherwise
defined herein, capitalized terms used in this Agreement have the meanings
ascribed to them in Section 1.
 
RECITALS
 
Whereas the Company has sold Shares of the Company’s Common Stock to the
Investors listed on Exhibit A hereto pursuant to the Purchase Agreements; and
 
Whereas, in connection with the sale of these Shares, the Company desires to
grant registration rights to the Investors, which will allow the Investors to
resell the shares in the public market upon certain conditions;
 
NOW, THEREFORE: In consideration of the mutual promises and covenants set forth
herein, and other consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
Section 1
Definitions
 
1.1    Certain Definitions. As used in this Agreement, the following terms shall
have the meanings set forth below:
 
(a)    “Commission” shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.
 
(b)    “Common Stock” means the Common Stock of the Company.
 
(c)    “Exchange Act” shall mean the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
 
(d)    “Holder” shall mean any Investor who holds Registrable Securities and any
holder of Registrable Securities to whom the registration rights conferred by
this Agreement have been duly and validly transferred in accordance with Section
2.10 of this Agreement.
 
(e)    “Indemnified Party” shall have the meaning set forth in Section 2.5(c)
hereto.
 
(f)    “Indemnifying Party” shall have the meaning set forth in Section 2.5(c)
hereto.
 
(g)    “Investors” shall mean the persons and entities listed on Exhibit A
hereto.

 
 
 

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(h)    “Purchase Agreements” shall mean the Stock Purchase Agreements, dated the
same date as this Agreement, that have been entered into severally between the
Company and each of the Investors.
 
(i)    “Registrable Securities” shall mean (i) shares of Common Stock issued
pursuant to the Purchase Agreements and (ii) any Common Stock issued as a
dividend or other distribution with respect to or in exchange for or in
replacement of the shares referenced in (i) above; provided, however, that
Registrable Securities shall not include any shares of Common Stock described in
clause (i) or (ii) above which have previously been registered or which have
been sold to the public either pursuant to a registration statement or Rule 144,
or which have been sold in a private transaction in which the transferor’s
rights under this Agreement are not validly assigned in accordance with this
Agreement.
 
(j)    The terms “register,” “registered” and “registration” shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement.
 
(k)    “Registration Expenses” shall mean all expenses incurred in effecting any
registration pursuant to this Agreement, including, without limitation, all
registration, qualification, and filing fees, printing expenses, escrow fees,
blue sky fees and expenses, and expenses of any regular or special audits
incident to or required by any such registration, but shall not include Selling
Expenses and the compensation of regular employees of the Company.
 
(l)    “Restricted Securities” shall mean any Registrable Securities required to
bear the legend set forth in Section 2.7(c) hereof.
 
(m)    “Rule 144” shall mean Rule 144 as promulgated by the Commission under the
Securities Act, as such Rule may be amended from time to time, or any similar
successor rule that may be promulgated by the Commission.
 
(n)    “Rule 145” shall mean Rule 145 as promulgated by the Commission under the
Securities Act, as such Rule may be amended from time to time, or any similar
successor rule that may be promulgated by the Commission
 
(o)    “Securities Act” shall mean the Securities Act of 1933, as amended, or
any similar successor federal statute and the rules and regulations thereunder,
all as the same shall be in effect from time to time.
 
(p)    “Selling Expenses” shall mean all underwriting discounts, selling
commissions, and stock transfer taxes applicable to the sale of Registrable
Securities and fees and disbursements of counsel for any Holder.
 
(q)    “Shares” shall mean the shares of Common Stock held by the Investors.

