REGISTRATION RIGHTS AGREEMENT by and between RECRUITER.COM GROUP, INC. and PARRUT, INC. Dated as of July 7, 2021 REGISTRATION RIGHTS AGREEMENT
EXHIBIT 10.2
by
and between
▇▇▇▇▇▇▇▇▇.▇▇▇
GROUP, INC.
and
PARRUT,
INC.
Dated
as of July 7, 2021
THIS REGISTRATION RIGHTS AGREEMENT (this
“Agreement”),
dated as of July 7, 2021, is by and between ▇▇▇▇▇▇▇▇▇.▇▇▇ Group,
Inc., a Delaware corporation (the “Company”) and Parrut, Inc., a
Delaware corporation (“Parrut”).
RECITALS
WHEREAS, pursuant
to the Asset Purchase Agreement and Plan of Reorganization, dated
as of the date hereof, by and between the Company and Parrut (as
such agreement may be amended from time to time, the
“Asset Purchase
Agreement”), Parrut agreed to sell and assign to the
Company, and the Company agreed to purchase and assume from Parrut,
certain assets and certain specified liabilities of the Business),
in exchange for the Base Purchase Price of $3,500,000, which amount
includes, among other things, (i) the Closing Stock Payment payable
in shares of Common Stock. In addition, Parrut shall have the
opportunity to earn the Earn-Out Consideration (as such term is
defined in the Asset Purchase Agreement), and such shares of Common
stock shall be deemed to be Registrible Securities.
WHEREAS, in connection with the
transactions contemplated by the Asset Purchase Agreement, the
Company and Parrut wish to define certain registration rights
granted to Parrut on the terms and conditions set out in this
Agreement; and
WHEREAS, capitalized terms used but not
otherwise defined herein shall have the meanings ascribed thereto n
Purchase Agreement;
NOW,
THEREFORE, in consideration of the recitals and the mutual
premises, covenants and agreements contained herein and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions. In addition to
capitalized terms defined elsewhere in this Agreement, the
following capitalized terms shall have the following meanings when
used in this Agreement:
“Affiliate” means as to any
specified Person, any other Person directly or indirectly
controlling or controlled by or under common control with such
specified Person. For purposes of this definition,
“control,” as
used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise. For
purposes of this definition, the terms “controlling,” “controlled by” and
“under common control
with” have correlative meanings.
“Agreement” as defined in the
Preamble.
“Board” means the Board of
Directors of the Company.
“Commission” means the U.S.
Securities and Exchange Commission and any successor agency
performing comparable functions.
“Common Stock” means the common
stock, par value $0.0001 per share, of the Company.
“Company” as defined in the
Preamble.
“Demand Registrations” as defined
in Section 2.3(a).
“Demand Registration Statements” as
defined in Section 2.3(a).
“Exchange Act” means the Securities
Exchange Act of 1934, as amended, or any successor federal statute,
and the rules and regulations of the Commission thereunder, as the
same shall be in effect from time to time.
“Governmental Authority” means any
regional, federal, state or local legislative, executive or
judicial body or agency, any court of competent jurisdiction, any
department, political subdivision or other governmental authority
or instrumentality, or any arbitral authority, in each case,
whether domestic or foreign.
“Indemnified Party” as defined in
Section 7.3. “Indemnifying
Party” as defined in Section 7.3.
“Long-Form Demand Registration” as
defined in Section 2.1(b).
“Long-Form Demand Registration
Statement” as defined in Section 2.1(a).
“Parrut” as
defined in the Preamble.
“Person” means an individual, a
corporation, a partnership, a joint venture, a limited liability
company or limited liability partnership, an association, a trust,
estate or other fiduciary or any other legal entity, and any
Governmental Authority.
“Piggyback Registration” as defined
in Section 3.1. “Piggyback
Registration Statement” as defined in Section
3.1.
“Public Offering” means any
offering by the Company of its equity securities to the public
pursuant to an effective registration statement under the
Securities Act or any comparable statement under any comparable
federal statute then in effect (other than any registration
statement on Form S-8 or Form S-4 or any successor forms
thereto).
“Registrable Securities” means all
shares of Common Stock acquired or to be acquired by Parrut
pursuant to the Asset Purchase Agreement (and under the Promissory
Note, and any securities into which such shares of Common Stock may
be converted or exchanged pursuant to any merger, consolidation,
sale of all or any part of its assets, corporate conversion or
other extraordinary transaction of the Company and any equity
securities of the Company then outstanding that were issued or
issuable as a dividend, stock split or other distribution with
respect to or in replacement of such shares of Common Stock. As to
any Registrable Securities, such securities will cease to be
Registrable Securities when: (i) a registration statement covering
such Registrable Securities has been declared effective and such
Registrable Securities have been disposed of pursuant to such
effective registration statement; (ii) such Registrable Securities
shall have been sold
pursuant to Rule 144 (or any similar provision then in effect)
under the Securities Act; (iii) such Registrable Securities may be
sold pursuant to Rule 144 (or any similar provision then in effect)
without limitation thereunder on volume or manner of sale and
without the requirement for the Company to be in compliance with
the current public information requirement under Rule 144(c)(1) (or
any similar provision then in effect) for a period of ninety (90)
days, as determined by the counsel to the Company pursuant to a
written opinion letter to such effect, addressed and reasonably
acceptable to the transfer Agent and Parrut; or (iv) such
Registrable Securities cease to be outstanding.
