EXHIBIT 4.5
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of
March 10, 2000 by and among CYBERIAN OUTPOST, INC., a Delaware corporation (the
"Corporation"), and the persons and the entities listed below (each, an
"Investor" and collectively, the "Investors"). The Corporation and the Investors
are sometimes referred to herein collectively as the "Parties" or each
individually as a "Party."
WHEREAS, in connection with the Subscription Agreement of even date
herewith by and among the Parties hereto (the "Subscription Agreement"), the
Corporation has agreed, upon the terms and subject to the conditions of the
Subscription Agreement, to issue and sell to the Investors up to 4,702,900
shares of Common Stock of the Corporation, par value $.01 per share (the
"Shares"); and
WHEREAS, to induce the Investors to execute and deliver the Subscription
Agreement, the Corporation agreed to provide certain registration rights under
the Securities Act (as defined below) and applicable state securities laws.
NOW, THEREFORE, in considerations of the premises and mutual covenants and
obligations hereafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties, intending
to be legally bound, hereby agree as follows:
1. Registration Rights.
1.1 Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
(a) "Additional Issuance Event" shall mean the obligation of the
Corporation, in the event that the shelf registration statement for the
Shares on Form S-3 (if available, otherwise on Form S-1), is not effective
within 180 days after the Closing, on the 181st day following the Closing
and, if such registration statement is still not effective, on the 211th
day following the Closing, to pay to the Investors, pro rata on the basis
of the number of Shares held by an Investor, an amount equal to 5% of the
aggregate purchase price for the Shares, payable, at the option of the
Corporation, in either cash or additional shares of Common Stock. Such
additional shares of Common Stock shall be valued at the lower of (i) the
price at which the Shares were sold to the Investors or (ii) the Current
Market Price.
(b) "Closing" shall mean the date of closing of the offering of the
Shares.
(c) "Commission" shall mean the United States Securities and Exchange
Commission or any other federal agency at the time administering the
Securities Act and the Exchange Act.
(d) "Common Stock" shall mean the Corporation's common stock, $.01 par
value per share.
(e) "Current Market Price" shall mean the trailing ten day average
Closing Price of the Common Stock on the NASDAQ ending two business days
prior to the relevant measurement date.
(f) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar federal statute and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
(g) "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 transferred in compliance with
Section 1.10 hereof.
(h) "Initiating Holders" shall mean any Holder or Holders of at least
(i) thirty percent (30%) of the Registrable Securities, in the aggregate,
and (ii) 500,000 Registrable Securities, in the aggregate; provided however
that if there are outstanding fewer than 1,600,000 Registrable Securities,
in the aggregate, Holders holding 500,000 Registrable Securities, in the
aggregate, shall, for all purposes of this Agreement, be Initiating
Holders.
(i) "Other Stockholders" shall mean persons other than Holders who, by
virtue of agreements with the Corporation, are entitled to include their
securities in certain registrations hereunder.
(j) "Person" means a corporation, a limited liability company, an
association, a partnership, an organization, a business, a trust, an
individual, a governmental or political subdivision thereof or a
governmental agency.
(k) The terms "register," "registered" and "registration" refer to a
registration effected by preparing and filing a Registration Statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such Registration Statement by the Commission.
(l) "Registrable Securities" shall mean (i) all of the Shares, if the
Shelf Registration is not declared effective or its effectiveness lapses,
and (ii) all of the shares of Common Stock delivered by the Corporation to
any Investors by way of any Additional Issuance Event. Registrable
Securities shall cease to be Registrable Securities when they (i) are
freely salable without restriction pursuant to the volume limitation
restriction of Rule 144, (ii) have ceased to be outstanding (whether as a
result of redemption, repurchase and cancellation, conversion or otherwise)
or (iii) have been sold under a Registration Statement.
(m) Registration Expenses" shall mean all expenses, except as
otherwise stated below, incurred by the Corporation in complying with
Sections 1.2 and 1.3 hereof, including, without limitation, all
registration, qualification and filing fees, printing expenses, escrow
fees, fees and disbursements of counsel for the Corporation, reasonable
fees and disbursements of the Holders' Counsel (as hereinafter defined),
"blue sky" fees and expenses and the expense of any special audits incident
to or required by any such registration (but excluding the compensation of
regular employees of the Corporation which shall be paid in any event by
the Corporation). Registration Expenses shall not include Selling Expenses.
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(n) "Registration Rights" shall mean the usual and customary
registration rights, including two demand registration rights if called by
Investors holding more than 30% of the Shares, and unlimited piggyback
registration rights, in the event that the Shelf Registration is not
declared effective or its effectiveness lapses.
(o) "Registration Statement" shall mean any registration statement
which covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the prospectus included therein, all
amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits and all material incorporated by
reference in such Registration Statement.
(p) "Restricted Shares" shall mean the Shares which are held by the
Investors which have not theretofore been sold to the public pursuant to a
registration statement under the Securities Act or pursuant to Rule 144.
(q) "Rule 144" shall mean Rule 144 promulgated under the Securities
Act or any successor rule thereto or any complementary rule thereto (such
as Rule 144A).