 
 
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Section 2
 
Registration Rights
 
2.1    Company Registration
 

 
(a)    Company Registration. If the Company shall determine to register any of
its securities either for its own account or the account of a security holder or
holders, other than a registration pursuant to Section 2.2 herein, a
registration relating solely to employee benefit plans, a registration relating
to the offer and sale of debt securities, a registration relating to a corporate
reorganization or other Rule 145 transaction, or a registration on any
registration form that does not permit secondary sales, the Company will:
 
(i)    promptly give written notice of the proposed registration to all Holders;
and
 
(ii)    use its reasonable best efforts to include in such registration (and any
related qualification under blue sky laws or other compliance), except as set
forth in Section 2.1(b) below, and in any underwriting involved therein, all of
such Registrable Securities as are specified in a written request or requests
made by any Holder or Holders received by the Company within fifteen (15) days
after such written notice from the Company is mailed or delivered. Such written
request may specify all or a part of a Holder’s Registrable Securities for
inclusion in such registration.
 
(b)    Underwriting. If the registration of which the Company gives notice is
for a registered public offering involving an underwriting, the Company shall so
advise the Holders as a part of the written notice given pursuant to
Section 2.1(a)(i). In such event, the right of any Holder to registration
pursuant to this Section 2.1 shall be conditioned upon such Holder’s
participation in such underwriting and the inclusion of such Holder’s
Registrable Securities in the underwriting to the extent provided herein. All
Holders proposing to distribute their securities through such underwriting shall
(together with the Company and the other holders of securities of the Company
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in customary form with the representative of the
underwriter or underwriters selected by the Company.
 
Notwithstanding any other provision of this Section 2.1, if the underwriters
advise the Company in writing that marketing factors require a limitation on the
number of shares to be underwritten, the underwriters may (subject to the
limitations set forth below) limit the number of Registrable Securities to be
included in the registration and underwriting. The Company shall so advise all
holders of securities requesting registration, and the number of shares of
securities that are entitled to be included in the registration and underwriting
shall be allocated, as follows: (i) first, to the Company for securities being
sold for its own account, (ii) second, to the Holders requesting to include
Registrable Securities in such registration statement based on the pro rata
percentage of Registrable Securities held by such Holders, (iii) third, to the
other selling stockholders requesting to include other shares in such
registration statement based on the pro rata percentage of other shares held by
such other selling stockholders. If a person who has requested inclusion in such
registration as provided above does not agree to the terms of any such
underwriting, such person shall also be excluded therefrom by written notice
from the Company or the underwriter. Any Registrable Securities or other
securities excluded or withdrawn from such underwriting shall also be withdrawn
from such registration. If shares are so withdrawn from the registration and if
the number of shares of Registrable Securities to be included in such
registration was previously reduced as a result of marketing factors pursuant to
Section 2.1(b), the Company shall then offer to all persons who have retained
the right to include securities in the registration the right to include
additional securities in the registration in an aggregate amount equal to the
number of shares so withdrawn, with such shares to be allocated among the
persons requesting additional inclusion in the manner set forth above.

 
 
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(c)    Right to Terminate Registration. The Company shall have the right to
terminate or withdraw any registration initiated by it under this Section 2.1
prior to the effectiveness of such registration, whether or not any Holder has
elected to include securities in such registration.
 
2.2    Registration on Form S-3
 
(a)    Request for Form S-3 Registration. The Company shall use its reasonable
best efforts to qualify itself to register it securities on Form S-3 or any
comparable or successor form or forms of the Commission. Subject to the
conditions set forth in this Section 2.2, if the Company shall receive from a
Holder or Holders of Registrable Securities a written request that the Company
effect any registration on Form S-3 or any similar short form registration
statement with respect to all or part of the Registrable Securities (with such
request stating the number of shares of Registrable Securities to be disposed of
and the intended methods of disposition of such shares by such Holder or
Holders), the Company will:
 
(i)    promptly give written notice of the proposed registration to all other
Holders; and
 
(ii)    as soon as practicable, file and use its reasonable best efforts to
effect such registration (including, without limitation, filing post-effective
amendments, appropriate qualifications under applicable blue sky or other state
securities laws, and appropriate compliance with the Securities Act) and to
permit or facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any Holder or Holders joining in
such request as are specified in a written request received by the Company
within twenty (20) days after such written notice from the Company is mailed or
delivered.
 