“Registration Expenses” as defined
in Section 6.1.
“Rule 144” means Rule 144
promulgated by the Commission pursuant to the Securities Act, as
such rule may be amended from time to time, or any similar rule or
regulation hereafter adopted by the Commission as a replacement
thereto.
“Securities Act” means the
Securities Act of 1933, as amended, or any successor federal
statute, and the rules and regulations of the Commission
thereunder, as the same shall be in effect from time to
time.
“Shelf Demand Registration” as
defined in Section 2.3(a). “Shelf Registration Statement” as
defined in Section 2.3(a). “Short-Form Demand Registration” as
defined in Section 2.2.
“Short-Form Demand Registration
Statement” as defined in Section 2.2.
“Six Month
Anniversary” means the six-month anniversary of the
Closing.
“Underwritten Offering” means an
offering registered under the Securities Act in which securities of
the Company are sold to one or more underwriters on a
firm-commitment basis for reoffering to the public, and the plan of
distribution contemplates a customary “road show”
(including an “electronic road show”) or other
substantial marketing effort by the Company and the
underwriters.
2.
Demand Registration
Rights.
2.1
Long-Form
Registration.
(a)
At any time after
the Six Month Anniversary and within the five
(5)
year period immediately following the Six Month Anniversary, Parrut
shall be entitled to request registration under the Securities Act
of the resale of all or part of Parrut’s Registrable
Securities (a “Long-Form
Demand Registration Statement”); provided, however, that with respect to any
request under this Section 2.1(a): (i) Parrut may not request or
demand more than one (1) Long Form Demand Registration Statement),
(ii) the Company shall not otherwise be eligible at the time of the
request to file a registration statement on Form S-3 or any similar
short form registration statement for the resale of Registrable
Securities, and (iii) such request shall cover at least 25% of the
Registrable Securities.
2.2
Short-Form
Registration.
(a) In addition to the
Long-Form Demand Registration right provided pursuant to Section
2.1 above, at any time after the Six Month Anniversary and within
the five (5) year period immediately following the Six Month
Anniversary, when the Company is eligible to use Form ▇-▇, ▇▇▇▇▇▇
shall be entitled to request, and the Company shall use reasonable
best efforts to cause, registration under the Securities Act of the
resale of all or part of their Registrable Securities on Form S-3
or any similar short-form registration statement (a
“Short-Form Demand
Registration Statement”). A registration requested
pursuant to this Section 2.2 is referred to herein as a
“Short-Form Demand
Registration.”
(b) Parrut shall be
limited to a total of an aggregate of three (3) Demand
Registrations (counting for these purposes only registrations which
have been declared or ordered effective), which may include a
maximum of one (1) Long-Form Demand Registrations.
2.3
Shelf
Registration.
(a) At any time after
the Company is eligible to use Form S-3 or similar short-form
registration statement and within the three (3) year period
immediately following the Six Month Anniversary, Parrut shall be
entitled to request that the Company file a shelf registration
statement on Form S-3 (provided that in the event the Company is a
well-known seasoned issuer as defined by Securities Act Rule 405 at
the time of the filing of such registration, such registration will
be an automatic shelf registration statement if requested by
Parrut), to register the resale of all or part of Parrut’s
Registrable Securities (including the prospectus, amendments and
supplements to the shelf registration statement or prospectus,
including pre- and post-effective amendments, all exhibits thereto
and all material incorporated by reference or deemed incorporated
by reference, if any, in such shelf registration statement) (the
“Shelf Registration
Statement” and, together with the Long-Form Demand
Registration Statement and the Short-Form Demand Registration
Statement, the “Demand
Registration Statements”). A registration requested
pursuant to this Section 2.3(a), including a shelf takedown from a
Shelf Registration Statement, is referred to herein as a
“Shelf Demand
Registration” (and, together with the Long-Form Demand
Registration and the Short-Form Demand Registration, the
“Demand
Registrations”).
(b) Upon receipt of any
written request pursuant to this Section 2.3, the Company shall use
its reasonable best efforts to file a Shelf Registration Statement
as soon as practicable thereafter and to cause the Shelf
Registration Statement to become or be declared effective by the
Commission as soon as practicable after such filing, and shall use
its reasonable best efforts to keep the Shelf Registration
Statement effective, from the date such Shelf Registration
Statement becomes effective until the earlier to occur (i) the
first date as of which all of the shares of Registrable Securities
included in the Shelf Registration Statement have been sold or (ii)
a period of three (3) years.
2.4 Payment of Expenses for Demand
Registrations. The Company will pay all Registration
Expenses (as defined in Section 6.1 below) for the Demand
Registrations permitted under Section 2.1, Section 2.2 and Section
2.3. Other than as provided by Section 2.4 and Section
6.1, a registration
will not count as a Demand Registration until (i) the registration
statement has become effective, (ii) Parrut is able to register and
sell at least a majority of the Registrable Securities requested to
be included in such registration statement and (iii) with respect
to an underwritten shelf takedown, the prospectus supplement for
such offer has been filed with the Commission; provided, however that if Parrut fails
to reimburse the Company for reasonable and documented Registration
Expenses with respect to a withdrawn Demand Registration in
accordance with Section 6.1, Parrut shall forfeit such withdrawn
Demand Registration unless (x) such withdrawal occurs following the
issuance by the Company of a suspension notice or notice of a
blackout period pursuant to Section 2.5 or Section 4.2, or (y) such
withdrawal occurs following Parrut learning of a material adverse
change in the condition, business, or prospects of the Company as
contemplated in Section 6.1.