(r) "Rule 145" shall mean Rule 145 promulgated under the Securities
Act or any successor rule thereto or any complementary rule thereto.
(s) "Rule 415" shall mean Rule 415 promulgated under the Securities
Act or any successor rule thereto or any complementary rule thereto.
(t) "Securities Act" shall mean the Securities Act of 1933, as
amended, or any similar federal statute and the rules and regulations of
the Commission thereunder, all as the same shall be in effect at the time.
(u) "Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the securities
registered by the Holders and all reasonable fees and disbursements of
counsel for the selling Holders (other than those included in Registration
Expenses).
(v) "Shelf Registration" shall mean the shelf registration statement
for the Shares on Form S-3 (if available, otherwise on Form S-1), which
shall be filed by the Corporation with the Commission as soon as
practicable and shall be declared effective within 180 days after the
Closing.
1.2 Registration on Form S-3.
(a) Shelf Registration. The Corporation shall effect the Shelf
Registration for the Shares. This Shelf Registration shall be filed with
the Commission as soon as practicable, and shall be declared effective
within 180 days after the Closing. Subject to Sections 1.2(d) and 1.3
hereof, such Shelf Registration shall be continuously maintained in effect
for a period not less than two years from the Closing. If necessary, the
Corporation shall cause to be filed, and shall use its best efforts to have
declared effective as soon as practicable following filing, additional
registration statements or amendments as necessary to maintain such
effectiveness for such two-year period.
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(b) Excluded Shares. No Holder may include any of its Shares in the
Shelf Registration unless such Holder furnishes to the Corporation, in
writing, prior to or on the 20th business day after receipt of a request
therefor (the "Questionnaire Deadline") which request shall be made within
15 business days after the date hereof, such information as the Corporation
may reasonably request for use in connection with the Shelf Registration
and in any application to be filed with or under state securities laws. In
connection with all such requests for information from Holders, the
Corporation shall notify such Holders of the requirements set forth in the
preceding sentence. Each Holder as to which the Shelf Registration is being
effected agrees to furnish promptly to the Corporation all information
reasonably required to be disclosed in order to make information previously
furnished to the Corporation by such Holder not materially misleading.
(c) Additional Issuance Event. Should the Shelf Registration not be
declared effective within the 180 day period, the Corporation shall, after
such 180 days, and on the 181st day after the Closing and, if the Shelf
Registration is still not effective, on the 211th day after the Closing,
pay each Investor an amount equal to 5% of the purchase price for the
Shares paid by such Investor, payable, at the option of the Corporation, in
either cash or additional shares of Common Stock of the Corporation. Such
shares of Common Stock shall be valued at the lower of (i) the price the
Shares were sold to the Investor or (ii) the Current Market Price. No
Investor shall be entitled to additional amounts of shares or cash pursuant
to this Section 1.2 (c) unless such Investor (or the Holder of its shares,
if such Investor transferred its Shares) shall have provided all such
reasonably requested information prior to or on the Questionnaire Deadline;
provided that the Corporation has requested such information within 15
business days of the date hereof. If the Corporation is required to issue
any additional shares of Common Stock, the Corporation shall include those
additional shares of Common Stock in the Shelf Registration Statement.
(d) Suspension of Registration. Notwithstanding the foregoing, if the
Corporation shall furnish to the Holders requesting registration, a
certificate signed by the President and Chief Executive Officer of the
Corporation stating that in the good faith judgement of the Board of
Directors of the Corporation, it would be seriously detrimental to the
Corporation and its stockholders for such registration statement to be
filed or to remain effective and it is therefore, essential to defer the
filing of such registration statement or suspend the effectiveness of such
registration statement, the Corporation shall have the right to defer
taking action with respect to such filing or suspend an existing filing for
a period of not more than 45 days (in the aggregate) during any one year
period. The two year period set forth in Section 1.2(a) shall be extended
for an additional number of days equal to the number of days during which
the Holder's right to sell the Shares was suspended pursuant to this
paragraph.
1.3 Additional Registration Rights. Should the Shelf Registration not be
declared effective within 180 days of the Closing or should the Shelf
Registration's effectiveness lapse for any reason while the Corporation has any
obligation to maintain such Shelf Registration other than pursuant to Section
1.2(d), the Investors (other than Investors or Holders excluded from the Shelf
Registration under Section 1.2(b)) shall have Registration Rights, at the
Corporation's expense, which shall include:
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(a) Demand Registration.