If, at the time the Holder(s) make a request for a registration on Form S-3
pursuant to this Section 2.2, the Company does not qualify to use Form S-3
pursuant the qualification requirements of that form (or cannot reasonably be
expected to so qualify within sixty (60) days of such request), then the Company
shall be required to file a registration on Form S-1 or such other form of the
Commission that would allow the Holders to sell the Registrable Securities in a
registered offering. In such instance, all the provisions of this Section 2.2
shall continue to apply to such alternative form of registration.
 
(b)    Limitations on Form S-3 Registration. The Company shall not be obligated
to effect, or take any action to effect, any such registration pursuant to this
Section 2.2:
 
(i)    Prior to one hundred and eighty (180) days from the date of this
Agreement.
 
(ii)    In any particular jurisdiction in which the Company would be required to
execute a general consent to service of process in effecting such registration,
qualification, or compliance, unless the Company is already subject to service
in such jurisdiction and except as may be required by the Securities Act;

 
 
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(iii)    If the Holders, together with the holders of any other securities of
the Company entitled to inclusion in such registration, propose to sell
Registrable Securities and such other securities (if any) on Form S-3 at an
aggregate price to the public of less than Five Hundred Thousand Dollars
($500,000); or
 
(iv)    If, in any twelve-month period, the Company has already effected two (2)
such registrations in such period.
 
(c)    Deferral. If (i) in the good faith judgment of the Board of Directors of
the Company (the “Board”), the filing of a registration statement covering the
Registrable Securities would be materially detrimental to the Company and the
Board concludes, as a result, that it is in the best interests of the Company to
defer the filing of such registration statement at such time, and (ii) the
Company shall furnish to such Holders a certificate signed by the President of
the Company, stating that, in the good faith judgment of the Board, it would be
materially detrimental to the Company for such registration statement to be
filed in the near future and that it is, therefore, in the best interests of the
Company to defer the filing of such registration statement, then the Company
shall have the right to defer such filing for a period of not more than ninety
(90) days after receipt of the request of the Holder or Holders under this
Section 2.2; provided that the Company shall not defer its obligation in this
manner more than once in any twelve-month period.
 
(d)    Underwriting. If the Holder(s) intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2.2
and the Company shall include such information in the written notice given
pursuant to Section 2.2(a)(i). In such event, the right of any Holder to include
all or any portion of its Registrable Securities in such registration pursuant
to this Section 2.2 shall be conditioned upon such Holder’s participation in
such underwriting and the inclusion of such Holder’s Registrable Securities in
such registration to the extent provided herein. The Company shall (together
with all Holders and other persons proposing to distribute their securities
through such underwriting) enter into an underwriting agreement in customary
form with the representative of the underwriter or underwriters selected for
such underwriting by such Holders that hold a majority in interest of the
Registrable Securities to be registered in such registration, which underwriters
are reasonably acceptable to the Company.
 
Notwithstanding any other provision of this Section 2.2, if the underwriters
advise the Initiating Holders in writing that marketing factors require a
limitation on the number of shares to be underwritten, the number of Registrable
Securities and other Shares that may be so included shall be allocated as
follows: (i) first, among all Holders requesting to include Registrable
Securities in such registration statement based on the pro rata percentage of
Registrable Securities held by such Holders; (ii) second, to the Company, for
its own account; and (iii) to other selling stockholders holding other Shares. 
 
If a person who has requested inclusion in such registration as provided above
does not agree to the terms of any such underwriting, such person shall be
excluded therefrom by written notice from the Company, the underwriter, or the
Holder(s). The Registrable Securities or other securities so excluded shall also
be withdrawn from such registration. Any Registrable Securities or other
securities excluded or withdrawn from such underwriting shall also be withdrawn
from such registration. If Shares are so withdrawn from the registration and if
the number of Shares to be included in such registration was previously reduced
as a result of marketing factors pursuant to this Section 2.2(d), then the
Company shall then offer to all Holders who have retained rights to include
securities in the registration the right to include additional Registrable
Securities in the registration in an aggregate amount equal to the number of
shares so withdrawn, with such shares to be allocated among such Holders
requesting additional inclusion, as set forth above.

