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Babyuniverse, Inc.

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Title:

Babyuniverse, Inc.

Entities:

Babyuniverse, Inc.

Date:

2007

Size:

54KB total

Price:

$40

ID:

#3178098

► Corporate ► Rights ► Registration Rights Agreements

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BABYUNIVERSE, INC.

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT, dated as of October 12, 2007 (the ?Agreement?), among the investors listed on Schedule I hereto (the ?Former eToys Investors?), the investors listed on Schedule II hereto (the ?Wyndcrest Affiliated Investors?, and together with the Former eToys Investors, the ?Investors?) and BabyUniverse, Inc., a Florida corporation (the ?Company?).

R E C I T A L S

WHEREAS, the Former eToys Investors acquired, pursuant to the terms of that certain Agreement and Plan of Merger, dated as of March 13, 2007, by and among the Company, Baby Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of the Company, and eToys Direct, Inc., a Delaware corporation (?eToys?), as amended by that First Amendment to Agreement and Plan of Merger, dated as of September 12, 2007, and that Second Amendment to Agreement and Plan of Merger, dated as of September 20, 2007 (as so amended, the ?Merger Agreement?), an aggregate of 15,522,081 shares of common stock, par value $0.001 per share, of the Company (the ?Common Stock?);

WHEREAS, as of the date hereof, the Wyndcrest Affiliated Investors own beneficially and as of record an aggregate of 2,070,525 shares of Common Stock;

WHEREAS, the Company has agreed, as a condition precedent to eToys' obligations under the Merger Agreement, to grant the Investors certain registration rights; and

WHEREAS, the Company and the Investors desire to define the registration and certain other rights of the Investors on the terms and subject to the conditions hereinafter set forth.

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the parties hereby agree as follows:

SECTION 1. DEFINITIONS

As used in this Agreement, the following terms have the respective meanings set forth below:

Agreement: shall mean this Registration Rights Agreement among the Investors and the Company;

Commission: shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act;

Common Stock: shall have the meaning set forth in the Recitals hereto;

Controlling Former eToys Investors: shall mean D.E. Shaw Laminar Acquisition Holdings 3, L.L.C. and Michael J. Wagner.

Demanding Holders: shall have the meaning set forth in Section 2(b)(iii) hereof;

eToys: shall have the meaning set forth in the Recitals hereto;

eToys Holder: shall mean any holder of eToys Registrable Securities;

eToys Registrable Securities: shall mean the shares of Common Stock and any stock of the Company issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, such shares of Common Stock, in each case now or hereafter owned beneficially and of record by the Former eToys Investors;

Exchange Act: shall mean the Securities Exchange Act of 1934, as amended (or any successor act), and the rules and regulations promulgated thereunder;

Former eToys Investors: shall have the meaning set forth in the Preamble hereto;

Holder: shall mean any eToys Holder or any Wyndcrest Holder;

Indemnified Party: shall have the meaning set forth in Section 2(e) (iii) hereof;

Indemnifying Party: shall have the meaning set forth in Section 2(e) (iii) hereof;

Initiating eToys Holder: shall mean any Holder or Holders who in the aggregate are Holders of more than 50% of the then outstanding eToys Registrable Securities;

Initiating Holder: shall mean an Initiating eToys Holder or an Initiating Wyndcrest Holder;

Initiating Wyndcrest Holder: shall mean any Holder or Holders who in the aggregate are Holders of more than 50% of the then outstanding Wyndcrest Registrable Securities;

Investors: shall have the meaning set forth in the Preamble hereto;

Merger Agreement: shall have the meaning set forth in the Recitals hereto;

Other Stockholders: shall have the meaning set forth in Section 2(a)(i) hereof;

-2-

Participating Holder: shall have the meaning set forth in Section 2(d) hereof;

Person: shall mean an individual, partnership, joint-stock company, corporation, limited liability company, trust or unincorporated organization, and a government or agency or political subdivision thereof;

Register, Registered and Registration: shall mean, or have reference to, a registration effected by preparing and filing a registration statement in compliance with the Securities Act (and any post-effective amendments filed or required to be filed) and the declaration or ordering of effectiveness of such registration statement;

Registrable Securities: shall mean the eToys Registrable Securities and the Wyndcrest Registrable Securities;

Registration Expenses: shall mean all expenses incurred by the Company in compliance with Section 2(a), (b) and (c) hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, reasonable fees and expenses of one counsel for all the Holders, blue sky fees and expenses and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company, which shall be paid in any event by the Company);

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