(i) Request for Registration. Subject to the terms hereof, the
Initiating Holders may make a demand in writing for registration under
the Securities Act of all or part of their Registrable Securities (the
"Demand Registration"). If the Corporation receives from the
Initiating Holders a written request that the Corporation effect a
registration under the Securities Act of Registrable Securities, the
Corporation will:
(A) promptly give written notice of the proposed
registration to all of the other Holders; and
(B) as soon as reasonably practicable, use its best efforts
to effect such registration (including, without limitation,
appropriate qualification under applicable "blue sky" or other
state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act and any other
governmental requirements or regulations) as would permit or
facilitate the sale and distribution of all of such Registrable
Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any Holder joining
in such request as are specified in a written request received by
the Corporation within 20 business days after such written notice
from the Corporation is mailed or delivered; provided, however,
that the Corporation shall not be obligated to take any action to
effect any such registration pursuant to this Section 1.3(a)(i):
(i) any particular jurisdiction in which the
Corporation would be required to execute a general consent
to service of process in effecting such registration,
qualification or compliance unless the Corporation is
already subject to service in such jurisdiction and except
as may be required by the Securities Act; and
(ii) after the Corporation has effected two (2) such
registrations pursuant to this Section 1.3(a)(i), and such
registrations have been declared or ordered effective.
In the event that a request for registration is made pursuant to this
Section1.3(a)(i) but the Corporation is not obligated to effect such
requested registration by virtue of the foregoing clause (B)(i), such
request shall not be deemed to be a demand for registration for purposes of
this Section 1.3(a)(i). Subject to the foregoing clauses (B)(i) through
(B)(ii), the Corporation shall prepare and file a Registration Statement
covering the Registrable Securities so requested to be registered
immediately after receipt of the request or requests of the Initiating
Holders. The Registration Statement filed pursuant to the request of the
Initiating Holders may, subject to the provisions of Section 1.11 hereof,
include other securities of the Corporation with respect to which
registration rights have been granted.
(iii) Underwriting. If the Initiating Holders intend to
distribute the Registrable Securities covered by their
request by means of an underwriting, they shall so advise
the Corporation as a part of their request made pursuant to
Section 1.3(a)(i) hereof and the Corporation shall include
such information in the written notice referred to in
Section 1.3(a)(i) hereof. In such event, the right of any
Holder to participate in such registration shall be
conditioned upon such Holder's participation in the
underwriting arrangements required by this Section
1.3(a)(i), and the inclusion of such Holder's Registrable
Securities in the underwriting to the extent requested shall
be limited to the extent provided herein.
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If other persons shall request inclusion in any registration pursuant
to Section 1.3(a), the Initiating Holders shall, on behalf of all Holders,
offer to include such securities in the underwriting and may condition such
offer on their acceptance of the further applicable provisions of this
Section 1. The Corporation shall (together with all Holders and other
persons proposing to distribute their securities through such underwriting)
enter into an underwriting agreement in customary form (but subject to the
reasonable approval of the Holders holding a majority of the Registrable
Securities to be included in such underwriting) with the managing
underwriter selected for such underwriting by the Holders holding a
majority of the Registrable Securities to be included in such underwriting,
which managing underwriter shall be reasonably acceptable to the
Corporation. The Corporation and the Holders participating in such
underwriting shall reasonably cooperate with any such underwriter.
Notwithstanding any other provision of this Section 1.3, if the managing
underwriter advises the Initiating Holders in writing that, in its good
faith judgment, marketing factors require a limitation of the number of
shares to be underwritten, then the Corporation shall so advise all
participating Holders and the number of shares of Registrable Securities
that may be included in the registration and underwriting shall be
allocated as set forth in Section 1.11. 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 Corporation, the underwriter or the Initiating
Holders. Any Registrable Securities or other securities excluded 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 1.3(a)(ii), then the Corporation shall offer to
all persons who have retained rights 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 such persons requesting additional
inclusion in accordance with Section 1.11.
If the underwriter has not limited the number of Registrable
Securities to be underwritten, the Corporation may include securities for
its own account (or for the account of other shareholders in accordance
with the terms of this Agreement) in such registration if the underwriter
so agrees and if the number of Registrable Securities that would otherwise
have been included in such registration and underwriting will not thereby
be limited.
If the number of Registrable Securities excluded from the underwriting
exceeds fifty percent (50%) of the total Registrable Securities requested
to be included in such underwriting by the Holders, then Holders of a
majority of the Registrable Securities requested to be included in such
underwriting may elect to terminate the registration. If such election to
terminate is elected, such registration shall not count as a demand
registration.
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(b) Unlimited Piggyback Registration Rights.
(i) Notice of Registration. For a period of two years following
the Closing, if the Corporation at any time proposes to file a
registration statement with respect to any class of equity securities,
whether for its own account (other than in connection with the
Registration Statement contemplated by Section 1.3(a) hereof or a
registration statement on Form S-8 (or any successor or substantially
similar form) relating to an employee stock option, stock purchase or
compensation plan or securities issued or issuable pursuant to any
such plan or a registration statement on Form S-4 (or any successor or
substantially similar form)) or for the account of a holder of
securities of the Corporation, then the Corporation will:
(A) promptly give to each Holder written notice thereof at
least twenty (20) days before the anticipated initial filing date
of any such registration statement, and such notice shall offer
to all Holders the opportunity to have any or all of the
Registrable Securities held by such Holders included in such
registration statement; and
(B) subject to the underwriter limitations, if any,
described in Section 1.3(b)(iii) below, include in such
registration statement (and any related qualification under "blue
sky" laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written
request or requests to be included therein, made by any Holder
and received by the Corporation within twenty (20) days after the
written notice from the Corporation described in clause (A) above
is mailed or delivered by the Corporation. Such written request
may specify all or a part of a Holder's Registrable Securities.
