CYBER DIGITAL, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT ("Agreement") is entered into as of
_____________, 1996, by and among CYBER DIGITAL, INC., a New York corporation
("Company"), and the subscribers ("Subscribers") to the Company's offering
("Offering") of up to Eight Million Fifty Thousand ($8,050,000) of Series A
Preferred Stock ("Preferred Stock") pursuant to the Regulation S Subscription
Agreement between the Company and the Subscribers of even date herewith
("Subscription Agreement").
1. Definitions. For purposes of this Agreement:
(a) The terms "register", "registered," and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act of 1933 (the
"Act"), and pursuant to Rule 415 under the Act or any successor rule, and the
declaration or ordering of effectiveness of such registration statement or
document;
(b) For purposes of the Required Registration under Section 2
hereof, the term "Registrable Securities" means the Company's Common Stock
(together with any capital stock issued as a dividend on, in replacement of, in
exchange for, or otherwise in respect of such Common Stock or issued pursuant to
Section 17 hereof, the "Common Stock") issuable or issued upon conversion of the
Preferred Stock and exercise of the Warrants. For purposes of a Demand
Registration under Section 3 hereof or a Piggyback Registration under Section 4
hereof, the term "Registrable Securities" means the Company's Common Stock
issuable or issued upon conversion of the Preferred Stock in the Offering and
exercise of the Warrants; provided, however, that after the expiration of the
Restricted Period (as defined in the Subscription Agreement), for purposes of
Section 3 and Section 4, shares of Common Stock obtainable on conversion of the
Preferred Stock and exercise of the Warrants (in whole or in part) shall not
constitute Registrable Securities, if those shares of Common Stock may be sold
or transferred in the U.S. free of any restrictive legend, including without
limitation under Rule 144;
(c) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock which
have been issued or are issuable upon conversion of the Preferred Stock or
exercise of the Warrants at the time of such determination;
(d) The term "Holder" means any person owning or having the
right to acquire Registrable Securities or any permitted assignee thereof;
(e) The terms "Warrant" and "Warrants" refer to the warrant or
warrants issued to Subscribers as securities in connection with the Offering;
and
(f) The term "Due Date" means the date which is one hundred
five (105) days after the Last Closing (as defined in the Subscription
Agreement) of the Offering.
2. Required Registration.
(a) Within forty five (45)days after the Last Closing (as
defined in the Subscription Agreement) of the Offering, the Company shall file a
registration statement ("Registration Statement") on Form S-3 (or other suitable
form), covering the resale of all shares of Registrable Securities then
outstanding.
(b) The Registration Statement shall be prepared as a "shelf"
registration statement under Rule 415, and shall be maintained effective until
the earlier of (i) the date that the distribution described in the Registration
Statement is completed or (ii) the date that Common Stock covered by the
Registration Statement is immediately transferable, without volume limitations,
pursuant to Rule 144 or another available exemption under the Act. The Company
shall use its best efforts to have the Registration Statement declared effective
within one hundred five (105) days of the Last Closing, and shall in any event
have the Registration Statement declared effective within one hundred twenty
(120) days of the Last Closing.
(c) The Holders have the right to convert the Preferred Stock
into Common Stock pursuant to the terms of the Subscription Agreement and the
Certificate of Designation of Series A Preferred Stock of the Company and sell
the Common Stock under Regulation S and applicable exemptions until such time
that the Registration Statement becomes effective.
(d) Notwithstanding anything to the contrary contained herein,
any Holder (together with any assignee of its rights) (collectively referred to
as "Excluded Holders") shall be entitled, by written notice to the Company
delivered at any time prior to the filing of the Registration Statement
contemplated by this Section 2, to elect to have the Registrable Securities
issued or issuable to it excluded from the Registration Statement. In the event
a Holder elects not to have its Registrable Securities included in the
Registration Statement, the Holder shall, nonetheless, and notwithstanding
anything herein to the contrary, have the right (i) upon written notice to the
Company from Holders of at least twenty-five (25%) of the Registrable Securities
not subject to another registration statement then on file with the Securities
and Exchange Commission, at any time following the expiration of the seventy
five (75) day period following the Last Closing, to cause the Company to effect
a Demand Registration (as defined in Section 3) registering the Registrable
Securities held by such Holders on Form S-3 (or other suitable form, subject to
the approval of such Holders), and (ii) at any time following the expiration of
the thirty (30) day period following the Due Date, to have its shares included
in any Piggyback Registration (as defined in Section 4), in each case in
accordance with the provisions of Sections 3 and 4 hereof. In connection with a
Demand Registration initiated by the Excluded Holders under this Subsection
2(d), the Company shall pay all costs and expenses of Demand Registration in
accordance with Section 9. The Excluded Holders' rights to include their
Registrable Securities in a Piggyback Registration or a Demand Registration
shall be limited to those instances in which their Registrable Securities are
not otherwise immediately transferable pursuant to Rule 144 or another available
exemption under the Act.