2.5
Restrictions.
(a) The Company will
not be obligated to effect any Demand Registration within one
hundred eighty (180) days after the effective date of a previous
Piggyback Registration Statement under which Parrut requesting the
Demand Registration had piggyback rights pursuant to Section 3.1
below wherein Parrut was permitted to register and sold at least
50% of the Registrable Securities included in such Piggyback
Registration Statement.
(b) The Company may
postpone the filing of a Demand Registration Statement for a
reasonable “blackout period” not in excess of ninety
(90) consecutive calendar days or more than one hundred twenty
(120) total calendar days in each case during any twelve (12)-month
period (and the time periods with respect to filing or
effectiveness thereof shall be tolled correspondingly), if (i) the
Board determines that such registration or offering could
materially interfere with a bona fide business, financing or
business combination transaction of the Company or is reasonably
likely to require premature disclosure of material non-public
information, which premature disclosure could materially and
adversely affect the Company,
(ii)
such registration would require the Company to recast its
historical financial statements or prepare pro forma financial
statements, acquired business financial statements or other
information, with which requirement the Company is reasonably
unable to comply, or (iii) render the Company unable to comply with
requirements under the Securities Act or the Exchange
Act.
(c) Such blackout
period will end upon the earlier to occur of, (i) in the case of a
bona fide business, financing or business combination transaction,
or rendering the Company unable to comply with requirements under
the Securities Act or the Exchange Act, a date not later than
ninety (90) days from the date such deferral commenced, (ii) in the
case of disclosure of non-public information, the earlier to occur
of (x) the filing by the Company of its next succeeding Form 10-K
or Form 10-Q, or (y) the date upon which such information is
otherwise disclosed, (iii) in the case of the recasting of
historical financial statements, the date upon which such financial
statements are filed by the Company with the Commission; provided,
however, the Company shall use its reasonable best efforts to file
such statements as promptly as practicable, and (iv) in the case of
preparation of pro forma or acquired business financial statements,
a date not later than seventy-five (75) days after the date of such
acquisition. In no event shall there be more than one (1) blackout
period during any rolling period of three hundred sixty-five (365)
days pursuant to this Section 2.5 or Section 4.2.
3.
Piggyback
Registration.
3.1 Right to Piggyback. For a
period of three (3) years following the Six Month Anniversary,
whenever the Company proposes to register the issuance or sale of
any of its Common Stock under the Securities Act for its own
account or otherwise, and the registration form to be used may be
used for the registration of the resale of Registrable Securities
(each, a “Piggyback
Registration”) (except for the registrations on Form
S-8 or Form S-4 or any successor form thereto) (a
“Piggyback Registration
Statement”), the Company will give written notice, at
least fifteen (15) days prior to the proposed filing of such
registration statement, to Parrut of its intention to effect such a
registration and will use reasonable best efforts to include in
such registration all Registrable Securities with respect to which
the Company has received written requests for inclusion, which
request shall specify the number of such Registrable Securities
desired to be registered and be delivered within fifteen (15) days
after the delivery of the Company’s notice. The Company may
postpone or withdraw the filing or the effectiveness of a Piggyback
Registration Statement at any time in its sole
discretion.
3.2 Priority on Primary
Registrations. If a Piggyback Registration is an
underwritten primary offering on behalf of the Company and the
managing underwriters advise the Company in writing that in their
opinion the number of Registrable Securities requested to be
included in the registration creates a substantial risk that the
price per share of the primary securities will be reduced or that
the amount of the primary securities intended to be included on
behalf of the Company will be reduced, then the managing
underwriter and the Company may exclude securities (including
Registrable Securities) from the registration and the underwriting,
and the number of securities that may be included in such
registration and underwriting shall include: (i) first, any
securities that the Company proposes to sell, (ii) second, the
amount of Registerable Securities requested by Parrut and (iii)
third, the amount of securities requested by any other holder
pursuant to any other registration rights obligations of the
Company.
3.3 Priority on Secondary
Registrations. If a Piggyback Registration is an
underwritten secondary offering on behalf of holders of the
Company’s securities and the managing underwriters advise the
Company in writing that in their opinion the number of securities
requested to be included in the registration creates a substantial
risk that the price per share of securities offered thereby will be
reduced, the Company will include in such registration the
Registrable Securities requested to be included therein by Parrut,
and any other securities, if any, requested to be included in such
registration by other holders having registration rights on a
pro rata basis based on the
total number of Registrable Securities held by Parrut hereunder and
the total number of other securities held by other holders having
registration rights.
3.4 Selection of Underwriters. In
connection with any underwritten Piggyback Registration initiated
by the Company, the Company shall have the right to (i) determine
the plan of distribution and (ii) select the investment banker or
bankers and managers to administer the offering, including the lead
managing underwriter.