No right to registration of Registrable Securities under this Section
1.3(b)(i) shall be construed to limit any registration required under
Section 1.3(a).
(ii) Holdback by the Corporation. Subject to the rights of other
stockholders who have registration rights as of the date hereof, if
the Corporation has previously filed a Registration Statement with
respect to Registrable Securities pursuant to Section 1.3(a), and if
such previous registration has not been withdrawn or abandoned, the
Corporation 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 for a registration relating solely to
employee benefits plans or to a transaction under Rule 145), whether
on its own behalf or at the request of any holder or holders of such
securities, until a period of ninety (90) days has elapsed from the
effective date of such a previous registration.
(iii) Underwriting. If the registration of which the Corporation
gives notice is for a registered public offering involving an
underwriting, the Corporation shall so advise the Holders as a part of
the written notice given pursuant to Section 1.3(b)(i)(A). In such
event the right of any Holder to registration pursuant to this Section
1.3(b) 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 Corporation and the other holders of
securities of the Corporation with registration rights to participate
therein distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the managing
underwriter selected for such underwriting by the Corporation.
Notwithstanding any other provision of this Section 1.3(b), if the
managing underwriter determines in its good faith judgment that
marketing factors require limitation of the number of shares to be
underwritten, the managing underwriter may limit the Registrable
Securities to be included in such registration. The Corporation shall
so advise all holders of securities requesting registration, and the
number of shares of securities that may be included in the
registration and underwriting shall be allocated first to the Company
for securities being sold for its own account and thereafter as set
forth in Section 1.11. No securities of the Corporation held by
parties other than the Holders or the Corporation shall be included in
any registration and underwriting to which this section applies if the
number of Registrable Securities that would otherwise have been
included in such registration and underwriting will thereby be
limited. If any Holder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to
the Corporation and the managing underwriter.
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1.4 Limitations on Subsequent Registration Rights. From and after the date
hereof, without the approval of the Holders of a majority of the Registrable
Securities, the Corporation shall not enter into any agreement granting any
holder or prospective holder of any securities of the Corporation registration
rights with respect to such securities unless: (a) the agreement does not allow
the holder to include the securities in a registration filed under Section
1.3(a) hereof unless it would not thereby limit the number of Registrable
Securities of the Holders included in the registration; and (b) the agreement
does not grant rights which would delay the ability of the Holders to obligate
the Corporation to file a registration statement on the Holders' behalf pursuant
to Sections 1.2 or 1.3. The Corporation has not previously and shall not in the
future enter into any agreement, arrangement or understanding with respect to
its securities which is inconsistent with the rights granted to the Holders of
Registrable Securities in this Agreement or otherwise conflicts with the
provisions hereof. As of the date hereof, Schedule 1.1 hereof sets forth all
persons who by virtue of agreements with the Corporation are entitled to include
their securities in certain registrations hereunder.
1.5 Expenses of Registration. All Registration Expenses shall be borne by
the Corporation. All Selling Expenses relating to securities registered on
behalf of the Holders shall be borne by the Holders of such securities pro rata
on the basis of the number of shares so registered.
1.6 Registration Procedures. In the case of each registration, effected by
the Corporation pursuant to this Section 1, the Corporation will keep each
Holder advised in writing as to the initiation of each registration and such
amendment thereof and as to the completion thereof. At its expense the
Corporation will:
(a) Promptly prepare and file with the Commission a Registration
Statement with respect to such securities and with respect to registrations
under Sections 1.3, use its best efforts to cause such Registration
Statement to become effective as promptly as possible and remain effective
until the earlier of (i) the date which is one hundred and eighty (180)
days after the effective date of such Registration Statement and (ii) the
date on which all Registrable Securities covered by such Registration
Statement have been sold and the distribution contemplated thereby has been
completed (the "Registration Period"); provided, however, that if, after
such Registration Statement has become effective, the offering of the
Registrable Securities pursuant to such registration is interfered with by
any stop order, injunction or similar order of the Commission or other
governmental agency or court (other than by reason of any untrue statement
of a material fact or any omission of a material fact required to be stated
in the Registration Statement or necessary to make the statements therein
not misleading, to the extent, but only to the extent, that such untrue
statement or omission is contained in any information or affidavit
furnished in writing by a Holder to the Corporation specifically for
inclusion therein), such registration will be deemed not to have been
effected. Notwithstanding the foregoing, if within sixty (60) days after
the effective date of the stop order, injunction or similar order of the
Commission or other governmental agency or court, the same is lifted and
the effectiveness of the registration is restored, the registration shall
be deemed to have been effected, provided, that the Registration Period (i)
will be tolled during the period the stop order, injunction or similar
order is in effect, (ii) shall resume upon the lifting thereof and (iii)
shall be extended one day for each day during the period that the stop
order, injunction or similar order is in effect.
