EXHIBIT 10.7
REGISTRATION RIGHTS AGREEMENT
Dated as of October 18, 1996
By and Among
CYBERSHOP, L.L.C.
TRUSTEES OF GENERAL ELECTRIC PENSION TRUST
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
PORRIDGE PARTNERS II
TABLE OF CONTENTS
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PAGE
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1. Securities Subject to this Agreement..................................................... 1
(a) Definitions......................................................................... 1
(b) Restricted Securities............................................................... 1
2. Demand Registration...................................................................... 2
(a) Request for Registration........................................................... 2
(b) Effective Registration and Expenses................................................ 3
(c) Priority on Demand Registrations................................................... 4
3. Piggy-Back Registrations................................................................. 4
4. Holdback Agreement....................................................................... 6
(a) Restrictions on Public Sale by Holders of
Registrable Securities.............................................................. 6
(b) Restrictions on Public Sale by the Company
and Others.......................................................................... 6
5. Registration Procedures.................................................................. 6
6. Registration Expenses.................................................................... 11
7. Indemnification; Contribution............................................................ 11
(a) Indemnification by the Company...................................................... 11
(b) Indemnification by Holders of Registrable
Securities.......................................................................... 12
(c) Conduct of Indemnification Proceedings.............................................. 13
(d) Contribution........................................................................ 13
8. Selection of Underwriters; Participation in
Underwritten Registrations............................................................... 15
9. Rule 144 Reporting....................................................................... 15
10. Miscellaneous............................................................................ 16
(a) Governing Law....................................................................... 16
(b) No Inconsistent Agreements.......................................................... 16
(c) Successors and Assigns.............................................................. 16
(d) Entire Agreement.................................................................... 16
(e) Amendments and Waivers.............................................................. 17
(f) Notices............................................................................. 17
(g) Delays or Omissions................................................................. 17
(h) Remedies............................................................................ 17
(i) Counterparts........................................................................ 17
(j) Severability........................................................................ 17
(k) Titles and Subtitles................................................................ 18
(l) Attorneys' Fees..................................................................... 18
(m) Trustees Not Liable................................................................. 18
i
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made
effective as of October 18, 1996 by and among the Trustees of the General
Electric Pension Trust, a New York trust, with its principal office at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual, having an
office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, an individual,
having an office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and Porridge Partners
II, a Connecticut general partnership having an office at c/o ▇▇▇▇▇▇-▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (each a "Purchaser" and,
collectively, the "Purchasers") and CyberShop, L.L.C., a New Jersey limited
liability company (the "Company"), with its principal office at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇.
This Agreement is made pursuant to the Securities Purchase
Agreement dated as of the date hereof by and among the Company and each of the
Purchasers (the "Purchase Agreement"). In order to induce the Purchasers to
enter into the Purchase Agreement, the Company has agreed to provide the
registration rights with respect to the Securities (as defined in the Purchase
Agreement) purchased by the Purchasers pursuant to the Purchase Agreement as set
forth in this Agreement. Capitalized terms used herein without definitions shall
have the meanings set forth in the Purchase Agreement.
The parties hereto agree as follows:
1. Securities Subject to this Agreement
------------------------------------
(a) Definitions. The terms "Registrable Securities" and
"Restricted Securities" mean and include each of the following, subject to
Section 1(b): (i) the Securities, (ii) any securities similar to the Securities
distributed to the holders of Securities in connection with a dividend, split or
other distribution relating to the Securities and (iii) any other securities
issued in substitution or exchange for any of the Securities in which
substitution or exchange such Securities would cease to be outstanding.
(b) Restricted Securities. For the purposes of this Agreement,
Restricted Securities shall cease to be Registrable Securities when (i) such
Restricted Securities have been effectively registered under the Securities Act
of 1933, as amended (the "Act"), and they have been disposed of
pursuant to an effective registration statement covering such Registrable
Securities, (ii) they are distributed to the public pursuant to Rule 144 (or any
similar provisions then in force) under the Act or (iii) they may be sold or
transferred pursuant to Rule 144(k) (or any similar provision then in force)
under the Act.