3. Demand Registration.
(a) If the Registration Statement described in Section 2 is
not effective by the Due Date, the Holders of Registrable Securities obtained or
obtainable upon conversion of at least twenty-five percent (25%) of the shares
of the Preferred Stock outstanding may notify the Company in writing that they
demand that the Company file a registration statement under the Act covering the
registration of all of the Registrable Securities then outstanding. Upon receipt
of such notice, the Company shall, within ten (10) days, give written notice of
such request to all Holders and shall, subject to the limitations of subsection
3(b), file as soon as practicable, and in any event within thirty (30) days of
the receipt of such request, the registration under the Act of all Registrable
Securities which the Holders request, by notice given to the Company within ten
(10) days of receipt of the Company's notice, to be registered as expeditiously
as reasonably possible after the mailing of such notice by the Company (a
"Demand Registration").
(b) If the Holders initiating the registration request
hereunder ("Initiating Holders") intend to distribute the Registrable Securities
covered by their request by means of an underwriting, they shall so advise the
Company as a part of their request made pursuant to this Section 3 and the
Company shall include such information in the written notice referred to in
subsection 3(a). In such event, the right of any Holder to include his
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall (together with the Company as provided in subsection
7(f)) enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by a majority in
interest of the Initiating Holders, and reasonably acceptable to the Company;
provided that no Holder shall be required to make any representations other than
with respect to its ownership of Registered Securities and its intended method
of distribution.
(c) The Company agrees to include all Registrable Securities
held by all Holders in such Registration Statement without cutback or reduction
unless cutbacks are required by the underwriter. In the event the underwriter
requires a cutback or reduction, any Holders of the Registrable Securities which
were not included in such Registration Statement shall be entitled to additional
Demand Registrations for such excluded securities on the same terms as the
Demand Registration described in this Agreement.
(d) The Company is not obligated to effect a demand
registration under this Section 3 if in the written opinion of counsel to the
Company reasonably acceptable to the person or persons from whom written request
for registration has been received (and satisfactory to the Company's transfer
agent to permit the transfer) that registration under the Act is not required
for the immediate transfer of the Registrable Securities pursuant to Rule 144 or
other applicable provision.
(e) The Company represents that it will use its best efforts
to take such actions as are necessary to become eligible to use Form S-3 for the
registration contemplated hereby.
4. Piggyback Registration. If the Registration Statement
described in Section 2 is not effective by the Due Date, and no demand for a
Demand Registration has been made pursuant to Section 3, and if (but without any
obligation to do so), the Company proposes to register (including for this
purpose a registration effected by the Company for shareholders other than the
Holders) any of its Common Stock under the Act in connection with the public
offering of such securities (other than a registration relating solely to the
sale of securities to participants in a Company stock plan or a registration on
Form S-4 promulgated under the Act or any successor or similar form registering
stock issuable upon a reclassification, upon a business combination involving an
exchange of securities or upon an exchange offer for securities of the issuer or
another entity), the Company shall, at such time, promptly give each Holder
written notice of such registration. Upon the written request of each Holder
given by fax within ten (10) days after mailing of such notice by the Company,
which request shall state the intended method of disposition of such shares by
such Holder, the Company shall use its best efforts to cause to be registered
under the Act all of the Registrable Securities that each such Holder has
requested to be registered (a "Piggyback Registration").
5. Limitation on Obligations to Register.
(a) In the case of a Piggyback Registration on an underwritten
public offering by the Company, if the managing underwriter determines and
advises in writing that the inclusion in the registration statement of all
Registrable Securities proposed to be included would interfere with the
successful marketing of the securities proposed to be registered by the Company,
then the number of such Registrable Securities to be included in the
registration statement shall be allocated among all Holders who had requested
Piggyback Registration, in the proportion that the number of Registrable
Securities which each such Holder seeks to register bears to the total number of
Registrable Securities sought to be included by all Holders.