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(b) Furnish, at least five (5) business days before filing a
Registration Statement that registers such Registrable Securities, a
prospectus relating thereto and any amendments or supplements relating to
such a Registration Statement or prospectus, to one counsel selected by the
Holders (the "Holders' Counsel"), copies of all such documents proposed to
be filed (it being understood that such five-business-day period need not
apply to successive drafts of the same document proposed to be filed so
long as such successive drafts are supplied to the Holders' Counsel in
advance of the proposed filing by a period of time that is customary and
reasonable under the circumstances).
(c) 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 keep
such Registration Statement effective for the Registration Period, and to
comply with the provisions of the Securities Act with respect to the sale
and other disposition of all securities covered by such Registration
Statement.
(d) Notify in writing to the Holders' Counsel promptly (i) of the
receipt by the Corporation of any notification with respect to any comments
by the Commission with respect to such Registration Statement or prospectus
or any amendment or supplement thereto or any request by the Commission for
the amending or supplementing thereof or for additional information with
respect thereto, (ii) of the receipt by the Corporation of any notification
with respect to the issuance by the Commission of any stop order suspending
the effectiveness of such Registration Statement or prospectus or any
amendment or supplement thereto or the initiation or threatening of any
proceeding for that purpose and (iii) of the receipt by the Corporation of
any notification with respect to the suspension of the qualification of
such Registrable Securities for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purposes.
(e) Use its best efforts to register and qualify the securities
covered by such Registration Statement under such other securities or "blue
sky" laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Corporation 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.
(f) Furnish to the Holders participating in such registration and to
the underwriters of the securities being registered such number of copies
of the Registration Statement, preliminary prospectus, final prospectus and
such other documents incident thereto as such Holders or underwriters may
reasonably request in order to facilitate the public offering of such
securities.
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(g) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(h) Notify each Holder of Registrable Securities covered by such
Registration Statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any
event as a result of which the prospectus included in such Registration
Statement, as then in effect, includes an untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances then existing.
(i) Use its best efforts to furnish, at the request of any Holder
requesting registration of Registrable Securities pursuant to Section 1, on
the date that such Registrable Securities are delivered to the underwriters
for sale in connection with a registration pursuant to Section 1, if such
securities are being sold through underwriters, or, if such securities are
not being sold through underwriters, on the date that the Registration
Statement with respect to such securities becomes effective, (i) a copy
addressed to Holders of the opinion, dated such date, of the counsel
representing the Corporation 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 (in a non-
underwritten offering) to the Holders requesting registration of
Registrable Securities and (ii) a copy addressed to Holders of the letter
dated such date, from the independent certified public accountants of the
Corporation, in form and substance as is customarily given by independent
certified public accountants to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and (in a non-underwritten
offering) to the Holders requesting registration of Registrable Securities.
(j) Cause all such Registrable Securities registered pursuant
hereunder to be listed on the the NASDAQ or such other automated quotation
system or securities exchange on which Common Stock is listed.
(k) Otherwise use its best efforts to comply with all applicable rules
and regulations of the Commission and the securities commission or other
regulatory authority of any relevant state or other jurisdiction and make
available to its securityholders, as soon as reasonably practicable,
earnings statements (which need not be audited) covering a period of 12
months beginning within three months after the effective date of the
Registration Statement, which earnings statements shall satisfy the
provisions of Section 11(a) of the Securities Act.
(l) Use its best efforts to take all other steps reasonably necessary
to effect the registration of such Registrable Securities contemplated
hereby. Notwithstanding the foregoing, the Corporation shall not be
obligated to register the Registrable Securities of any Holder who fails
within a reasonable time to provide to the Corporation such information as
the Corporation may reasonably request at the time to enable the
Corporation to comply with applicable laws or regulations or to facilitate
the preparation of the Registration Statement.
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1.7 Indemnification.
(a) The Corporation will indemnify each Holder; each Holder's officers,
directors, employees, principals, equity holders and partners; each underwriter,
broker or any other Person (other than the Corporation) acting on behalf of such
Holder, and each Person (other than the Corporation) controlling such Person
within the meaning of Section 15 of the Securities Act, with respect to which
registration, qualification or that compliance has been effected pursuant to
this Section 1, against all expenses, claims, losses, damages or liabilities,
joint or several (or actions in respect thereof) (collectively, "Losses"),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or (i) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any Registration Statement, preliminary or final prospectus, offering circular
or other document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or (ii) arising out of or based on
any omission (or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading, or (iii) any violation by
the Corporation of the Securities Act, state securities or "blue sky" laws or
any rule or regulation promulgated thereunder applicable to the Corporation in
connection with any such registration, qualification or compliance (each
statement, omission or violation referred to in clauses (i), (ii) and (iii) of
this Section 1.7(a) being referred to as a "Violation"), and the Corporation
will reimburse each such Holder, each of its officers and directors, each such
underwriter, broker or other Person (other than the Corporation) acting on
behalf of such Holder, and each such controlling Person (other than the
Corporation) for any legal and any other expenses reasonably incurred in
connection with investigating, preparing or defending any such Loss, provided
that the Corporation will not be liable to any such Person in any such case to
the extent that any such Loss arises out of or is based on any untrue statement
or omission (or alleged untrue statement or omission), made in conformity with
written information furnished to the Corporation and stated to be specifically
for use therein. It is agreed that the indemnity agreement contained in this
Section 1.7(a) 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 the Corporation (which consent
shall not be unreasonably withheld).