3.5 Payment of Expenses for Piggyback
Registrations. The Company will pay all Registration
Expenses (as defined in Section 6.1 below) for the Piggyback
Registrations under this Section 3.
4.
Additional
Agreements.
4.1 Parrut’s Agreements. To
the extent not inconsistent with applicable law, Parrut agrees that
upon request of the Company or the underwriters managing any
Underwritten Offering of the Company’s securities, it will
(i) not offer, sell, contract to sell, loan, grant any option to
purchase, make any short sale or otherwise dispose of, hedge or
transfer any of the economic interest in (or offer, agree or commit
to do any of the foregoing) any shares of Common Stock, or any
options or warrants to purchase any shares of Common Stock, or any
securities convertible into, exchangeable for or that represent the
right to receive shares of Common Stock, whether now owned or
hereinafter acquired by such holder, owned directly (including
holding as a custodian) or with respect to which such holder has
beneficial ownership within the rules and regulations of the
Commission (other than those included by such holder in the
offering in question, if any) without the prior written consent of
the Company or such underwriters, as the case may be, for up to
fourteen (14) days prior to, and during the period of up to ninety
(90) days following, the effective date of the registration
statement for such Underwritten Offering, and (ii) enter into and
be bound by such form of agreement with respect to the foregoing as
the Company or such managing underwriter may reasonably request;
provided that each executive officer and director of the Company
also agrees to substantially similar restrictions.
4.2
Suspension of
Resales.
(a) The Company shall
be entitled to suspend the use of the prospectus forming any part
of a Demand Registration Statement or Piggyback Registration
Statement for a reasonable “blackout period” not in
excess of ninety (90) consecutive calendar days or more than one
hundred twenty (120) total calendar days in each case during any
twelve (12)-month period (provided the time periods with respect to
the effectiveness of such registration statement shall be tolled
correspondingly) if (i) the Board determines that such registration
or offering could materially interfere with a bona fide business,
financing or business combination transaction of the Company or is
reasonably likely to require premature disclosure of material
non-public information, which premature disclosure could materially
and adversely affect the Company,
(ii) an
offering or sale pursuant to such prospectus would require the
Company to recast its historical financial statements or prepare
pro forma financial statements, acquired business financial
statements or other information, with which requirement the Company
is reasonably unable to comply, or (iii) render the Company unable
to comply with requirements under the Securities Act or the
Exchange Act.
(b) The blackout period
will end upon the earlier to occur of (i) in the case of a bona
fide business, financing or business combination transaction, or
rendering the Company unable to comply with requirements under the
Securities Act or the Exchange Act, a date not later than ninety
(90) days from the date such deferral commenced, (ii) in the case
of disclosure of non-public information, the earlier to occur of
(x) the filing by the Company of its next succeeding Form 10-K or
Form 10-Q, or (y) the date upon which such information is otherwise
disclosed, (iii) in the case of the recasting of historical
financial statements, the date upon which such financial statements
are filed by the Company with the Commission, provided however, the
Company shall use its reasonable best efforts to file such
statements as promptly as practicable and (iv) in the case of
preparation of pro forma or acquired business financial statements,
a date not later than seventy-five (75) days after the date of such
acquisition. In no event shall there
be more than one (1) blackout periods during any rolling period of
three hundred sixty-five (365) days pursuant to this Section 4.2 or
Section 2.5.
(c) Upon its receipt of
a written certification from the Company notifying Parrut of such
suspension, Parrut will immediately discontinue the sale of any
Registrable Securities pursuant to such registration statement or
otherwise until Parrut has received copies of the supplemented or
amended prospectus or until such Parrut is advised in writing that
the use of the prospectus forming a part of such registration
statement may be resumed and has received copies of any additional
or supplemental filings that are incorporated by reference in such
prospectus.
5.
Registration
Procedures.