2. Demand Registration
-------------------
(a) Request for Registration. At any time on or after the date
6 months after the effective date of the initial public offering of any
securities of or other ownership interests in the Company (the "IPO"), any
holder or holders of Registrable Securities then outstanding may make a written
request for registration under the Act pursuant to this Section 2 of all or part
of its or their Registrable Securities (a "Demand Registration"); provided,
that, the Company need effect only one Demand Registration pursuant hereto from
the Purchasers (which shall be exercised by a majority in interest of the
Purchasers). Such request will specify the aggregate percentage or number of
each Purchaser's Registrable Securities proposed to be sold and will also
specify the intended method or methods of disposition thereof. Within 10 days
after receipt of such request the Company will give written notice of such
registration request to all other holders of Registrable Securities and include
in such registration all Registrable Securities with respect to which the
Company has received written requests for inclusion therein within 30 days after
the receipt by the applicable holder of the Company's notice. Each such request
will also specify the percentage or number of each Purchaser's Registrable
Securities to be registered and the intended method or methods of disposition
thereof. Unless a majority in interest of the holders requesting to participate
in the Demand Registration shall consent in writing, none of the Company's
security holders (other than the Company and the holders of Registrable
Securities) shall have the right to include any of the Company's securities in
any registration statement prepared in connection with any such Demand
Registration.
(i) If, within 5 business days of receipt of a registration
request pursuant to this Section 2(a), the Company is advised in
writing (with a copy to the holder of Registrable Securities requesting
registration) by the managing underwriter of the IPO that, in such
firm's good faith opinion, a registration at the time and on the terms
requested would materially and adversely affect any planned offering of
securities by the Company or any other financing by the Company that
had been contemplated by the Company prior to receipt of the notice
requesting registration pursuant to this Section 2(a), the Company
shall not be required to
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effect a registration pursuant to this Section 2(a) until the earliest
of (A) the abandonment of such offering, (B) 90 days after the
completion of such offering or (C) the termination of any "hold back"
period obtained by the underwriter(s) of such offering from any person
in connection therewith.
(ii) If a registration request is pending pursuant to this
Section 2(a) and the Company has determined in good faith that (A) the
filing of a registration statement (or, if such registration statement
has been declared effective, any post-effective filing) would require
the disclosure of material information that the Company has a bona fide
business purpose for preserving as confidential, or (B) the Company is
then unable to comply with SEC requirements applicable to the requested
registration if such registration statement has not been declared
effective, the Company shall not be required to effect a registration
pursuant to such registration request or make any such post-effective
filing until the earlier of (1) the date upon which such material
information is otherwise disclosed to the public or ceases to be
material or the Company is able to so comply with applicable SEC
requirements, as the case may be, and (2) 30 days after the Company
makes such good-faith determination; provided that the Company shall
not be permitted to delay a requested registration or any such
post-effective filing in reliance on this clause (ii) more than 2 times
in any 12 month period.
(b) Effective Registration and Expenses. A Demand Registration
shall not be deemed to have been effected pursuant to Section 2(a) hereof until
it has become effective and the period of distribution of the registration
contemplated thereby has been completed; provided, however, that if a
registration does not become effective solely because of any act or omission on
the part of any Purchaser, such registration shall nevertheless count as a
Demand Registration and provided further that if after any such registration
statement has been declared or becomes effective, the Company, upon the request
of the Purchasers, causes the effectiveness thereof to lapse prior to the
completion of the period of distribution originally contemplated, such lapsed
registration shall be deemed a completed Demand Registration unless such request
by the Purchasers is directly related to a material adverse change to the
Company or its business which (i) in the good faith determination of the
Purchasers is likely to materially and adversely affect the ability of the
Purchasers to sell the Registrable Securities pursuant to such Registration
Statement or (ii) was known, but not disclosed to the Purchasers, by the Company
prior to the effectiveness of
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such registration statement. In any registration initiated as a Demand
Registration, the Company will pay all Registration Expenses (as hereinafter
defined) in connection therewith, whether or not such registration becomes
effective.
(c) Priority on Demand Registrations. If the holders of a
majority of the number of shares or amount of Registrable Securities to be
registered in a Demand Registration so elect, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. Subject to the immediately succeeding sentence, the
Company shall have the right to cause the registration of additional securities
for sale for the account of any person (including the Company) in any
registration of Registrable Securities requested by a Holder pursuant to Section
2(a). In connection with such registration, if the managing underwriter or
underwriters of such offering advise the Company and the holders in writing that
in their good faith opinion the aggregate amount of Registrable Securities
requested to be included in such offering (together with additional securities
being offered by the Company or for the account of any other person other than
the Purchasers) is sufficiently large to materially and adversely affect the
offering and sale of such Registrable Securities, the Company will reduce the
amount of securities to be offered by it or for the account of any other person
other than the Purchasers to the extent recommended by the managing underwriter
(or if so recommended, withdraw from the offering entirely) and will include in
such registration the aggregate amount of Registrable Securities which in the
opinion of such managing underwriter or underwriters can be sold without any
such material adverse effect, and such securities to be included shall be
allocated pro rata among the holders of Registrable Securities on the basis of
the number or amount of Registrable Securities requested to be included in such
registration by the holders thereof.