(b) 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 the Corporation, each of its directors
and officers, each underwriter, broker or other Person acting on behalf of the
Holders, and each Person who controls any of the foregoing Persons within the
meaning of Section 15 of the Securities Act, and each other such Holder and
Other Stockholder, each of their officers and directors and each person
controlling such Holder or Other Stockholder within the meaning of Section 15 of
the Securities Act, against all Losses arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any such
Registration Statement, preliminary or final prospectus, offering circular or
other document, or any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Corporation, such Holders, Other
Stockholders, such directors, officers, underwriters, brokers, other Persons
acting on behalf of the Holders or control Persons for any legal or any other
expenses reasonably incurred in connection with investigating, preparing or
defending any such Loss, 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, preliminary or final
prospectus, offering circular or other document in conformity with written
information furnished to the Corporation 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 and 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). Notwithstanding the foregoing, the liability of
each Holder under this subsection (b) shall be limited to an amount equal to the
aggregate net proceeds received by such Holder from the sale of Registrable
Securities in such registration.
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(c) Each Person entitled to indemnification under this Section 1.7 (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 any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not unreasonably be
withheld), and the Indemnified Party may participate in such defense at such
Indemnified 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 1.7 unless the failure
to give such notice is materially prejudicial to an Indemnifying Party's ability
to defend such action and provided further, that the Indemnifying Party shall
not assume the defense for matters as to which there is a conflict of interest
or separate and different defenses. If (i) the Indemnifying Party shall have
failed to assume the defense of such claim and to employ counsel reasonably
satisfactory to the Indemnified Party in a timely manner or (ii) in the
reasonable judgment of any Indemnified Party a conflict of interest may exist
between such Indemnified Party and the Indemnifying Party with respect to such
claim, the fees and expenses of any counsel employed by the Indemnified Party
shall be at the expense of the Indemnifying Party; provided that, if the
Indemnifying Party is obligated to pay the fees and expenses of counsel for
other Indemnified Parties, such Indemnifying Party shall be obligated to pay
only the fees and expenses associated with one attorney or law firm for the
Indemnified Parties, unless there exists a conflict of interest or separate and
different defenses among the Indemnified Parties. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation. 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 the defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 1.7 is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, claim, damage, liability or action referred to herein, then
the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amounts paid or payable by such Indemnified
Party as a result of such loss, claim, damage, liability or action 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 which resulted in such loss, claim, damage,
liability or action 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 or alleged 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.
Notwithstanding the foregoing, the maximum amount which any Holder shall be
required to contribute pursuant to this Section 1.7(d) shall be limited to an
amount equal to the net proceeds received by such Holder from the sale of
Registrable Securities effected pursuant to such registration.
- 12 -
1.8 Information by Holder. The Holders of securities included in any
registration shall furnish to the Corporation in writing such information
regarding such Holders, the Registrable Securities held by such Holders and the
distribution proposed by such Holders as the Corporation may reasonably request
in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Section 1.
1.9 Rule 144 Reporting. With a view to making available the benefits of
certain rules and regulations of the Commission which may at any time permit the
sale of the Registrable Securities to the public without registration, the
Corporation agrees to use its best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144, at all times after the effective date
that the Corporation becomes subject to the reporting requirements of the
Securities Act or the Exchange Act.
(b) File with the Commission in a timely manner all reports and other
documents required of the Corporation under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting
requirements);
(c) So long as a Holder owns any Registrable Securities to furnish to
the Holder forthwith upon request a written statement by the Corporation as
to its compliance with the reporting requirements of said Rule 144, and of
the Securities Act and the Exchange Act, a copy of the most recent annual
or quarterly report of the Corporation, and such other reports and
documents of the Corporation 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. The Corporation
will take action reasonably requested by a Holder to facilitate the
transfer of Registrable Securities pursuant to Rule 144.
1.10 Transfer of Registration Rights. The rights to cause the Corporation
to register securities granted to a Holder by the Corporation under this
Agreement may be transferred or assigned by a Holder only to a transferee or
assignee of not less than 50,000 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 the Corporation is
given written notice at the time of or within a reasonable time after said
transfer or assignment, stating the name and address of the transferee or
assignee and identifying the securities with respect to which such registration
rights are being transferred or assigned, and, provided further, that the
transferee or the assignee of such rights assumes in writing the obligations of
such Holder under this Agreement.