 
 
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2.3    Expenses of Registration. All Registration Expenses incurred in
connection with registrations pursuant to Sections 2.1 and 2.2 hereof shall be
borne by the Company; provided, however, that the Company shall not be required
to pay for any expenses of any registration proceeding begun pursuant to Section
2.2 if the registration request is subsequently withdrawn at the request of the
Holders of a majority of the Registrable Securities to be registered or because
a sufficient number of Holders shall have withdrawn so that the minimum offering
conditions set forth in Section 2.2 are no longer satisfied (in which case all
participating Holders shall bear such expenses pro rata among each other based
on the number of Registrable Securities requested to be so registered). All
Selling Expenses relating to securities registered on behalf of the Holders
shall be borne by the holders of securities included in such registration pro
rata among each other on the basis of the number of Registrable Securities so
registered.
 
2.4    Registration Procedures. In the case of each registration effected by the
Company pursuant to Section 2, the Company will keep each Holder advised in
writing as to the initiation of each registration and as to the completion
thereof. At its expense, the Company will use its reasonable best efforts to and
as expeditiously as possible:
 
(a)    Keep such registration effective for a period ending on the earlier of
the date which is one hundred twenty (120) days from the effective date of the
registration statement or such time as the Holder or Holders have completed the
distribution described in the registration statement relating thereto; provided,
however, that (i) such 120-day period shall be extended for a period of time
equal to the period the Holder refrains from selling any securities included in
such registration at the request of an underwriter of Common Stock (or other
securities) of the Company; and (ii) in the case of any registration of
Registrable Securities on Form S-3 which are intended to be offered on a
continuous or delayed basis, subject to compliance with applicable SEC rules,
such 120-day period shall be extended for up to 90 days, if necessary, to keep
the registration statement effective until all such Registrable Securities are
sold.
 
(b)    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 with respect to the disposition of all securities covered by such
registration statement for the period set forth in subsection (a) above;
 
(c)    Furnish such number of prospectuses, including any preliminary
prospectuses, and other documents incident thereto, including any amendment of
or supplement to the prospectus, as a Holder from time to time may reasonably
request;
 
(d)    Register and qualify the securities covered by such registration
statement under such other securities or Blue Sky laws of such jurisdiction as
shall be reasonably requested by the Holders; provided, that the Company shall
not be required in connection therewith or as a condition thereto to qualify to
do business or to file a general consent to service of process in any such
states or jurisdictions.

 
 
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(e)    Notify each seller of Registrable Securities covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or incomplete in light of the circumstances then existing, and
following such notification promptly prepare and furnish to such seller a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such shares, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading or incomplete
in light of the circumstances then existing;
 
(f)    Furnish, on the date that such Registrable Securities are delivered to
the underwriters for sale, if such securities are being sold through
underwriters, (i) an opinion, dated as of such date, of the counsel representing
the Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and reasonably satisfactory to a majority in
interest of the Holders requesting registration of Registrable Securities and
(ii) a “comfort” letter dated as of such date, from the independent certified
public accountants of the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters.
 
(g)    Provide a transfer agent and registrar for all Registrable Securities
registered pursuant to such registration statement and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration;
 
(h)    Otherwise comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve
months, but not more than eighteen months, beginning with the first month after
the effective date of the Registration Statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act;
 
(i)    Cause all such Registrable Securities registered pursuant hereunder to be
listed on each securities exchange on which similar securities issued by the
Company are then listed; and
 
(j)    In connection with any underwritten offering pursuant to a registration
statement filed pursuant to Section 2.2 hereof, enter into an underwriting
agreement in form reasonably necessary to effect the offer and sale of Common
Stock, provided such underwriting agreement contains reasonable and customary
provisions.
 
2.5    Indemnification
 
. 

