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Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this
"
Agreement "),
dated as of July 15, 2008, by and between
UBID.COM HOLDINGS, INC., a
Delaware corporation, (the "
Company "),
and
FUSION CAPITAL FUND II, LLC, an
Illinois limited liability company (together with it permitted
assigns, the “
Buyer ”).
Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Common Stock
Purchase Agreement by and between the parties hereto, dated as of
the date hereof (as amended, restated, supplemented or otherwise
modified from time to time, the "
Purchase Agreement ").
WHEREAS:
A.
The
Company has agreed, upon the terms and subject to the
conditions of the Purchase Agreement, to issue to the Buyer
(i) up to Ten Million Dollars ($10,000,000) of the Company's
common stock, par value $0.001 per share (the "
Common Stock ")
(the "
Purchase Shares "),
and (ii) such number of shares of Common Stock as is required
pursuant to Section 4(e) of the Purchase Agreement (the
"Commitment Shares" );
and
B.
To
induce the Buyer to enter into the Purchase Agreement, the
Company has agreed to provide certain registration rights
under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, or any similar successor statute
(collectively, the "
1933 Act "),
and applicable state securities laws.
NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained
herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged,
the Company and the Buyer hereby agree as follows:
1.
DEFINITIONS .
As
used in this Agreement, the following terms shall have the
following meanings:
a.
"
Investor "
means the Buyer, any transferee or assignee thereof to whom a Buyer
assigns its rights under this Agreement and who agrees to become
bound by the provisions of this Agreement in accordance with
Section 9 and any transferee or assignee thereof to whom a
transferee or assignee assigns its rights under this Agreement and
who agrees to become bound by the provisions of this Agreement in
accordance with Section 9.
b.
"
Person "
means any person or entity including any corporation, a limited
liability company, an association, a partnership, an organization,
a business, an individual, a governmental or political subdivision
thereof or a governmental agency.
c.
"
Register ,"
"
registered ,"
and "
registration "
refer to a registration effected by preparing and filing one or
more registration statements of the Company in compliance with the
1933 Act and pursuant to Rule 415 under the 1933 Act or any
successor rule providing for offering securities on a continuous
basis ("
Rule 415 "),
and the declaration or ordering of effectiveness of such
registration statement(s) by the United States Securities and
Exchange Commission (the "
SEC ").
d.
"
Registrable Securities "
means the Purchase Shares which have been, or which may from time
to time be, issued or issuable upon purchases of the Available
Amount under the Purchase Agreement (without regard to any
limitation or restriction on purchases) and the Commitment Shares
issued or issuable to the Investor and any shares of capital stock
issued or issuable with respect to the Purchase Shares, the
Commitment Shares
, or
the Purchase Agreement as a result of any stock split, stock
dividend, recapitalization, exchange or similar event or otherwise,
without regard to any limitation on purchases under the Purchase
Agreement.
e.
"
Registration Statement "
means the registration statement of the Company covering only the
sale of the Registrable Securities.
2.
REGISTRATION .
a.
Mandatory Registration. The
Company shall within twenty (20) Business Days from the date hereof
file with the SEC the Registration Statement. The Registration
Statement shall register only the Registrable Securities and no
other securities of the Company. The Investor and its counsel shall
have a reasonable opportunity to review and comment upon such
registration statement or amendment to such registration statement
and any related prospectus prior to its filing with the SEC.
Investor shall furnish all information reasonably requested by the
Company for inclusion therein. The Company shall use its best
efforts to have the Registration Statement or amendment declared
effective by the SEC at the earliest possible date. The Company
shall use reasonable best efforts to keep the Registration
Statement effective pursuant to Rule 415 promulgated under the 1933
Act and available for sales of all of the Registrable Securities at
all times until the earlier of (i) the date as of which the
Investor may sell all of the Registrable Securities without
restriction pursuant to Rule 144(k) promulgated under the 1933 Act
(or successor thereto) or (ii) the date on which (A) the Investor
shall have sold all the Registrable Securities and no Available
Amount remains under the Purchase Agreement (the "
Registration Period ").
The Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they
were made, not misleading.
b.
Rule 424 Prospectus .
The Company shall, as required by applicable securities
regulations, from time to time file with the SEC, pursuant to Rule
424 promulgated under the 1933 Act, the prospectus and prospectus
supplements, if any, to be used in connection with sales of the
Registrable Securities under the Registration Statement. The
Investor and its counsel shall have a reasonable opportunity to
review and comment upon such prospectus prior to its filing with
the SEC. The Investor shall use its reasonable best efforts to
comment upon such prospectus within one (1) Business Day from the
date the Investor receives the final version of such
prospectus.
c.
Sufficient Number of Shares Registered .
In the event the number of shares available under the Registration
Statement is insufficient to cover all of the Registrable
Securities, the Company shall amend the Registration Statement or
file a new registration statement (a ”
New Registration Statement ”),
so as to cover all of such Registrable Securities as soon as
practicable, but in any event not later than ten (10) Business Days
after the necessity therefor arises. The Company shall use it
reasonable best efforts to cause such amendment and/or New
Registration Statement to become effective as soon as practicable
following the filing thereof.
3.
RELATED OBLIGATIONS .
With
respect to the Registration Statement and whenever any
Registrable Securities are to be registered pursuant to
Section 2(b) including on any New Registration Statement, the
Company shall use its reasonable best efforts to effect the
registration of the Registrable Securities in accordance with
the intended method of disposition thereof and, pursuant
thereto, the Company shall have the following
obligations:
a.
The
Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to any
registration statement and the prospectus used in connection
with such registration statement, which prospectus is to be
filed pursuant to Rule 424 promulgated under the 1933 Act, as
may be necessary to keep the Registration Statement or any New
Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the
provisions of the 1933 Act with respect to the disposition of
all Registrable Securities of the Company covered by the
Registration Statement or any New Registration Statement until
such time as all of such Registrable Securities shall have
been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in
such registration statement.
b.
The
Company shall permit the Investor to review and comment upon
the Registration Statement or any New Registration Statement
and all amendments and supplements thereto at least two (2)
Business Days prior to their filing with the SEC, and not file
any document in a form to which Investor reasonably objects.
The Investor shall use its reasonable best efforts to comment
upon the Registration Statement or any New Registration
Statement and any amendments or supplements thereto within two
(2) Business Days from the date the Investor receives the
final version thereof. The Company shall furnish to the
Investor, without charge any correspondence from the SEC or
the staff of the SEC to the Company or its representatives
relating to the Registration Statement or any New Registration
Statement.
c.
Upon
request of the Investor, the Company shall furnish to the
Investor, (i) promptly after the same is prepared and filed
with the SEC, at least one copy of such registration statement
and any amendment(s) thereto, including financial statements
and schedules, all documents incorporated therein by reference
and all exhibits, (ii) upon the effectiveness of any
registration statement, a copy of the prospectus included in
such registration statement and all amendments and supplements
thereto (or such other number of copies as the Investor may
reasonably request) and (iii) such other documents, including
copies of any preliminary or final prospectus, as the Investor
may reasonably request from time to time in order to
facilitate the disposition of the Registrable Securities owned
by the Investor.
d.
The
Company shall use reasonable best efforts to (i) register and
qualify the Registrable Securities covered by a registration
statement under such other securities or "blue sky" laws of
such jurisdictions in the United States as the Investor
reasonably requests, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective
amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii)
take such other actions as may be necessary to maintain such
registrations and qualifications in effect at all times during
the Registration Period, and (iv) take all other actions
reasonably necessary or advisable to qualify the Registrable
Securities for sale in such jurisdictions; provided, however,
that the Company shall not be required in connection therewith
or as a condition thereto to (x) qualify to do business in any
jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d), (y) subject itself to
general taxation in any such jurisdiction, or (z) file a
general consent to service of process in any such
jurisdiction. The Company shall promptly notify the Investor
who holds Registrable Securities of the receipt by the Company
of any notification with respect to the suspension of the
registration or qualification of any of the Registrable
Securities for sale under the securities or "blue sky" laws of
any jurisdiction in the United States or its receipt of actual
notice of the initiation or threatening of any proceeding for
such purpose.
e.