(b) Notwithstanding anything to the contrary herein, the
Company shall have the right (i) to defer the initial filing or request for
acceleration of effectiveness of any Demand Registration or Piggyback
Registration or (ii) after effectiveness, to suspend effectiveness of any such
registration statement, if, in the good faith judgment of the board of directors
of the Company and upon the advice of counsel of the managing underwriter (if
any) of the offering, such delay in filing or requesting acceleration of
effectiveness or such suspension of effectiveness is necessary in light of the
existence of material non-public information (financial or otherwise) concerning
the Company disclosure of which at the time is not, in the opinion of the board
of directors of the Company upon the advice of counsel, (A) otherwise required
and (B) in the best interests of the Company; provided however that the Company
will use its best efforts to terminate such delay or suspension as soon as
practicable and, in any event will not delay effectiveness of such registration
for more than three (3) months from the date of the demand or suspend
effectiveness for more than twenty (20) days, unless it is then engaged in an
acquisition that would make such registration impracticable, in which case it
will use its best efforts to eliminate such impracticability as soon as
possible.
6. Obligations to Increase Available Shares. In the event that
the number of shares available under a registration statement filed pursuant to
Section 3 is insufficient to
cover all of the Registrable Securities then outstanding, the Company shall
amend that registration statement, or file a new registration statement, or
both, so as to cover all shares of Registrable Securities then outstanding. The
Company shall effect such amendment or new registration within sixty (60) days
of the date the registration statement filed under Section 3 is insufficient to
cover all the shares of Registrable Securities then outstanding. Any
Registration Statement filed hereunder shall, to the extent permissible by the
Rules of the Securities and Exchange Commission ("SEC"), state that, in
accordance with Rule 416 under the Act, such Registration Statement also covers
such indeterminate numbers of additional shares of Common Stock as may become
issuable upon conversion of the Preferred Stock to prevent dilution resulting
from stock changes or by reason of changes in the conversion price in accordance
with the terms thereof.
7. Obligations of the Company. Whenever required under this
Agreement to effect the registration of any Registrable Securities, the Company
shall, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its best efforts to cause
such registration statement to become effective.
(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 Act with respect to the disposition of all securities covered
by such registration statement.
(c) With respect to any Demand Registration, use best efforts
to keep such registration statement effective until the earlier of (i) the date
that the distribution described in the registration statement is completed or
(ii) the date that Common Stock covered by the registration statement is
immediately transferable, without volume limitations, pursuant to Rule 144 or
another available exemption under the Act.
(d) Furnish to the Holders such reasonable numbers of copies
of a prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by them.
Xxxxxx Investments, LLC shall be furnished with copies of drafts of all filings
(including supplements and amendments) prior to filing and given sufficient time
to distribute such documents to the Subscribers and to receive their comments
thereon.
(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 of the Registrable Securities covered by such registration statement,
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions.
(f) 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.
(g) 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 Act upon 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.
(h) Furnish, at the request of any Holder whose shares are
being registered pursuant to this Agreement, on the date that such Registrable
Securities are delivered to the underwriters for sale in connection with a
registration pursuant to this Agreement, 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) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders requesting
registration of Registrable Securities and (ii) a letter dated such date, from
the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the Holders requesting registration of Registrable Securities.
(i) Maintain the listing of the Common Stock on the OTC
Bulletin Board or other automated quotation system or a national securities
exchange.
8. Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Agreement
that the selling Holders shall furnish to the Company such information regarding
themselves, the Registrable Securities held by them, and the intended method of
disposition of such securities as shall be required to effect the registration
of their Registrable Securities or to determine that registration is not
required pursuant to Rule 144 or other applicable provision of the Act.
9. Expenses of Required or Demand Registration. All expenses
other than underwriting discounts and commissions incurred in connection with
registrations, filings or qualifications pursuant to Sections 2 or 3, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company, and
including the reasonable fees and disbursements incurred of only one counsel for
the selling Holders shall be borne by the Company; provided, however, that the
Company shall not be required to pay for any expenses of any registration
proceeding begun pursuant to Sections 2 or 3 if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the
Registrable Securities to be registered (in which case all Holders who had
requested such registration shall bear such expenses); provided further,
however, that if at the
time of such withdrawal, the Holders have learned of a material adverse change
in the condition, business, or prospects of the Company from that known to the
Holders at the time of their request, then the Holders shall not be required to
pay any of such expenses and shall retain their rights pursuant to Sections 2
and 3.
10. Expenses of Company Registration. The Company shall bear
and pay all expenses incurred in connection with any registration, filing or
qualification of Registrable Securities with respect to the registrations
pursuant to Section 4 for each Holder, including (without limitation) all
registration, filing, and qualification fees, printers and accounting fees
relating or apportionable thereto (and including the reasonable fees and
disbursements incurred of only one counsel for the selling Holders selected by
them), but excluding underwriting discounts and commissions relating to
Registrable Securities.