- 13 -
1.11 Priority in Registration. In the event of any registration of
securities of the Corporation under the Securities Act, (other than on Forms
S-4, S-8 or their successor forms) holders of securities not enjoying demand
registration rights shall be first reduced pro rata to zero and, if necessary,
all holders of securities enjoying demand registration rights (including the
Holders) shall be cut back, with it being understood that (i) the Corporation
shall include in such registration the number of securities requested to be
included therein which are held by such holders (including the Holders) enjoying
demand registration rights which in the opinion of such underwriters can be sold
without materially and adversely affecting the success of such offering, pro
rata among such holders based on the number of securities (on an as-converted or
as-exercised basis) owned by each such holder, and (ii) in connection with an
underwritten primary registration on behalf of the Corporation pursuant to
Section 1.3(b) above, such holders enjoying demand registration rights shall be
entitled to include not less than 25% of the total number of shares to be
included in such offering.
2. Miscellaneous.
2.1 Governing Law; Submission to Jurisdiction. a) This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed wholly therein, without regard
to principles of the conflict of laws thereof.
(b) Each Party hereto hereby agrees that any suit or judgment entered by
any court in respect thereof may be brought to the extent permitted by
applicable law in the State of New York, County of Manhattan or in any United
States District Court for the District of the State of New York, as the Party
commencing such suit, action or proceeding may elect in its sole discretion; and
each Party hereto hereby irrevocably submits to the jurisdiction of such courts
and any appellate court or body thereof for the purpose of any suit, action,
proceeding or judgment (and waives for such purpose any other preferential
jurisdiction by reason of its present of future domicile or otherwise).
(c) Each Party hereby irrevocably waives any objection which it may now or
hereafter have to the laying of the venue of any suit, action or proceeding
arising out of or relating to this Agreement brought in the State of New York,
County of Manhattan or in any United States District Court for the District of
the State of New York and hereby further irrevocably waives any claim that any
such suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
2.2 Survival. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by any Holder, and the closing
of the transactions contemplated hereby.
- 14 -
2.3 Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the Parties hereto.
2.4 Entire Agreement. This Agreement and the Subscription Agreement contain
the entire understanding and agreement of the Parties with respect to the
subject matter hereof and thereof. This Agreement and the Subscription Agreement
supersede all prior agreements and understandings among the Parties hereto with
respect to the subject matter hereof. Neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated except by a written instrument
signed by the Corporation and the Holders of at least 50% of the Registrable
Securities then outstanding and any such amendment, waiver, discharge or
termination shall be binding on all the Holders, but in no event shall the
obligation of any Holder hereunder be materially increased, except upon the
written consent of such Holder.
2.5 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be delivered personally,
mailed by certified or registered mail, postage prepaid, return receipt
requested, by courier or a recognized overnight delivery service or by facsimile
(provided confirmation of transmission is mechanically generated and kept on
file by the sending party), addressed (a) if to any Holder, at such Holder's
address as set forth in the Corporation's records, or at such other address as
such Holder shall have furnished to the Corporation in writing with copies to C.
E. Unterberg, Towbin at 10 East 50th Street, 20th Floor, New York, NY 10022,
Attention: Michael Marrus, (b) if to the Corporation, at 23 North Main Street,
P.O.B. 636, Kent, CT 06757, Attention: Robert Bowman, or at such other address
as the Corporation shall have furnished to such Holders in writing. Notices that
are mailed shall be deemed to have been given five days after deposit in the
United States mail and notices delivered personally, by facsimile, courier or an
overnight delivery service shall be deemed to have been given upon delivery to
recipient's address.
2.6 Delays or Omissions. No failure or delay by any Holder in exercising
any right, power or privilege hereunder and no course of dealing between the
Corporation, on the one hand, and any Holder, on the other hand, shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder. Any Person having
rights under any provision of this Agreement shall be entitled to enforce such
rights specifically or to recover damages or to exercise any other remedy
available to it at law or in equity. The foregoing rights and remedies shall be
cumulative and the exercise of any right or remedy provided herein shall not
preclude any Person from exercising any other right or remedy provided herein.
The Corporation agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of any of the provisions of
this Agreement and hereby agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate. No notice to or demand on
the Corporation in any case shall entitle the Corporation to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Holder to any other or further action in any
circumstances without notice or demand. Each covenant contained herein shall
operate independently of any other covenant contained herein.
- 15 -
2.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
2.8 Severability. If any provision of this Agreement, or the application
thereof, shall for any reason and to any extent be invalid or unenforceable the
remainder of this Agreement and application of such provision to Persons or
circumstances shall be interpreted so as best to reasonably effect the intent of
the parties hereto, the parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
which will achieve to the extent possible, the economic, business and other
purposes of the void or unenforceable provision.
2.9 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
- 16 -
COUNTERPART SIGNATURE PAGE TO
REGISTRATION RIGHTS AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this
Registration Rights Agreement as of the date first written above.
CORPORATION:
CYBERIAN OUTPOST, INC.
By: /s/ Robert A. Bowman
----------------------
Name:
Title:
- 17 -
COUNTERPART SIGNATURE PAGE TO
REGISTRATION RIGHTS AGREEMENT
INVESTORS:
Ardent Research Partners, Ltd.
By: /s/ Francis J. Sardutti
-------------------------------------
Ardent Research Partners, L.P.