As
promptly as practicable after becoming aware of such event or
facts, the Company shall notify the Investor in writing of the
happening of any event or existence of such facts as a result
of which the prospectus included in any 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,
in light of the circumstances under which they were made, not
misleading, and promptly prepare a supplement or amendment to
such registration statement to correct such untrue statement
or omission, and deliver a copy of such supplement or
amendment to the Investor (or such other number of copies as
the Investor may reasonably request). The Company shall also
promptly notify the Investor in writing (i) when a prospectus
or any prospectus supplement or post-effective amendment has
been filed, and when a registration statement or any
post-effective amendment has become effective (notification of
such effectiveness shall be delivered to the Investor by
facsimile on the same day of such effectiveness and by
overnight mail), (ii) of any request by the SEC for amendments
or supplements to any registration statement or related
prospectus or related information, and (iii) of the Company's
reasonable determination that a post-effective amendment to a
registration statement would be appropriate.
f.
The
Company shall use its reasonable best efforts to prevent the
issuance of any stop order or other suspension of
effectiveness of any registration statement, or the suspension
of the qualification of any Registrable Securities for sale in
any jurisdiction and, if such an order or suspension is
issued, to obtain the withdrawal of such order or suspension
at the earliest possible moment and to notify the Investor of
the issuance of such order and the resolution thereof or its
receipt of actual notice of the initiation or threat of any
proceeding for such purpose.
g.
The
Company shall (i) cause all the Registrable Securities to be
listed on each securities exchange on which securities of the
same class or series issued by the Company are then listed, if
any, if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (ii) secure
designation and quotation of all the Registrable Securities on
the Principal Market. The Company shall pay all fees and
expenses in connection with satisfying its obligation under
this Section.
h.
The
Company shall cooperate with the Investor to facilitate the
timely preparation and delivery of certificates (not bearing
any restrictive legend) representing the Registrable
Securities to be offered pursuant to any registration
statement and enable such certificates to be in such
denominations or amounts as the Investor may reasonably
request and registered in such names as the Investor may
request.
i.
The
Company shall at all times provide a transfer agent and
registrar with respect to its Common Stock.
j.
If
reasonably requested by the Investor, the Company shall (i)
immediately incorporate in a prospectus supplement or
post-effective amendment such information as the Investor
believes should be included therein relating to the sale and
distribution of Registrable Securities, including, without
limitation, information with respect to the number of
Registrable Securities being sold, the purchase price being
paid therefor and any other terms of the offering of the
Registrable Securities; (ii) make all required filings of such
prospectus supplement or post-effective amendment as soon as
notified of the matters to be incorporated in such prospectus
supplement or post-effective amendment; and (iii) supplement
or make amendments to any registration statement.
k.
The
Company shall use its reasonable best efforts to cause the
Registrable Securities covered by the any registration
statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to
consummate the disposition of such Registrable
Securities.
l.
Within
one (1) Business Day after any registration statement which
includes the Registrable Securities is ordered effective by
the SEC, the Company shall deliver, and shall cause legal
counsel for the Company to deliver, to the transfer agent for
such Registrable Securities (with copies to the Investor)
confirmation that such registration statement has been
declared effective by the SEC in the form attached hereto
as
Exhibit A .
Thereafter, if requested by the Buyer at any time, the Company
shall require its counsel to deliver to the Buyer a written
confirmation whether or not the effectiveness of such registration
statement has lapsed at any time for any reason (including, without
limitation, the issuance of a stop order) and whether or not the
registration statement is current and available to the Buyer for
sale of all of the Registrable Securities.
m.
The
Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investor of
Registrable Securities pursuant to any
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