 
 
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(a)    To the extent permitted by law, the Company will indemnify and hold
harmless each Holder, each of its officers, directors and partners, legal
counsel, and accountants and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, with respect to which registration,
qualification, or compliance has been effected pursuant to this Section 2, and
each underwriter, if any, and each person who controls within the meaning of
Section 15 of the Securities Act any underwriter, against all expenses, claims,
losses, damages, and liabilities (or actions, proceedings, or settlements in
respect thereof) arising out of or based on: (i) any untrue statement (or
alleged untrue statement) of a material fact contained or incorporated by
reference in any prospectus, offering circular, or other document (including any
related registration statement, notification, or the like) incident to any such
registration, qualification, or compliance, (ii) 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 (iii) any violation
(or alleged violation) by the Company of the Securities Act, any state
securities laws or any rule or regulation thereunder applicable to the Company
and relating to action or inaction required of the Company in connection with
any offering covered by such registration, qualification, or compliance, and the
Company will reimburse each such Holder, each of its officers, directors,
partners, legal counsel, and accountants and each person controlling such
Holder, each such underwriter, and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating and defending or settling any such claim, loss,
damage, liability, or action; provided that the Company will not be liable in
any such case to the extent that any such claim, loss, damage, liability, or
action arises out of or is based on any untrue statement or omission based upon
written information furnished to the Company by such Holder, any of such
Holder’s officers, directors, partners, legal counsel or accountants, any person
controlling such Holder, such underwriter or any person who controls any such
underwriter and stated to be specifically for use therein; and provided, further
that, the indemnity agreement contained in this Section 2.5(a) shall not apply
to amounts paid in settlement of any such loss, claim, damage, liability, or
action if such settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld).
 
(b)    To the extent permitted by law, each Holder will, if Registrable
Securities held by such Holder are included in the securities as to which such
registration, qualification, or compliance is being effected, indemnify and hold
harmless the Company, each of its directors, officers, partners, legal counsel,
and accountants and each underwriter, if any, of the Company’s securities
covered by such a registration statement, each person who controls the Company
or such underwriter within the meaning of Section 15 of the Securities Act, each
other such Holder, and each of their officers, directors, and partners, and each
person controlling such Holder, against all claims, losses, damages and
liabilities (or actions in respect thereof) arising out of or based on: (i) any
untrue statement (or alleged untrue statement) of a material fact contained or
incorporated by reference in any such registration statement, prospectus,
offering circular, or other document, or (ii) 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 and
such Holders, directors, officers, partners, legal counsel, and accountants,
persons, underwriters, or control persons for any legal or any other expenses
reasonably incurred in connection with investigating or defending any such
claim, loss, damage, liability, or action, 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, offering circular, or other document in reliance upon and in
conformity with written information furnished to the Company by such Holder and
stated to be specifically for use therein; provided, however, that the
obligations of such Holder hereunder shall not apply to amounts paid in
settlement of any such claims, losses, damages, or liabilities (or actions in
respect thereof) if such settlement is effected without the consent of such
Holder (which consent shall not be unreasonably withheld); and provided that in
no event shall any indemnity under this Section 2.5 exceed the net proceeds from
the offering received by such Holder.

 
 
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(c)    Each party entitled to indemnification under this Section 2.5 (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, and shall
permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
be unreasonably withheld), and the Indemnified Party may participate in such
defense at such party’s expense; and 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 Section 2.5, to the extent such
failure is not prejudicial. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party of a release from all liability in respect to such
claim or litigation. Each Indemnified Party shall furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.
 
(d)    If the indemnification provided for in this Section 2.5 is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage, or expense referred to herein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties’ relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
 
(e)    Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in conflict with
the foregoing provisions, the provisions in the underwriting agreement shall
control.
 
2.6    Information by Holder. Each Holder of Registrable Securities shall
furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification, or compliance referred to in this Section 2.
 