5.1 Company Obligations. Whenever
the Company is required to file a registration statement under this
Agreement or to use its reasonable best efforts to effect the
registration of Registrable Securities, or whenever Parrut has
requested that the resale of any Registrable Securities be
registered in accordance with this Agreement, the Company shall, as
expeditiously as reasonably practicable:
(a) prepare and, as
soon as practicable after requests for registration may be given to
the Company under this Agreement, file with the Commission a
registration statement with respect to the resale of such
Registrable Securities and use its reasonable best efforts to cause
such registration statement to become effective (provided that
before filing a registration statement or prospectus, or any
amendments or supplements thereto, the Company will furnish copies
of all such documents proposed to be filed to one counsel
designated by Parrut covered by such registration statement and to
the extent practicable under the circumstances, provide such
counsel an opportunity to comment on any information pertaining to
the holders of Registrable Securities covered by such registration
statement contained therein; and the Company shall consider in good
faith any corrections reasonably requested by such counsel with
respect to such information);
(b) except as otherwise
provided in this Agreement (including Section 2.3(b) hereof),
prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus(es)
used in connection therewith as may be necessary to keep such
registration statement effective for a period of not less than the
earlier of (i) with respect to a Long Form Demand Registration
Statement, one hundred eighty (180) days, and with respect to a
Short Form Demand Registration Statement, two (2) years, and (ii)
the date that all of the securities covered by the registration
statement have been sold, and comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by such registration statement during such period in
accordance with the intended methods of disposition by the sellers
thereof set forth in such registration statement;
(c) in connection with
any filing of any registration statement or prospectus or amendment
or supplement thereto, cause such document (i) to comply in all
material respects with the requirements of the Securities Act and
the rules and regulations of the Commission thereunder and (ii) to
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 not misleading;
(d) furnish to Parrut
and underwriter of Registrable Securities, without charge, such
number of copies of such registration statement, each amendment and
supplement thereto, the prospectus(es) included in such
registration statement (including each preliminary prospectus and
summary prospectus) and such other documents as Parrut or
underwriter may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by
Parrut;
(e) use its
commercially reasonable efforts to register or qualify such
Registrable Securities under such securities or blue sky laws of
such jurisdictions as Parrut or underwriter reasonably request,
keep each such registration or qualification effective during the
period the associated registration statement is required to be kept
effective, and do any and all other acts and things which may be
reasonably necessary or advisable to enable Parrut or underwriter
to consummate the disposition in such jurisdictions of such
Registrable Securities (provided that the Company will not be
required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify
but for this subparagraph, (ii) consent to general service of
process in any such jurisdiction, or (iii) subject itself or any of
its Affiliates to taxation in any such jurisdiction in which it is
not subject to taxation);
(f) promptly notify
Parrut and underwriter of such Registrable Securities and confirm
in writing, when a registration statement has become effective and
when any post-effective amendments and supplements thereto become
effective;
(g) promptly notify
Parrut and underwriter of such Registrable Securities, at any time
when a prospectus relating thereto is required to be delivered
under the Securities 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 any fact
necessary to make the statements therein not misleading, and,
subject to Section 4.2, prepare and deliver a supplement or
amendment to such prospectus so that, as thereafter delivered to
the purchasers of such Registrable Securities, such prospectus will
not contain any untrue statement of a material fact or omit to
state any fact necessary to make the statements therein not
misleading;
(h) use commercially
reasonable efforts to cause all such Registrable Securities to be
listed on each securities exchange on which the same or similar
securities issued by the Company are then listed or if no such
securities are then listed, on a national securities exchange
selected by the Company;
(i) provide a transfer
agent, registrar and CUSIP number for all such Registrable
Securities not later than the effective date of such registration
statement;
(j) enter into such
customary agreements (including underwriting agreements in
customary form) and take all such other customary actions as the
holders of Parrut being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the
disposition of such Registrable Securities;
(k) use commercially
reasonable efforts to cooperate with Parrut and the underwriter or
managing underwriter, if any, to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to
be sold and not bearing any restrictive legends; and enable such
Registrable Securities to be in such denominations (consistent with
the provisions of the governing documents thereof) and registered
in such names as Parrut or the underwriter or managing underwriter,
if any, may reasonably request at least three (3) Business Days
prior to any sale of Registrable Securities;
(l) subject to
confidentiality agreements in form and substance acceptable to the
Company, make available for inspection, at such place and in such
manner as determined by the Company in its sole discretion, by
Parrut, any underwriter participating in any disposition pursuant
to such registration statement, and any attorney, accountant or
other agent retained by Parrut or underwriter, financial and other
records, pertinent corporate documents and properties of the
Company reasonably requested by Parrut, underwriter, attorney,
accountant or agent in connection with such registration statement,
and cause the Company’s officers, directors, employees and
independent accountants to supply all information reasonably
requested by Parrut, underwriter, attorney, accountant or agent in
connection with such registration statement; provided, however, that any records,
information or documents that are furnished by the Company and that
are non-public shall be used only in connection with such
registration;
(m) advise Parrut and
underwriter of such Registrable Securities, promptly after it shall
receive notice or obtain knowledge thereof, of the issuance of any
stop order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any
proceeding for such purpose and promptly use its reasonable best
efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued;
(n) make available to
its security holders, as soon as reasonably practicable, an
earnings statement (which need not be audited) covering at least
twelve (12) months which shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder;
(o) cooperate and
assist in any filing required to be made with the Financial
Industry Regulatory Authority (FINRA);
(p) obtain for delivery
to any underwriter of Registrable Securities an opinion or opinions
of counsel for the Company in customary form;
(q) at the request of
Parrut in connection with an Underwritten Offering, furnish on the
date or dates provided for in the underwriting agreement a letter
or letters from the independent certified public accountants of the
Company addressed to the underwriters and Parrut, covering such
matters as such accountants, underwriters and Parrut may reasonably
agree upon, in which letter(s) such accountants shall state,
without limiting the generality of the foregoing, that they are an
independent registered public accounting firm within the meaning of
the Securities Act and that in their opinion the financial
statements and other financial data of the Company included in the
registration statement, the prospectus(es), or any amendment or
supplement thereto, comply in all material respects with the
applicable accounting requirements of the Securities Act;
and
(r) with respect to
underwritten Demand Registrations, make senior executives of the
Company reasonably available to assist the underwriters with
respect to, and participate in, the so-called “road
show” in connection with the marketing efforts for, and the
distribution and sale of, Registrable Securities pursuant to a
registration statement; provided such road shows are reasonably
requested by the managing underwriter and are customary for
underwritten offerings that are comparable to such underwritten
Demand Registration in size and the type of securities
offered.