3. Piggy-Back Registrations
------------------------
(a) If the Company proposes to file a registration statement
under the Act with respect to an offering by the Company for its own account
and/or for the account of any security holders (other than the holders of
Registrable Securities) of any class of security (other than a registration
statement on Form S-4 or S-8 or successor forms thereto or filed in connection
with an exchange offer or an offering of securities solely to the Company's
existing stockholders or a registration statement filed in connection with the
IPO), then the Company shall in each case give written notice of such proposed
filing to the holders of Registrable Securities at least 30 days before the
anticipated filing date, and such notice shall offer
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(except as otherwise contemplated by the penultimate sentence of this Section)
such holders the opportunity to register such number of shares of Registrable
Securities as each such holder may request. The Company shall use its reasonable
commercial efforts to cause the managing underwriter or underwriters of a
proposed underwritten offering to permit the holders of Registrable Securities
requested to be included in the registration for such offering to include such
securities in such offering on the same terms and conditions as any similar
securities of the Company included therein.
(b) If at any time after giving written notice of its
intention to register any securities and prior to the effective date of such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, given
written notice of such determination to the holders of Registrable Securities
and, thereupon, (A) in the case of a determination not to register, the Company
shall be relieved of its obligation to register any Registrable Securities in
connection with such registration, and (B) in the case of a determination to
delay such registration, the Company shall be permitted to delay registration of
any Registrable Securities requested to be included in such piggyback
registration for the same period as the delay in registering such other
securities.
(c) (i) If the registration referred to in the first sentence
of this Section 3 is to be an underwritten primary registration on behalf of the
Company, and the managing underwriter advises the Company in writing that, in
such firm's good faith opinion, such offering would be materially and adversely
affected by the inclusion therein of the Registrable Securities requested to be
included therein, the Company shall include in such registration: (1) first, all
securities the Company proposes to sell for its own account ("Company
Securities"), (2) second, up to the full number or amount of Registrable
Securities held by the Purchasers and requested to be included in such
registration by such Purchasers ("Purchaser Securities") in excess of the number
or dollar amount of securities the Company proposes to sell which, in the
good-faith opinion of such managing underwriter, can be so sold without so
materially and adversely affecting such offering, and (3) third, an amount of
other securities, if any, requested to be included therein in excess of the
number or dollar amount of Company Securities and Purchaser Securities which, in
the opinion of such underwriter(s), can be sold without materially and adversely
affecting such offering (allocated among the holders of such other securities in
such proportions as such holders and the Company may agree); and (ii) if the
registration referred to in the first
5
sentence of this Section 3 is to be an underwritten secondary registration on
behalf of holders of securities (other than Registrable Securities) of the
Company (the "Other Holders"), and the managing underwriter advises the Company
in writing that in their good-faith opinion such offering would be materially
and adversely affected by the inclusion therein of the Registrable Securities
requested to be included therein, the Company shall include in such registration
the amount of securities (including Registrable Securities) that such managing
underwriter advises allocated pro rata among the Other Holders and the holders
of Registrable Securities on the basis of the number or amount of securities
(including Registrable Securities) requested to be included therein by each
Other Holder and each Holder of Registrable Securities.
4. Holdback Agreement
------------------
(a) Restrictions on Public Sale by Holders of Registrable
Securities. To the extent not inconsistent with applicable law, each holder of
Registrable Securities whose securities are included in a registration statement
agrees, upon the request of the managing underwriter or underwriters in an
underwritten offering, not to sell, make any short sale of, lend, grant any
option for the purchase of, effect any public sale or distribution or otherwise
dispose of any securities of the Company, during the 30 days prior to, and
during the 90-day period beginning on, the effective date of such registration
statement, if and to the extent requested by the managing underwriter or
underwriters. The Company may impose stop transfer restrictions on certificates
reflecting the foregoing.
(b) Restrictions on Public Sale by the Company and Others. The
Company agrees, upon the request of the managing underwriter or underwriters in
an underwritten offering, not to effect any public or private offer, sale or
distribution of any securities of the Company of the same class as the
securities included in any registration participating, or any securities
convertible into or exchangeable or exercisable for such securities (except
pursuant to employee benefit plans, as part of such registration or pursuant to
registrations on Forms S-4 or S-8 or any successor form to such Forms), during
the 14 days prior to, and during the 90-day period beginning on, the effective
date of such registration statement, if and to the extent requested by the
managing underwriter or underwriters.