2.7    Restrictions on Transfer
 
(a)    The holder of each certificate representing Registrable Securities by
acceptance thereof agrees to comply in all respects with the provisions of this
Section 2.7. Each Holder agrees not to make any sale, assignment, transfer,
pledge or other disposition of all or any portion of the Restricted Securities,
or any beneficial interest therein, unless and until the transferee thereof has
agreed in writing for the benefit of the Company to take and hold such
Restricted Securities subject to, and to be bound by, the terms and conditions
set forth in this Agreement, including, without limitation, this Section 2.7,
except for transfers permitted under Section 2.8(b):

 
 
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(i)    There is then in effect a registration statement under the Securities Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement; or
 
(ii)    Such Holder shall have given prior written notice to the Company of such
Holder’s intention to make such disposition and shall have furnished the Company
with a detailed description of the manner and circumstances of the proposed
disposition, and, if requested by the Company, such Holder shall have furnished
the Company, at its expense, with (i) an opinion of counsel, reasonably
satisfactory to the Company, to the effect that such disposition will not
require registration of such Restricted Securities under the Securities Act or
(ii) a “no action” letter from the Commission to the effect that the transfer of
such securities without registration will not result in a recommendation by the
staff of the Commission that action be taken with respect thereto, whereupon the
holder of such Restricted Securities shall be entitled to transfer such
Restricted Securities in accordance with the terms of the notice delivered by
the Holder to the Company. It is agreed that the Company will not require
opinions of counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
 
(b)    Permitted transfers include (i) a transfer not involving a change in
beneficial ownership, or (ii) in transactions involving the distribution without
consideration of Restricted Securities by any Holder to (x) a parent, subsidiary
or other affiliate of Holder, or (y) any of its partners, members or other
equity owners, or retired partners, retired members or other equity owners, or
to the estate of any of its partners, members or other equity owners or retired
partners, retired members or other equity owners, or (iii) transfers in
compliance with Rule 144(k), as long as the Company is furnished with
satisfactory evidence of compliance with such Rule; provided, in each case, that
the Holder thereof shall give written notice to the Company of such Holder’s
intention to effect such disposition and shall have furnished the Company with a
detailed description of the manner and circumstances of the proposed
disposition.
 
(c)    Each certificate representing Registrable Securities shall (unless
otherwise permitted by the provisions of this Agreement) be stamped or otherwise
imprinted with a legend substantially similar to the following (in addition to
any legend required under applicable state securities laws):
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF CERTAIN
STATES. THESE SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED,
PLEDGED OR HYPOTHECATED EXCEPT AS PERMITTED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS PURSUANT TO REGISTRATION OR AN EXEMPTION THEREFROM. THE ISSUER
OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER
THAT SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION OTHERWISE COMPLIES
WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
 
 

 
 
 
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The Holders consent to the Company making a notation on its records and giving
instructions to any transfer agent of the Restricted Securities in order to
implement the restrictions on transfer established in this Section 2.7.
 
(d)    The legend referring to federal and state securities laws identified in
Section 2.7(c) hereof stamped on a certificate evidencing the Restricted
Securities and the stock transfer instructions and record notations with respect
to such Restricted Securities shall be removed and the Company shall issue a
certificate without such legend to the holder of such Restricted Securities if
(i) such securities are registered under the Securities Act, or (ii) such holder
provides the Company with an opinion of counsel reasonably acceptable to the
Company to the effect that a public sale or transfer of such securities may be
made without registration under the Securities Act, or (iii) such holder
provides the Company with reasonable assurances, that such securities can be
sold pursuant to Section (k) of Rule 144 under the Securities Act.
 
2.8    Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission that may permit the sale of the
Restricted Securities to the public without registration, the Company agrees to
use its reasonable best efforts to:
 
(a)    Make and keep public information regarding the Company available as those
terms are understood and defined in Rule 144 under the Securities Act;
 
(b)    File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
at any time after it has become subject to such reporting requirements; and
 
(c)    So long as a Holder owns any Restricted Securities, furnish to the Holder
forthwith upon written request a written statement by the Company as to its
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 as a Holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing a Holder to sell any such securities without registration.
 
2.9    Delay of Registration. No Holder shall have any right to take any action
to restrain, enjoin, or otherwise delay any registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Agreement.
 
