REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and entered
into as of March 30, 2000, by, and among Ebiz Enterprises, Inc., a Nevada
corporation (the "PURCHASER"), and Kim Goldberger and Joel Goldberger
(collectively, the "STOCKHOLDERS").
RECITALS:
A. Pursuant to the Exchange Agreement, the Purchaser has acquired from the
Stockholders all of the outstanding capital stock of InfoMagic, Inc., an Arizona
corporation, in exchange for 200,000 shares of the Common Stock of the
Purchaser; and
B. Under certain circumstances, the Purchaser may be required to issue
additional shares of Common Stock to the Stockholders; and
C. The Purchaser and the Stockholders desire to provide to the Stockholders
certain registration rights with respect to the Ebiz Shares.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions herein contained, the parties do hereby agree as follows:
1. REGISTRATION RIGHTS
1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:
"1933 ACT" means the Securities Act of 1933, as amended.
"1934 ACT" means the Securities Exchange Act of 1934, as amended.
"AGREEMENT" means this Registration Rights Agreement.
"COMMON STOCK" means the Common Stock, $.001 par value per share, of
the Purchaser.
"EBIZ" means the Ebiz Shares.
"EBIZ SHARES" means the 200,000 shares of Common Stock issued to the
Stockholders pursuant to the Exchange Agreement.
"PURCHASER" shall be as defined in the preamble hereof.
<PAGE>
"REGISTER", "REGISTERED" and "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement or similar
document in compliance with the 1933 Act and applicable rules and
regulations thereunder, and the declaration or ordering of effectiveness by
the SEC of such registration statement or document.
"SEC" means the Securities and Exchange Commission.
"STOCKHOLDERS" shall be as defined in the preamble hereof.
1.2 PIGGYBACK REGISTRATION. If at any time or from time to time the
Purchaser proposes to register (including for this purpose a registration
effected by the Purchaser for its own account or for shareholders other than the
Stockholders) any of its Common Stock or other securities under the 1933 Act
(other than a registration relating either solely to the sale of securities to
participants in a Purchaser stock option, stock purchase or similar plan or
solely to an SEC Rule 145 transaction, or a registration on any form which does
not include substantially the same information as would be required to be
included in a registration statement covering the sale of the Ebiz Shares), the
Purchaser shall, at such time, promptly give to the Stockholders written notice
thereof (which shall include a list of the jurisdictions in which the Purchaser
intends to attempt to qualify such securities under the applicable Blue Sky or
other state securities laws). Upon the written request of all of the
Stockholders given within 5 days after the receipt of such notice given by the
Purchaser, the Purchaser may, in its sole discretion and subject to the approval
of JEM Ventures EBIZ, LLC, cause to be included in such registration (and any
related qualification under Blue Sky laws or other compliance thereunder), and
in any underwriting involved therein, all, but not less than all, of the Ebiz
Shares.
2. OBLIGATIONS OF THE PARTIES
2.1 Purchaser's Obligations. Whenever the Purchaser proposes to
register its Common Stock and, as provided for in Section 1.2, the Purchaser
receives a request to include the Ebiz Shares, if the Purchaser approves such
request, the Purchaser shall thereafter:
(a) Prepare and file with the SEC a registration statement with
respect to such Common Stock, including the Ebiz Shares, and use
commercially reasonable efforts to cause such registration statement to
become effective and keep such registration statement effective for up to 1
year.
(b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with
such registration statement as may be necessary to comply with the
provisions of the 1933 Act with respect to the disposition of all
securities covered by such registration statement.
(c) Furnish to the Stockholders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the 1933 Act, and such other documents as they may
reasonably request in order to facilitate the disposition of Ebiz Shares
owned by them.
2
<PAGE>
(d) 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
Stockholder participating in such underwriting shall also enter into and
perform its obligations under such an agreement.
(e) Notify each Stockholder 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.
(f) Promptly after any registration statement with respect to any
Ebiz Shares becomes effective, notify each Stockholders in writing of such
effectiveness.