By: /s/ Francis J. Sardutti
-------------------------------------
Elliot Broidy, IRA
By: /s/ Elliott Broidy
-------------------------------------
Camelot Capital, LP
By: /s/ signature illegible
-------------------------------------
Camelot Offshore Fund Ltd.
By: /s/ signature illegible
-------------------------------------
Camelot Capital II, LP
By: /s/ signature illegible
-------------------------------------
Hathaway Partners Investment L.P.
By: /s/ C. Nichols Hathaway
-------------------------------------
Duck Partners
By: /s/ J. Mitchell Hull
-------------------------------------
Kensington Partners L.P.
By: /s/ signature illegible
-------------------------------------
Kensington Partners II L.P.
By: /s/ signature illegible
-------------------------------------
- 18 -
Bald Eagle Fund, Ltd.
By: /s/ signature illegible
-------------------------------------
Essex Performance Fund, LP
By: /s/ signature illegible
-------------------------------------
PAW Partners LP
By: /s/ signature illegible
-------------------------------------
PAW Partners Offshore Fund Ltd.
By: /s/ signature illegible
-------------------------------------
FNY Securities Associates L.P.
By: /s/ signature illegible
-------------------------------------
Alfred University
By: /s/ signature illegible
-------------------------------------
Core Technology Fund
By: /s/ signature illegible
-------------------------------------
Walt Disney Company Retirement Plan
By: /s/ signature illegible
-------------------------------------
Executive Technology LP
By: /s/ signature illegible
-------------------------------------
Foundation Partners Fund GP
By: /s/ signature illegible
-------------------------------------
Matrix Technology Group NV
By: /s/ signature illegible
-------------------------------------
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Rochester Institute of Technology
By: /s/ signature illegible
-------------------------------------
Sci-Tech Investment Partners L.P.
By: /s/ signature illegible
-------------------------------------
SG Partners LP
By: /s/ signature illegible
-------------------------------------
Tampsco II Partnership
By: /s/ signature illegible
-------------------------------------
Yale University
By: /s/ signature illegible
-------------------------------------
Yale University Retirement Plan for
Staff Employees
By: /s/ signature illegible
-------------------------------------
Special Situations Private
Equity Fund, L.P.
By: /s/ signature illegible
-------------------------------------
Special Situations Fund III, L.P.
By: /s/ signature illegible
-------------------------------------
Special Situations Cayman Fund, L.P.
By: /s/ signature illegible
-------------------------------------
Straus Partners, LP
By: /s/ Melville Straus
-------------------------------------
Straus-Spelman Partners, LP
By: /s/ Melville Straus
-------------------------------------
- 20 -
Straus-GEPT
By: /s/ Melville Straus
-------------------------------------
Trellus Offshore Fund Limited
By: /s/ Adam Usdan
-------------------------------------
Trellus Partners, LP
By: /s/ Adam Usdan
-------------------------------------
Maple Row Partners, LP
By: /s/ Eric Blattman
-------------------------------------
Maple Row Partners (Bermuda)
By: /s/ Eric Blattman
-------------------------------------
Catalyst Partners
By: /s/ signature illegible
-------------------------------------
Edmund H. Shea, Jr.
/s/ Edmund H. Shea, Jr.
-----------------------------------------
Valor Fund Ltd.
By: /s/ Russell Sarachek
-------------------------------------
Russell Saracheck
/s/ Russell Sarachek
-----------------------------------------
Wellport Corp. NV
By: /s/ Russell Sarachek
-------------------------------------
Morton Collins
/s/ Morton Collins
-----------------------------------------
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C.E. Unterberg, Towbin Capital Partners
By: /s/ signature illegible
-------------------------------------
UT Technology Partners, LDC
By: /s/ signature illegible
-------------------------------------
UT Capital Partners International, LDC
By: /s/ signature illegible
-------------------------------------
Thomas I. Unterberg
/s/ Thomas I. Unterberg
-----------------------------------------
Ellen Unterberg Celli
/s/ Ellen Celli
-----------------------------------------
Emily Unterberg Satloff
/s/ Emily Satloff
-----------------------------------------
Andrew Arno &
Janis Koopersmith Arno JT WROS
/s/ Andrew Arno /s/ Janis Arno
-----------------------------------------
Daniel Ries
/s/ Daniel Ries
-----------------------------------------
Daniel Ries Escrow Account
By: /s/ Daniel Ries
-------------------------------------
Adam S. Frankfort-IRA
By: /s/ Adam S. Frankfort
-------------------------------------
Andrew M. Blum
/s/ Andrew M. Blum
-----------------------------------------
- 22 -
O. Lee Tawes
/s/ O. L. Tawes
-----------------------------------------
Estelle Konvisor
/s/ Estell Konvisor
-----------------------------------------
C.E. Unterberg, Towbin 401K Profit Sharing
Plan DTD 10/26/90 FBO Robert M. Matluck; R.
Matluck & T. Unterberg, TTEES
By: /s/ Robert M. Matluck
-------------------------------------
Jeffrey Moskowitz
/s/ Jeffrey Moskowitz
-----------------------------------------
A. Robert Towbin
/s/ A. Robert Towbin
-----------------------------------------
- 23 -