11. Indemnification. In the event any Registrable Securities
are included in a registration statement under this Agreement:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless each "Holder Indemnified Persons" (defined for purposes of
this Section 11 as each Holder, the officers and directors of each Holder acting
in their capacity as such, any underwriter (as defined in the Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Act or the Securities Exchange Act of 1934, as amended (the
"1934 Act")), against any losses, claims, damages, expenses, or liabilities
(joint or several) (hereinafter referred to singularly as "Loss" and
collectively as "Losses") to which they may become subject under the Act, the
1934 Act or other federal or state law, insofar as such Losses (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "Violation"): (i) any untrue statement,
or alleged untrue statement, of a material fact contained in such registration
statement, including any prospectus contained therein or any amendments or
supplements thereto, or (ii) the 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 the Company will reimburse each such
Holder Indemnified Person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such Loss or action;
provided, however, that the indemnity agreement contained in this subsection
11(a) shall not apply to amounts paid in settlement of any such Loss or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), nor shall the Company be liable in any such
case for any such Loss or action to the extent that it arises out of or is based
upon a Violation which occurs in either (i) reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by the Holder Indemnified Person seeking indemnification or (ii)
based upon a prospectus which included a Violation after the Company has advised
the Holder seeking indemnification not to sell pursuant to such prospectus, and
has made available an amended or supplemental prospectus that corrects such
Violation.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the "Company Indemnified Persons" (defined for the
purpose of this Section 11 as the Company, each of its directors in their
capacity as such, each of its officers who have signed the
registration statement in their capacity as such, each person, if any, who
controls the Company within the meaning of the Act in their capacity as such,
any underwriter and any other Holder Indemnified Person selling securities in
such registration statement), against any Loss (joint or several) to which the
Company or any such director, officer, controlling person, or underwriter or
controlling person, or other such Holder Indemnified Person may become subject,
under the Act, the 1934 Act or other federal or state law, insofar as such Loss
(or actions in respect thereto) arises out of or is based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will reimburse any legal or other expenses reasonably incurred by the
Company and any such Company Indemnified Person in connection with investigating
or defending any such Loss or action; provided, however, that the indemnity
agreement contained in this subsection 11(b) shall not apply to amounts paid in
settlement of any such Loss or action if such settlement is effected without the
consent of the Holder, which consent shall not be unreasonably withheld;
provided, that, in no event shall any indemnity under this subsection 11(b)
exceed the gross proceeds from the offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 11 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 11, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the reasonably incurred fees and
expenses to be paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests between such
indemnified party and any other party represented by such counsel in such
proceeding provided, however, that in the event the Company is the indemnifying
party, it shall pay for only one counsel for all of the Subscribers in this
Offering and their related indemnified parties. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, if prejudicial to its ability to defend such action, shall
relieve such indemnifying party of any liability to the indemnified party under
this Section 11, but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability that it may have to any
indemnified party otherwise than under this Section 11 to the extent it is
prejudicial.
(d) The obligations of the Company and Holders under this
Section 11 shall survive the redemption and conversion, if any, of the Preferred
Stock, the completion of any offering of Registrable Securities in a
registration statement under this Agreement, and otherwise.
12. Reports Under Securities Exchange Act of 1934. With a view
to making available to the Holders the benefits of Rule 144 promulgated under
the Act and any other rule or regulation of the SEC that may at any time permit
a Holder to sell securities of the Company to the public without registration,
the Company agrees to:
(a) make and keep public information available, as those terms
are understood and defined in SEC Rule 144, at all times;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, forthwith upon request (i) a written statement by the
Company, if true, that it has complied with the reporting requirements of SEC
Rule 144 (at any time after ninety (90) days after the effective date of the
first registration statement filed by the Company), the Act and the 1934 Act,
(ii) a copy of the most recent annual or quarterly report of the Company and
such other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested in availing any Holder of any rule or
regulation of the SEC which permits the selling of any such securities without
registration.
13. Amendment of Registration Rights. Any provision of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company, and the holders of
a majority of the Registrable Securities then outstanding. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon each
Holder, each future Holder, and the Company; provided, however, that no
amendment or waiver that materially and adversely affects the rights of any
Holder shall be effective against such Holder unless such Holder agrees thereto.
14. Notices. All notices required or permitted under this
Agreement shall be made in writing signed by the party making the same, shall
specify the section under this Agreement pursuant to which it is given, and
shall be addressed if to (i) the Company at: President, 000 Xxxx Xxxxxx, Xxxxx
0000, Xxxxxxxxx, Xxx Xxxx, 00000, Telephone No. (000) 000-0000, Telecopy No.