2.2 STOCKHOLDER'S OBLIGATION. Each Stockholder shall furnish to the
Purchaser information regarding himself, the Ebiz Shares held by him and the
intended method of disposition of such shares as shall be reasonably required to
effect the registration of such Ebiz Shares.
2.3 EXPENSES OF REGISTRATION. All expenses incurred in connection with
registrations, filings or qualifications pursuant to this Agreement, including
without limitation all registration, filing and qualification fees, printers and
accounting fees, fees and disbursement of counsel for the Purchaser (but not for
Stockholders' counsel), provided that shall be borne by the Purchaser; PROVIDED,
HOWEVER, that (i) the Purchaser shall not be required to pay for any expenses of
any registration proceeding begun pursuant to Section 1.2 if the registration
request is subsequently withdrawn at the request of all of the Stockholders (in
which case the Stockholders shall bear such expenses pro rata on the basis of
the number of their Ebiz Shares requested to be included in the registration);
and (ii) Purchaser shall be responsible for blue sky fees and costs solely to
qualify the Ebiz Shares for exemption from registration for resale of such
securities under applicable jurisdictions.
3. UNDERWRITING REQUIREMENTS. In connection with any offering involving an
underwriting of shares being issued by the Purchaser, the Purchaser shall not
include any of the Stockholders' Ebiz Shares in such underwriting (a) unless the
Stockholders accept the terms of the underwriting (such to be in customary form)
as agreed upon between the Purchaser and the underwriter chosen by it; and/or
(b) if the underwriter determines that marketing factors require a limitation on
the number of shares to be underwritten in connection with such offering.
4. DELAY OF REGISTRATION. No Stockholder shall have any right to obtain or
seek an injunction restraining or otherwise delaying any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Agreement.
5. GENERAL
5.1 NOTICES. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be delivered by hand or
mailed by first class certified or registered mail, return receipt requested,
3
<PAGE>
postage prepaid, to the Stockholders at 11950 North Highway 89, Flagstaff,
Arizona 86004, and to the Purchaser at 15695 North 83rd Way, Scottsdale, Arizona
85260, Attention: President. Any party may change its address for purposes
hereof by notice to all other parties in the manner provided above.
5.2 AMENDMENTS AND WAIVERS. Except as otherwise provided in this
Agreement, the terms and provisions of this Agreement may not be modified or
amended except in a writing executed by the Purchaser and all of the
Stockholders. No waivers of or exceptions to any term, condition or provision of
this Agreement, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such term, condition or
provision.
5.3 ENTIRE AGREEMENT. With respect to the subject matter hereof, this
Agreement, embodies the entire agreement and understanding between the
Stockholders and the Purchaser, and supersedes all prior agreements and
understandings relating to such subject matter.
5.4 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.5 HEADINGS. The headings of the sections, subsections and paragraphs
of this Agreement have been added for convenience or reference only and shall
not be deemed to be a part of this Agreement.
5.6 SEVERABILITY. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions of this Agreement, and, to the extent permitted by law,
any determination of invalidity or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
5.7 ASSIGNMENT. This Agreement shall inure to the benefit of and be
binding upon the respective heirs, personal representatives, successors and
assigns of the parties. Neither party shall assign any of its rights or
obligations hereunder to any third party without the prior written consent of
the other party.
5.8 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Arizona, without reference to
conflicts of law principles, as such law applies to agreements between Arizona
residents entered into and to be performed entirely within Arizona.
4
<PAGE>
IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of the
day and year first above written.
PURCHASER:
EBIZ ENTERPRISES, INC.
By: /s/ Jeffrey I. Rassas
-------------------------------------
Name: Jeffrey I. Rassas
-----------------------------------
Title: Chief Executive Officer
----------------------------------
STOCKHOLDERS:
/s/ Kim Goldberger
----------------------------------------
Kim Goldberger
/s/ Joel Goldberger
----------------------------------------
Joel Goldberger
5