6.
Registration
Expenses.
6.1 The Company’s Expenses.
Other than as provided by Section 2.4, the Company will pay all
reasonable expenses incident to the Company’s performance of
or compliance with this Agreement, including: all registration and
filing fees; fees and expenses of compliance with securities or
blue sky laws; fees and expenses incurred in connection with FINRA
and rating agencies; costs and expenses related to analyst and
investor presentations and “roadshows”; printing
expenses; messenger and delivery expenses; and fees and
disbursements of counsel for the Company; fees and disbursements of
the Company’s registered public accounting firm (including
with respect to “comfort letters”); all reasonable fees
and disbursements of one counsel for Parrut in connection with the
registration; reasonable fees and disbursements of all other
Persons retained by the Company; and any other fees and
disbursements customarily paid by issuers of securities (all such
expenses being herein called “Registration Expenses”); provided,
however, that, as between the Company and Parrut, underwriting
discounts, commissions, and underwriter fees and disbursements (in
connection with an underwritten Demand Registration) relating to
the Registrable Securities will be borne by Parrut. In addition,
the Company will pay its internal expenses (including, but not
limited to, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual
audit or quarterly review, the expense of any liability insurance
obtained by the Company and the expenses and fees for listing the
securities to be registered on each securities exchange.
Notwithstanding the foregoing, if a request for Demand Registration
for which the Company is obligated to pay all Registration Expenses
pursuant to Section 2.4 and this Section 6.1 is subsequently
withdrawn at the request of Parrut, Parrut shall forfeit such
Demand Registration unless Parrut pays (or reimburses the Company)
for all reasonable and documented Registration Expenses with
respect to such withdrawn Demand Registration; provided that if, at
the time of such withdrawal, Parrut shall have either (i) learned
of a material adverse change in the condition, business, or
prospects of the Company from that known to Parrut at the time of
its request and has withdrawn the request with reasonable
promptness after learning of such information or (ii) withdrawn
following the issuance by the Company of a suspension notice or
notice of a blackout period pursuant to Section 2.5 or Section 4.2,
then Parrut shall not be required to pay any of such expenses and
shall not forfeit their right to such Demand
Registration.
7.
Indemnification.
7.1 By the Company. To the extent
permitted by applicable Law, the Company shall indemnify, to the
fullest extent permitted by law, Parrut and, as applicable, each of
its Affiliates, trustees, shareholders, members, directors,
managers, partners, officers and employees, and each Person who
controls such holder (within the meaning of the Securities Act),
against all losses, claims, damages, liabilities and expenses
(including, but not limited to, reasonable attorneys’
fees and expenses) or actions or proceedings in respect thereof
(whether or not such indemnified Person is party thereto) arising
out of or based upon (a) any untrue or alleged untrue statement of
material fact contained in any registration statement, prospectus
or preliminary prospectus, or any amendment thereof or supplement
thereto (including, in each case, all documents incorporated
therein by reference), (b) any omission or alleged omission of a
material fact required to be stated therein or necessary to make
the statements therein not misleading or (c) any violation or
alleged violation by the Company or any of its Subsidiaries of any
federal, state, foreign or common law rule or regulation applicable
to the Company or any of its Subsidiaries and relating to action or
inaction in connection with any such registration, disclosure
document or related document or report, except insofar as the same
are caused by or contained in any information furnished in writing
to the Company by Parrut expressly for use therein or by
Parrut’s failure to deliver a copy of the prospectus or any
amendments or supplements thereto after the Company has furnished
Parrut with a sufficient number of copies of the same. In
connection with an Underwritten Offering, the Company will
indemnify such underwriters, their officers and directors and each
Person who controls such underwriters (within the meaning of the
Securities Act) to the same extent as provided above with respect
to the indemnification of Parrut. The payments required by this
Section 7.1 will be made promptly during the course of the
investigation or defense, as and when bills are received or
expenses incurred.
7.2 By Parrut. In connection with
any registration statement in which Parrut is participating, Parrut
will furnish to the Company in writing such information relating to
such holder as requested by the Company and is reasonably necessary
for use in connection with any such registration statement,
prospectus or prospectus supplement and, to the fullest extent
permitted by law, will indemnify the Company, its Subsidiaries,
and, as applicable, each of their directors, employees and officers
and each Person who controls the Company (within the meaning of the
Securities Act) against any losses, claims, damages, liabilities
and expenses (including, but not limited to, reasonable
attorneys’ fees and expenses) resulting from any untrue or
alleged untrue statement of material fact contained in the
registration statement, prospectus or preliminary prospectus, or
any amendment thereof or supplement thereto (including, in each
case, all documents incorporated therein by reference), or any
omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not
misleading, but only to the extent that such untrue statement or
omission is contained in or omitted from any information furnished
in writing by such holder for the acknowledged purpose of inclusion
in such registration statement, prospectus or preliminary
prospectus; provided,
however, the obligation of Parrut to indemnify shall be
several, not joint and several, and the liability of Parrut will be
in proportion to and limited to the net amount (after underwriting
fees, commissions and discounts) that it actually received from the
sale of Registrable Securities pursuant to such registration
statement, unless such loss, claim, damage, liability or expense
resulted from Parrut’s fraudulent conduct or willful
misconduct.