2.10    Transfer or Assignment of Registration Rights. The rights to cause the
Company to register securities granted to a Holder by the Company under this
Agreement may be transferred or assigned by a Holder only to a transferee,
assignee or holder of not less than 40,000 shares of Registrable Securities (as
presently constituted and subject to subsequent adjustments for stock splits,
stock dividends, reverse stock splits, and the like); provided that (i) such
transfer or assignment of Registrable Securities is effected in accordance with
the terms of Section 2.7 hereof and applicable securities laws and (ii) the
transferee or assignee of such rights assumes in writing the obligations of such
Holder under this Agreement.
 
2.11    Limitations on Subsequent Registration Rights. From and after the date
of this Agreement, the Company shall not, without the prior written consent of a
the holders holding at least a majority of the Registrable Securities, enter
into any agreement with any holder or prospective holder of any securities of
the Company giving such holder or prospective holder any registration rights the
terms of which are pari passu with or senior to the registration rights granted
to the Holders hereunder.

 
 
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2.12    Termination of Registration Rights. The right of any Holder to request
registration or inclusion in any registration pursuant to this Agreement shall
terminate on the earlier of: (i) the date on which all shares of Registrable
Securities held any Holder that holds less than 1% of the outstanding capital
stock of the Company may immediately be sold under Rule 144 during any ninety
(90)-day period, or (ii) five (5) years after the date of this Agreement.
 

Section 3
Miscellaneous
 
3.1    Amendment. Except as expressly provided herein, neither this Agreement
nor any term hereof may be amended, waived, discharged or terminated other than
by a written instrument referencing this Agreement and signed by (i) the Company
and (ii) the Investors holding at least a majority of the Registrable Securities
then held by the Investors. Any such amendment, waiver, discharge or termination
effected in accordance with this paragraph shall be binding upon each Investor.
 
3.2    Notices. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by registered or certified
mail, postage prepaid, sent by facsimile or electronic mail or otherwise
delivered by hand or by messenger addressed:
 
(a)    if to an Investor, at the Investor’s address, facsimile number or
electronic mail address as shown in the Company’s records, as may be updated in
accordance with the provisions hereof;
 
(b)    if to any Holder, at such address, facsimile number or electronic mail
address as shown in the Company’s records, or, until any such holder so
furnishes an address, facsimile number or electronic mail address to the
Company, then to and at the address of the last holder of such shares for which
the Company has contact information in its records; or
 
(c)    if to the Company, one copy should be sent to Q Comm International, Inc.,
510 East Technology Avenue, Building C, Orem, Utah 84097; Telephone: (801)
226-4222; Facsimile: (801) 222-9555; Attn: Chief Executive Officer, or at such
other address as the Company shall have furnished to the Investors, with a copy
to Jones Waldo Holbrook McDonough, PC, 170 South Main Street, Suite 1500, Salt
Lake City Utah, 84101; Attn: Ronald S. Poelman.
 
Each such notice or other communication shall for all purposes of this Agreement
be treated as effective or having been given when delivered if delivered
personally, or, if sent by mail, at the earlier of its receipt or 48 hours after
the same has been deposited in a regularly maintained receptacle for the deposit
of the United States mail, addressed and mailed as aforesaid or, if sent by
facsimile, upon confirmation of facsimile transfer or, if sent by electronic
mail, upon confirmation of delivery when directed to the electronic mail address
set forth on the Schedule of Investors.

 
 
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3.3    Governing Law. This Agreement shall be governed in all respects by the
internal laws of the State of Utah as applied to agreements entered into among
Utah residents to be performed entirely within Utah, without regard to
principles of conflicts of law.
 
3.4    Successors and Assigns. This Agreement, and any and all rights, duties
and obligations hereunder, shall not be assigned, transferred, delegated or
sublicensed by any Investor without the prior written consent of the Company.
Any attempt by an Investor without such permission to assign, transfer, delegate
or sublicense any rights, duties or obligations that arise under this Agreement
shall be void. Subject to the foregoing and except as otherwise provided herein,
the provisions of this Agreement shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
 
3.5    Entire Agreement. This Agreement and the exhibits hereto constitute the
full and entire understanding and agreement between the parties with regard to
the subject hereof and supercedes all prior understandings or agreements with
regard to the subject matter hereof.
 