5. Registration Procedures
-----------------------
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Whenever the holders of Registrable Securities have requested
that any Registrable Securities be registered pursuant to Section 2 or 3 of this
Agreement, the Company will use its reasonable commercial efforts to effect the
registration and the sale of such Registrable Securities upon the terms and
conditions hereof to permit the sale of Registrable Securities by holders
thereof in accordance with the intended method or methods of distribution or
disposition thereof as quickly as practicable, and in connection with any such
request, the Company will as expeditiously as possible:
(a) in connection with a request pursuant to Section 2,
prepare and file with the Securities and Exchange Commission (the
"Commission"), not later than 60 days (90 days if other than on a Form
S-3) after receipt of a request to file a registration statement with
respect to Registrable Securities, a registration statement on any form
for which the Company then qualifies or which counsel for the company
shall deem appropriate for the sale of Registrable Securities in
accordance with the intended method or methods of distribution thereof,
and use reasonable commercial efforts to cause such registration
statement to become effective as promptly as practicable thereafter;
and provided, further, that before filing a registration statement or
prospectus or any amendments or supplements thereto, the Company will
furnish to one counsel selected by the holders of a majority in number
of shares of the Registrable Securities covered by such registration
statement copies of all such documents proposed to be filed;
(b) in connection with a registration pursuant to Section 2,
prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective for a period of not less than 90 days or such shorter period
which will terminate when all Registrable Securities covered by such
registration statement have been sold (but not before the expiration of
the applicable period referred to in Section 4(3) of the Act and Rule
174 thereunder, if applicable), and comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement during such period in accordance with the
intended method or methods of disposition by the sellers thereof set
forth in such registration statement or prospectus;
(c) as soon as reasonably possible, furnish to each seller of
Registrable Securities to be included in
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a registration statement copies of such registration statement as filed
and each amendment and supplement thereto (in each case including all
exhibits thereto), as many copies of the prospectus included in such
registration statement and any amendments or supplements thereto as
such seller may reasonably request (including each preliminary
prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable
Securities owned by such seller;
(d) use reasonable commercial efforts to register or qualify
such Registrable Securities under such other securities or blue sky
laws of such jurisdictions as any seller reasonably requests and do any
and all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such seller;
provided, that the Company will not be required to (i) register or to
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this paragraph (d) or to
subject itself to taxation in any such jurisdiction or (ii) take any
action that would subject it to the service of process in suits other
than as to matters and transactions relating to the sale of the
Registrable Securities or any violation of state securities laws in any
jurisdiction where it is not now so subject;
(e) use reasonable commercial efforts to cause the Registrable
Securities covered by such registration statement to be registered with
or approved by such other governmental agencies or authorities as may
be necessary to enable the seller or sellers thereof or the underwriter
or underwriters, if any, to consummate the disposition of such
Registrable Securities subject to the proviso contained in paragraph
(d) above;
(f) notify each seller of such Registrable Securities, at any
time when a prospectus relating thereto is required to be delivered
under the Act, of the happening of any event as a result of which the
prospectus included in such registration statement contains an untrue
statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading, and the Company will promptly prepare a
supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or
omit to state any material fact required to be stated
8
therein or necessary to make the statements therein not misleading;
(g) notify each seller of Registrable Securities of any stop
order issued or threatened by the Commission and take all reasonable
actions required to prevent the entry of such stop order or to remove
it if entered;
(h) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions (including
using reasonable commercial efforts to obtain customary opinions of
counsel for the Company) as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities;
(i) make available at all reasonable times and in a reasonable
manner for inspection by any seller of Registrable Securities, any
underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent
retained by any such seller or underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company customarily reviewed in similar
securities offerings (collectively, the "Records"), and cause the
officers, directors and employees of the Company to supply all
information reasonably requested by any such Inspector in connection
with such registration statement prior to its effectiveness. Records
which the Company determines, in good faith, to be confidential and
which the Company notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (i) the disclosure of such Records
is necessary to avoid or correct a misstatement or omission in the
registration statement or (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction. Each seller of Registrable Securities agrees that it
will, upon learning that disclosure of such Records is sought in a
court of competent jurisdiction, give notice to the Company and allow
the Company, at the Company's expense, to undertake appropriate action
to prevent disclosure of the Records deemed confidential;
(j) use reasonable commercial efforts to obtain a comfort
letter from the Company's independent public accountants in customary
form and covering such matters of the type customarily covered by
comfort letters with respect to offerings of such type as the holders
of a
9
majority in number of shares of the Registrable Securities being sold
reasonably request;
(k) otherwise comply with all applicable rules and regulations
of the Commission, and make generally available to its security
holders, as soon as reasonably practicable, an earnings statement
covering a period of 12 months, beginning within 3 months after the
effective date of the registration statement, which earnings statement
shall satisfy the provisions of Section 11(a) of the Act and Rule 158
thereunder;
(l) cause all such Registrable Securities to be listed on each
securities exchange or quotation system on which similar securities
issued by the Company are then listed; and
(m) cooperate and assist in any filings required to be made
with the National Association of Securities Dealers, Inc. (the "NASD")
and in the performance of any due diligence investigation by any
Inspector (including any "qualified independent underwriter" that is
required to be retained in accordance with the rules and regulations of
the NASD).