7.3 Procedure. Each party entitled
to indemnification under this Section 7 (the “Indemnified Party”) shall give
written notice to the party required to provide indemnification
(the “Indemnifying
Party”) promptly after such Indemnified Party has
received written notice of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the
defense of any such claim or any litigation resulting therefrom,
provided that the counsel
for the Indemnifying Party who is to conduct the defense of such
claim or litigation is reasonably satisfactory to the Indemnified
Party (whose approval shall not be unreasonably withheld or
delayed). The
Indemnified Party may participate in such defense at such
Indemnified Party’s expense; provided, however, that the
Indemnifying Party shall bear the expense of such defense of the
Indemnified Party if (i) the Indemnifying Party has agreed in
writing to pay such expenses, (ii) the Indemnifying Party shall
have failed to assume the defense of such claim or to employ
counsel reasonably satisfactory to the Indemnified Party, or (iii)
in the reasonable judgment of the Indemnified Party, based upon the
written advice of such Indemnified Party’s counsel,
representation of both parties by the same counsel would be
inappropriate due to actual or potential conflicts of interest;
provided, however, that in
no event shall the Indemnifying Party be liable for the fees and
expenses of more than one counsel (excluding one local counsel per
jurisdiction as necessary) for all Indemnified Parties in
connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same event,
allegations or circumstances. The Indemnified Party shall not make
any settlement without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably
withheld or delayed. The failure of any Indemnified Party to give
notice as provided herein shall not relieve the Indemnifying Party
of its obligations under this Section 7 except and only to the
extent that such failure to give notice shall materially prejudice
the Indemnifying Party in the defense of any such claim or any such
litigation. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the prior written consent of each
Indemnified Party, consent to entry of any judgment or enter into
any settlement (x) that does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified
Party of a release from all liability in respect to such claim or
litigation in form and substance reasonably satisfactory to such
Indemnified Party or (y) that includes an admission of fault,
culpability or a failure to act, by or on behalf of any Indemnified
Party, or requires forms of relief other than the payment of
monetary damages by the Indemnifying Party.
7.4 Survival. The indemnification
provided for under this Agreement will remain in full force and
effect regardless of any investigation made by or on behalf of the
Indemnified Party or any officer, director or controlling Person of
such Indemnified Party and will survive the transfer of
securities.
8. Compliance With Rule 144 And Rule
144a. With a view to making available to any holder of
Registrable Securities the benefits of Rule 144 and Rule 144A
promulgated under the Securities Act and other rules and
regulations of the Commission that may at any time permit any such
holder of Registrable Securities to sell securities of the Company
without registration, until such time as when no Registrable
Securities remain outstanding, the Company covenants that it will
(i) file in a timely manner all reports and other documents
required, if any, to be filed by it under the Securities Act and
the Exchange Act and the rules and regulations adopted thereunder
and (ii) make available information necessary to comply with Rule
144 and Rule 144A, if available with respect to resales of the
Registrable Securities under the Securities Act, at all times, all
to the extent required from time to time to enable any holder of
Registrable Securities to sell Registrable Securities without
registration under the Securities Act within the limitation of the
exemptions provided by (x) Rule 144 and Rule 144A promulgated under
the Securities Act (if available with respect to resales of the
Registrable Securities), as such rules may be amended from time to
time or (y) any other rules or regulations now existing or
hereafter adopted by the Commission. Upon the written request of
any holder of Registrable Securities, the Company will deliver to
such holder a written statement as to the Company’s
compliance with such requirements.
9. Participation In Underwritten
Registrations. No Person may participate in any registration
hereunder which is underwritten unless such Person (i) agrees to
sell its securities on the basis provided in any underwriting
arrangements approved by such Person or Persons entitled hereunder
to approve such arrangements and (ii) completes and executes all
questionnaires, powers of attorney, custody agreements, lock-up
agreements, indemnities, underwriting agreements and other
documents reasonably required under the terms of such underwriting
arrangements.
10.
Miscellaneous.
10.1 Amendments
and Waivers. Any amendment, modification, supplement or
restatement of this Agreement must be effected by written agreement
of the Company and Parrut.
10.2 Descriptive
Headings. The descriptive headings of this Agreement are
inserted for convenience of reference only and do not constitute a
part of and shall not be utilized in interpreting this
Agreement.
10.3 Notices.
Any notice or communication by the Company and Parrut is duly given
if in writing and delivered in person or by first class mail
(registered or certified, return receipt requested) or
electronically:
If to
the Company:
▇▇▇▇▇▇▇▇▇.▇▇▇
Group, Inc. ▇▇▇ ▇▇▇▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇
Attention: Chief
Executive Officer If to the Parrut:
Parrut
Inc.
▇▇▇
▇▇▇▇ ▇▇▇ ▇ ▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Phone:
Email:
The
Company and Parrut, by notice to the other parties hereto, may
designate additional or different addresses for subsequent notices
or communications. All notices and communications will be deemed to
have been duly given: at the time delivered by hand, if personally
delivered; five (5) Business Days after being deposited in the
mail, postage prepaid, if mailed; when receipt acknowledged, if
transmitted by facsimile; and the next Business Day after timely
delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery. If a notice or communication is
mailed, transmitted or sent in the manner provided above within the
time prescribed, it is duly given, whether or not the addressee
receives it.