3.6    Delays or Omissions. Except as expressly provided herein, no delay or
omission to exercise any right, power or remedy accruing to any party to this
Agreement upon any breach or default of any other party under this Agreement
shall impair any such right, power or remedy of such non-defaulting party, nor
shall it be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default thereafter
occurring, nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
party of any breach or default under this Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to any party to this Agreement, shall be cumulative and not
alternative.
 
3.7    Severability. If any provision of this Agreement becomes or is declared
by a court of competent jurisdiction to be illegal, unenforceable or void,
portions of such provision, or such provision in its entirety, to the extent
necessary, shall be severed from this Agreement, and such court will replace
such illegal, void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the same
economic, business and other purposes of the illegal, void or unenforceable
provision. The balance of this Agreement shall be enforceable in accordance with
its terms.
 
3.8    Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs and exhibits shall, unless otherwise provided, refer to sections and
paragraphs hereof and exhibits attached hereto.
 
3.9    Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be enforceable against the parties that
execute such counterparts, and all of which together shall constitute one
instrument.

 
 
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3.10    Telecopy Execution and Delivery. A facsimile, telecopy or other
reproduction of this Agreement may be executed by one or more parties hereto and
delivered by such party by facsimile or any similar electronic transmission
device pursuant to which the signature of or on behalf of such party can be
seen. Such execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any party hereto, all parties
hereto agree to execute and deliver an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.
 
3.11    Jurisdiction; Venue. With respect to any disputes arising out of or
related to this Agreement, the parties consent to the exclusive jurisdiction of,
and venue in, the state courts in Salt Lake County in the State of Utah (or in
the event of exclusive federal jurisdiction, the courts of the Northern District
of Utah).
 
3.12    Further Assurances. Each party hereto agrees to execute and deliver, by
the proper exercise of its corporate, limited liability company, partnership or
other powers, all such other and additional instruments and documents and do all
such other acts and things as may be necessary to more fully effectuate this
Agreement.
 
3.13    Attorneys’ Fees. In the event that any suit or action is instituted to
enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing party all fees, costs and expenses
of enforcing any right of such prevailing party under or with respect to this
Agreement, including without limitation, such reasonable fees and expenses of
attorneys and accountants, which shall include, without limitation, all fees,
costs and expenses of appeals.
 
3.14    Aggregation. All shares of Common Stock held or acquired by affiliated
entities or persons of an Investor (including but not limited to: (i) a
constituent partner or a retired partner of an Investor that is a partnership;
(ii) a parent, subsidiary or other affiliate of an Investor that is a
corporation; (iii) an immediate family member living in the same household, a
descendant, or a trust therefore, in the case of an Investor who is an
individual; or (iv) a member of an Investor that is a limited liability company)
shall be aggregated together for the purpose of determining the availability of
any rights under this Agreement which are triggered by the beneficial ownership
of a threshold number of shares of the Company’s capital stock.
 
3.15    Obligation of Company. The Company agrees to use its reasonable best
efforts to enforce the terms of this Agreement, to inform the Investors of any
breach hereof (to the extent the Company has knowledge thereof) and to assist
the Investors in the exercise of their rights and the performance of their
obligations hereunder.
 

 
[Remainder of page intentionally left blank.]

 
 
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IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Registration Rights Agreement effective as of the day and year first above
written.
 

 
 
Q COMM INTERNATIONAL, INC.
 
 
By: _____________________________________
 
Name: Mark Robinson
     
Title: Chief Financial Officer
 
If Investor is an individual
 
________________________________________
 
(Signature)
     
________________________________________
 
(Name of Investor)
       
If Investor is an entity:
________________________________________
 
(Name of Investor)
         
By: _____________________________________
 
(Signature of Authorized Representative)
         
________________________________________
 
(Name of Authorized Representative)
         
________________________________________
 
(Title of Authorized Representative)

 
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EXHIBIT A
 
INVESTORS
 
Pike Capital Partners, L.P.
 
Jurika Family Trust
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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