The Company may require each seller of Registrable Securities
as to which any registration is being effected to furnish to the Company such
information regarding the distribution of such Securities as the Company may
from time to time reasonably request in writing.
Each holder of Registrable Securities agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 5(f) hereof, such holder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such holder's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 5(f) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the prospectus may be resumed. If so directed by the Company, such holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such holder's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice. In the event the Company shall give any such notice, the Company shall
extend the period during which such registration statement shall be maintained
effective pursuant to this Agreement (including the period referred to in
Section 5(b)) by the number of days during the period from and including the
date of the giving of such notice pursuant to Section 5(f) hereof to and
including the date when each seller of Registrable
10
Securities covered by such registration statement shall have received the copies
of the supplemented or amended or amended prospectus contemplated by Section
5(f) hereof or shall have received the Advice.
6. Registration Expenses
---------------------
All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation, all registration
and filing fees and expenses (including those for filings made with the NASD),
fees and expenses of compliance with securities or blue sky laws (including fees
and disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), rating agency fees, printing expenses, messenger and
delivery expenses, internal expenses (including, without limitation, all
salaries and expenses of the Company's officers and employees performing legal
or accounting duties), the fees and expenses incurred in connection with the
listing of the securities to be registered on each securities exchange and
quotation system on which similar securities issued by the Company are then
listed, and fees and disbursements of counsel for the Company and its
independent certified public accountants (including the expenses of any special
audit and "comfort" letters required by or incidental to such performance),
securities acts liability insurance (if the Company elects to obtain such
insurance), the fees and expenses of any special experts retained by the Company
in connection with such registration, fees and expenses of other Persons
retained by the Company, fees and expenses of other Persons retained by the
Company, fees and expenses of one counsel for the holders of Registrable
Securities incurred in connection with each registration hereunder and any
reasonable out-of-pocket expenses of the holders of Registrable Securities (or
the agents who manage their accounts) (all such expenses being herein called
"Registration Expenses"), will be borne by the Company. The holders of
Registrable Securities sold pursuant to a registration statement shall bear the
expense of any broker's commission or underwriter's discount or commission
relating to such registration and sale.
7. Indemnification; Contribution
-----------------------------
(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless, to the full extent permitted by law, (i) each
holder of Registrable Securities, (ii) each Person who controls such holder
(within the meaning of the Act), (iii) any investment advisor thereof or
financial agent or counsel therefor, and (iv) the trustees, officers, directors,
partners, employees, representatives and/or agents, as applicable, of each
Person described in the foregoing clauses (i) through (iii), from and against
any and all losses, claims, damages, liabilities and
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expenses caused by any untrue or alleged untrue statement of material fact
contained in any registration statement, prospectus or preliminary prospectus
(or any amendments or supplements thereto), including any document incorporated
by reference therein, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein (in case of a prospectus or preliminary prospectus, in light
of the circumstances under which they were made) not misleading, except insofar
as the same are caused by, contained in, or, with respect to any material
omission, omitted from, any information with respect to indemnified parties or
any underwriter or person controlling or affiliated with an underwriter
furnished in writing to the Company by such indemnified party expressly for use
therein. The Company will also indemnify and hold harmless (A) any underwriters
of the Registrable Securities, (B) each Person who controls such underwriters
(within the meaning of the Act), and (C) the officers, directors, partners,
employees, representatives and/or agents of each Person described in the
foregoing clauses (A) and (B), to the same extent as provided above with respect
to the indemnification of the holders of Registrable Securities.