(000) 000-0000 and (ii) the Holders at their respective last addresses as set
forth on the Company's register for the Preferred Stock, or such address as the
party shall have furnished in writing as a new address to be entered on such
register. Any notice, except as otherwise provided in this Agreement, shall be
made by fax and shall be deemed given at the time of transmission of the fax.
15. Termination. This Agreement shall terminate on the later
to occur of (a) the date that is five (5) years from the date of this Agreement
and (b) the date that is ninety (90) days after the date on which all the
Warrants have been exercised; but without prejudice to (i) the parties' rights
and obligations arising from breaches of this Agreement occurring prior to such
termination or (ii) other indemnification obligations under this Agreement.
16. Assignment. No assignment, transfer or delegation, whether
by operation of law or otherwise, of any rights or obligations under this
Agreement by the Company or any Holder, respectively, shall be made without the
prior written consent of the majority in interest of the Holders or the Company,
respectively; provided that the rights of a Holder may be transferred to a
subsequent holder of the Holder's Registrable Securities (provided such
transferee
shall provide to the Company, together with or prior to such transferee's
request to have such Registrable Securities included in a Demand Registration or
Piggyback Registration, a writing executed by such transferee agreeing to be
bound as a Holder by the terms of this Agreement); and provided further that the
Company may transfer its rights and obligations under this Agreement to a
purchaser of all or a substantial portion of its business if the obligations of
the Company under this Agreement are assumed in connection with such transfer,
either by merger or other operation of law (which may include without limitation
a transaction whereby the Registrable Securities are converted into securities
of the successor in interest) or by specific assumption executed by the
transferee.
17. Payments for Failure to Register or Failure to List. If
the Registration Statement required under Section 2 hereof is not filed on or
prior to ninety (90) days after the Last Closing, or if a Registration Statement
filed pursuant to Section 3 is not effective within one hundred twenty (120)
days of a Demand Registration or if the Company fails to respond to any request
for information from the SEC related to such Registration Statement within
fifteen (15) days of such request, then the Company shall pay to all Holders of
outstanding Preferred Stock an aggregate amount equal to two percent (2%) per
month of the aggregate amount of Preferred Stock sold in the Offering,
compounded monthly, and accruing daily, payable in Common Stock, which Common
Stock shall also be deemed "Registrable Securities" hereunder. If, the Company
is not eligible to effect a Registration under Form S-3, or other appropriate
registration statement, at the time of a Demand Registration under the terms of
this agreement solely through the act or failure to act by the Company, and not
due to a change in statute or regulation or other fact circumstance not under
the Company's control, then the Company shall pay to all Holders of outstanding
Preferred Stock an aggregate penalty equal to the amount of the Conversion
Default Payment ("Conversion Default Payment") set forth in Section 7.6 of the
Regulation S Subscription Agreement between the Company and the Subscribers
("Subscription Agreement") for each day beyond sixty (60) days of the receipt of
a request for a Demand Registration until such registration is complete. If, on
the date (the "Conversion Eligibility Date") that Preferred Stock becomes
eligible for conversion into Common Stock or the Warrants are exercisable, the
Common Stock is not listed on the OTC Bulletin Board or other national stock
exchange or automated quotation system, then the Company shall pay to all
Holders of outstanding Preferred Stock that are eligible for immediate
conversion and to all Holders of unexercised Warrants a penalty equal to the
amount of the Conversion Default Payment for each day beyond the Conversion
Eligibility Date until such listing is complete.
18. Governing Law. This Registration Rights Agreement shall be
governed by and construed in accordance with the laws of the state of New York
applicable to agreements made in and wholly to be performed in that
jurisdiction, except for matters arising under the Act or the 1934 Act, which
matters shall be construed and interpreted in accordance with such laws. Any
action brought to enforce, or otherwise arising out of, this Agreement shall be
heard and determined only in either a federal or city court sitting in the State
of New York, New York County and Subscriber hereby waives any rights to raise a
defense of forum non-conveniens.
[INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned have executed this Registration
Rights Agreement as of the date first above written.
CYBER DIGITAL, INC..
By: ________________________________
X.X. Xxxxxxx
President
Address: 000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxx Xxxx, 00000
Telephone No. (000) 000-0000
Telecopy No. (000) 000-0000
INVESTOR(S)
___________________________________
Investor's Name
By:_________________________________
(Signature)
Address: ____________________________________