(b) Indemnification by Holders of Registrable Securities. In
connection with any registration statement in which a holder of Registrable
Securities is participating, each such holder will furnish to the Company in
writing such information with respect to such holder as the Company reasonably
requests for use in connection with any such registration statement or
prospectus and agrees to indemnify and hold harmless, to the extent permitted by
law, (i) the Company, (ii) each Person who controls the Company (within the
meaning of the Act), and (iii) the officers, directors, partners, employees,
representatives and/or agents of each Person described in the foregoing clauses
(i) and (ii), from and against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of a material
fact or any omission or alleged omission of a material fact required to be
stated in the registration statement, prospectus or preliminary prospectus or
any amendment thereof or supplement thereto or necessary to make the statements
therein (in the case of a prospectus or preliminary prospectus, in the light or
the circumstances under which they were made) not misleading, to the extent, but
only to the extent, that such untrue statement or omission is contained in, or
with respect to any material omission, omitted from, any information with
respect to such holder so furnished in writing by such holder expressly for use
therein. In no event shall the liability of any selling holder of Registrable
Securities hereunder be greater in amount than the dollar amount of the proceeds
received by such holder upon the sales of
12
Restricted Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. Any Person
entitled to indemnification hereunder agrees to give prompt written notice to
the indemnifying party after the receipt by such Person of any written notice of
the commencement of any action , suit, proceeding or investigation or threat
thereof made in writing for which such Person will claim indemnification or
contribution pursuant to this Agreement (but the failure to give such notice
will not affect the right to indemnification or contribution hereunder unless,
and only to the extent that, the indemnifying party is materially prejudiced by
such failure). The indemnifying party shall not have the right to assume the
defense of such action or proceeding on behalf of such indemnified party, it
being understood, however, that the indemnifying parties shall not, in
connection with any one such action or proceeding or separate but substantially
similar or related actions or proceedings in the same jurisdiction arising out
of the same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys (in addition to
any local counsel) in any one jurisdiction at any time for all such indemnified
parties, unless in the reasonable judgment of an indemnified party a conflict of
interest may exist between such indemnified party and any other of such
indemnified parties with respect to such claim, in which event the indemnifying
party shall be obligated to pay the reasonable fees and expenses of such
additional counsel or counsels. Any indemnified party shall also have the right
to employ separate counsel in any such action and participate in the defense
thereof at such indemnified party's expense. The indemnifying party will not be
subject to any liability for any settlements made without its consent, which
shall not be unreasonably withheld. No indemnifying party shall, without the
consent of such indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which such indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability for claims that are the subject matter
of such proceeding.
(d) Contribution. If for any reason the indemnity provided for
in this Section 7 is unavailable to, or is insufficient to hold harmless, an
indemnified party, then the indemnifying party, in lieu of indemnifying such
party, shall contribute the amount paid or payable by the indemnified party as a
result of such losses, claims, damages, liabilities or expenses in such
proportion as is
13
appropriate to reflect the relative fault of the indemnifying party, on the one
hand, and the indemnified party, on the other hand, in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of the indemnifying party, on the one hand, and the
indemnified party, on the other hand, shall be determined by reference to, among
other things, whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information supplied by, the
indemnifying party or the indemnified party; and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in Section 7(c), any
legal or other fees or expenses reasonably incurred by such indemnified party in
connection with any investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 7(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. No Person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
14
8. Selection of Underwriters; Participation in Underwritten Registrations
----------------------------------------------------------------------
(a) The underwriters for any offering of Registrable
Securities to be distributed pursuant to Section 2 shall be selected by the
holders of a majority of the number of shares of Registrable Securities to be
registered and shall be reasonably acceptable to the Company.
(b) The underwriters for any offering of Registrable
Securities to be registered pursuant to Section 3 shall be selected by the
Company and shall be reasonably acceptable to the holders of a majority of the
number of shares of Registrable Securities to be registered.
(c) Notwithstanding the provisions of this Section 8(a)and
(b), the Trustees of General Electric Pension Trust shall have the right to
disapprove any underwriter in which General Electric Company has a direct or
indirect interest of five percent or more.
(d) No Person may participate in any underwritten registration
hereunder unless such Person (a) agrees to sell such Person's securities on the
basis provided in any underwriting agreements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements.
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 Company agrees
to:
(a) use reasonable commercial efforts to make and keep public
information available, as those terms are understood and defined in
Rule 144 under the Act;
(b) use reasonable commercial efforts to file with the
Commission in a timely manner all reports and other documents required
of the Company under the Act and the Securities Exchange Act of 1934,
as amended (the "Exchange Act"); and
(c) furnish to any holder of Registrable Securities forthwith
upon request a written statement by the Company as to its compliance
with the reporting requirements of such Rule 144 and of the Act and the
Exchange Act, a copy of the most recent annual or
15
quarterly report of the Company, and such other reports and documents
so filed by the Company as such holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing
such holder to sell any Registrable Securities without registration.
10. Miscellaneous
-------------
(a) Governing Law. This Agreement shall be governed in all
respects by the laws of the State of New Jersey, without reference to its
conflicts of law principles.
(b) No Inconsistent Agreements. The Company will not hereafter
enter into any agreement with respect to its securities which is inconsistent
with the rights granted to the holders of Registrable Securities in this
Agreement and, without the prior written consent of the Purchasers, grant
registrations rights to any other Person or Persons that are senior to or pari
passu with registration rights granted to the Purchasers hereunder. The Company
represents and warrants that it has not previously entered into any agreement
with respect to any of its securities granting any registration rights to any
Person, other than agreements which by reason of lapse of time do not require
the Company as a practical matter to register any securities for any Person.
(c) 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. No party may assign any of such party's rights, interests or
obligations hereunder without the prior written consent of the other parties
hereto; provided, however, that any Purchaser may assign any or all of its
rights, interests and obligations hereunder (i) in connection with the
concurrent sale or transfer of Registrable Securities, or (ii) to a successor
entity to any Purchaser pursuant to a reorganization of such Purchaser,
provided, in case of each assignment pursuant to clause (i) or (ii) above, that
(A) the Company receives notice o such assignment and (B) this Agreement may
only be assigned if, prior to such assignment, such assignee shall assume all of
the applicable assignor's obligations hereunder.
(d) Entire Agreement. This Agreement, together with the
Purchase Agreement, constitutes the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof and no party
shall be liable or bound to any other party in any manner by any warranties,
representations, or covenant except as specifically set forth herein or therein.
16
(e) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of holders
of at least a majority of number of shares of Registrable Securities then
outstanding affected by such amendment, modification, supplement, waiver or
departure.
(f) Notices, Etc. All notices and other communications
required or permitted hereunder shall be in writing and shall be mailed by
express, registered or certified mail, postage prepaid, return receipt
requested, sent by facsimile confirmed by first-class mail, postage prepaid, or
by courier service guaranteeing overnight delivery with charges prepaid, or
otherwise delivered by hand or by messenger, addressed to party at such party's
address and/or facsimile number as provided in Schedule I hereto or at such
other address and/or facsimile number as such party shall have furnished to the
other parties hereto in accordance with this Section 10(f). Any notice provided
hereunder shall be effective upon receipt.
(g) Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to the Purchasers, upon any breach or default of
the Company under this Agreement, shall impair any such right, power or remedy
of the Purchasers 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 other breach or default
theretofore or thereafter occurring.
(h) Remedies. Each holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of breach by it of the
provisions of this Agreement and hereby agrees to waive (to the extent permitted
by law) the defense in any action for specific performance that a remedy of law
would be adequate.
(i) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(j) Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable
17
or void, this Agreement shall continue in full force and effect without said
provision, it being intended that all of the rights and privileges of the
Purchasers shall be enforceable to the fullest extent permitted by law.
(k) 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.
(l) Attorney's Fees. In any action or proceeding brought to
enforce any provision of this Agreement, the Securities or the Purchase
Agreement, or where any provision hereof or thereof is validly asserted as a
defense, the successful party shall be entitled to recover reasonable attorney's
fees in addition to any other available remedy.
(m) Trustees Not Liable. Any obligation of the Trustees of
General Electric Pension Trust shall be enforceable solely against the assets of
such Pension Trust and not against any Trust individually (except with respect
to the actual fraud or willful misconduct of any such Trustee).
[Remainder of page intentionally left blank.]
18
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the 18th day of October, 1996.
The Company: Purchasers:
----------- ----------
CYBERSHOP, L.L.C. TRUSTEES OF GENERAL ELECTRIC
PENSION TRUST
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:
--------------------------- --------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name:
Title: Managing Member Title:
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PORRIDGE PARTNERS II
By:
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Partner
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the 18th day of October, 1996.
The Company: Purchasers:
----------- ----------
CYBERSHOP, L.L.C. TRUSTEES OF GENERAL ELECTRIC
PENSION TRUST
By: By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------- --------------------------------
Name: Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Member Title: Trustee
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PORRIDGE PARTNERS II
By:
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Partner
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the 18th day of October, 1996.
The Company: Purchasers:
----------- ----------
CYBERSHOP, L.L.C. TRUSTEES OF GENERAL ELECTRIC
PENSION TRUST
By: By:
--------------------------- --------------------------------
Name: Name:
Title: Managing Member Title:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PORRIDGE PARTNERS II
By:
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Partner
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the 18th day of October, 1996.
The Company: Purchasers:
----------- ----------
CYBERSHOP, L.L.C. TRUSTEES OF GENERAL ELECTRIC
PENSION TRUST
By: By:
--------------------------- --------------------------------
Name: Name:
Title: Managing Member Title:
-------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PORRIDGE PARTNERS II
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Partner
SCHEDULE I
----------
ADDRESSES OF THE PARTIES
------------------------
1. CyberShop, L.L.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
2. Trustee of General Electric Pension Trust
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
3. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
4. ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
5. Porridge Partners II
c/o ▇▇▇▇▇▇-▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇
AMENDMENT NO. 1
REGISTRATION RIGHTS AGREEMENT
This Amendment No. 1 (this "Amendment") dated as of June 3, 1997 to
that certain Registration Rights Agreement (the "Existing Registration Rights
Agreement") dated and effective as of October 18, 1996 by and among the Trustees
of the General Electric Pension Trust, a New York trust ("GEPT"), ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, an individual ("▇▇▇▇▇▇▇"), ▇▇▇▇▇▇ ▇. ▇▇▇▇ ("▇▇▇▇"), an individual,
Porridge Partners II, a Connecticut general partnership ("Porridge") and
CyberShop, L.L.C., a New Jersey limited liability company (the "Company").
RECITAL
Reference is made to (i) that certain Securities Purchase Agreement
dated as of October 18, 1996 among the Company, GEPT, ▇▇▇▇, ▇▇▇▇▇▇▇ and Porridge
(the "1996 Purchase Agreement") pursuant to which GEPT, ▇▇▇▇, ▇▇▇▇▇▇▇ and
Porridge purchased membership interests in, and were as admitted as members of,
the Company and (ii) that certain Second Securities Purchase Agreement of even
date herewith among the Company, GEPT and ▇▇▇▇▇▇▇ (the "1997 Purchase
Agreement") pursuant to which GEPT and ▇▇▇▇▇▇▇ are to make additional
contributions to the Company in the amounts of $400,000 and $50,000,
respectively (the "Additional Contributions"). In order to induce GEPT and
▇▇▇▇▇▇▇ to make the Additional Contributions to the Company, the Company has
agreed to amend the Existing Registration Rights Agreement in the manner set
forth herein and, in light of the benefit to be received by the Company from the
Additional Contributions, ▇▇▇▇ and ▇▇▇▇▇▇▇ have agreed to consent to this
Amendment.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Definition of "Securities"; Consent by Non-Participating Parties;
Automatic Amendment Relating to Possible ▇▇▇▇ Contribution. The term
"Securities" as used in the Existing Registration Rights Agreement shall have
the meaning provided in the 1996 Purchase Agreement and shall also include any
increases to the interests in the Company owned by GEPT and ▇▇▇▇▇▇▇ as a result
of the Additional Contributions to be made by each of them pursuant to the 1997
Purchase Agreement. ▇▇▇▇ and Porridge hereby agree and consent to the Amendment
contained in the preceding sentence. All parties hereto agree and acknowledge
that ▇▇▇▇ may (prior to the end of June 1997) make an additional contribution of
$50,000 to the Company in respect of his
membership interest in the Company on the same terms as the Additional
Contributions and that if and when such contribution is made by ▇▇▇▇, the
Existing Registration Rights Agreement, as amended hereby, shall be deemed to be
further amended, without further action or the execution of any instrument, such
that the term "Securities", as amended, hereby, shall also include increases in
▇▇▇▇'▇ interests as a result of his $50,000 additional contribution.
Section 2. Miscellaneous
-------------
(a) Full Force; Governing Law. Except as amended hereby, the Existing
Registration Rights Agreement remains in full force and effect. This Amendment
shall be governed in all respects by the laws of the State of New Jersey,
without reference to its conflicts of law principles.
(b) Counterparts; Captions. This Amendment may be executed in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument. The captions used
in this Amendment are used for convenience only and are not to be considered in
construing or interpreting this Amendment or the Existing Registration Rights
Agreement.
[Remainder of page intentionally left blank.]
2
IN WITNESS WHEREOF, the parties have executed this Amendment to the
Existing Registration Rights Agreement as of the day of , 1997.
CYBERSHOP, L.L.C. TRUSTEES OF GENERAL ELECTRIC
PENSION TRUST
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ By:
------------------------ -------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name:
Title: Managing Member Title:
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PORRIDGE PARTNERS II
By:
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Partner
3
IN WITNESS WHEREOF, the parties have executed this Amendment to the
Existing Registration Rights Agreement as of the 3rd day of June , 1997.
CYBERSHOP, L.L.C. TRUSTEES OF GENERAL ELECTRIC
PENSION TRUST
By: By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------ ------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Member Title: Trustee
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PORRIDGE PARTNERS II
By:
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Partner
4
IN WITNESS WHEREOF, the parties have executed this Amendment to the
Existing Registration Rights Agreement as of the 3rd day of June , 1997.
CYBERSHOP, L.L.C. TRUSTEES OF GENERAL ELECTRIC
PENSION TRUST
By: By:
------------------------ ------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name:
Title: Managing Member Title:
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PORRIDGE PARTNERS II
By:
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Partner
5
IN WITNESS WHEREOF, the parties have executed this Amendment to the
Existing Registration Rights Agreement as of the 3rd day of June , 1997.
CYBERSHOP, L.L.C. TRUSTEES OF GENERAL ELECTRIC
PENSION TRUST
By: By:
------------------------ ------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Name:
Title: Managing Member Title:
-----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
PORRIDGE PARTNERS II
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: General Partner
6