10.4
Governing Law; Waiver of Jury
Trial.
(a) This Agreement
shall be governed by, and construed in accordance with, the laws of
the State of New York, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof.
Each party irrevocably submits to the exclusive jurisdiction of any
federal court located in the State of New Jersey or any New Jersey
state court, for the purposes of any action arising out of this
Agreement. Each party agrees to commence any such action either in
any federal court located in the State of New Jersey or any New
Jersey state court. Each party further agrees that service of any
process, summons, notice or document by the U.S. registered
mail to such party’s respective address set forth in Section
10.4 shall be effective service of process for any Action in New
Jersey with respect to any matters to which it has submitted to
jurisdiction in this Section 10.4(a). Each party irrevocably and
unconditionally waives any objection to the laying of venue of any
action arising out of this Agreement in any federal court located
in the State of New Jersey or any New Jersey state court, and
hereby and thereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such
action brought in any such court has been brought in an
inconvenient forum.
(b) EACH PARTY HERETO
WAIVES ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY. Each party hereto
(a) certifies that no representative or attorney of any other party
has represented, expressly or otherwise, that such party would not,
in the event of any action, seek to enforce the foregoing waiver
and (b) acknowledges that it and the other party have been induced
to enter into this Agreement, by, among other things, the mutual
waiver and certifications in this Section 10.4(b).
10.5 Remedies.
Each of the parties hereto acknowledges and agrees that in the
event of any breach of this Agreement by any of them, the
non-breaching party would be irreparably harmed and could not be
made whole by monetary damages. Each party accordingly agrees to
waive the defense in any action for specific performance that a
remedy at law would be adequate and that the parties, in addition
to any other remedy to which they may be entitled at law or in
equity, shall be entitled to compel specific performance of this
Agreement.
10.6 Further
Assurances. Each of the parties hereto will, without
additional consideration, execute and deliver such further
instruments and take such other action as may be reasonably
requested by any other party hereto in order to carry out the
purposes and intent of this Agreement.
10.7 No
Presumption Against Drafter. Each of the parties hereto has
jointly participated in the negotiation and drafting of this
Agreement. In the event there arises any ambiguity or question or
intent or interpretation with respect to this Agreement, this
Agreement shall be construed as if drafted jointly by all of the
parties hereto and no presumptions or burdens of proof shall arise
favoring any party by virtue of the authorship of any of the
provisions of this Agreement.
10.8 Severability.
If any provision of this Agreement (or any portion thereof) or the
application of any such provision (or any portion thereof) to any
Person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a Governmental Authority,
such invalidity,
illegality or unenforceability shall not affect any other provision
hereof (or the remaining portion thereof) or the application of
such provision to any other persons or circumstances. Upon such
determination that any provision of this Agreement (or any portion
thereof) or the application of any such provision (or any portion
thereof) to any Person or circumstance is invalid, illegal or
unenforceable, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the
parties hereto as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to
the extent possible.
10.9 Entire
Agreement. This Agreement, together with the other
agreements referred to herein, constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede
and shall supersede all prior agreements and understandings
(whether written or oral) between the parties, or any of them, with
respect to the subject matter hereof.
10.10 Execution
in Counterparts. This Agreement may be executed by any one
or more of the parties hereto in any number of counterparts, each
of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
Delivery of an executed counterpart of a signature page of this
Agreement by facsimile or other electronic image scan shall be
effective as delivery of a manually executed counterpart of this
Agreement.
10.11 Affiliate.
The Company acknowledges and agrees that Parrut is not, immediately
following the Closing, an “affiliate” (as defined in
Rule 144) of the Company.
10.12 Preservation
of Rights. The Company shall not (a) grant any registration
rights to third parties which are more favorable than or
inconsistent with the rights granted under this Agreement, or (b)
enter into any agreement, take any action, or permit any change to
occur, with respect to its securities that violates or subordinates
the rights expressly granted to the holders of Registrable
Securities in this Agreement.
10.13 Transfer
or Assignment of Registration Rights. The rights to cause
the Company to register Registrable Securities under this Agreement
may be transferred or assigned by Parrut to one or more transferees
or assignees of Registrable Securities; provided, that (a) the
Company is given written notice prior to any said transfer or
assignment, stating the name and address of each such transferee or
assignee and identifying the securities with respect to which such
registration rights are being transferred or assigned and (b) each
such transferee or assignee assumes in writing responsibility for
its portion of the obligations of such transferring holder under
this Agreement (each, a “Permitted Transferee”). For the
avoidance of doubt, any transferee that receives Registrable
Securities from Parrut in connection with any dissolution and
liquidation of Parrut shall be a Permitted Transferee.
10.14 No
Third Party Beneficiaries. Nothing in this Agreement is
intended or shall be construed to give any Person, other than the
parties hereto, their successors and permitted assigns, any legal
or equitable right, remedy or claim under or in respect of this
Agreement or any provision contained herein.
Signature pages follow.
IN WITNESS WHEREOF, each of Parrut and
the Company have caused their respective signature page to this
Registration Rights Agreement to be duly executed as of the date
first written above.
COMPANY:
▇▇▇▇▇▇▇▇▇.▇▇▇
GROUP, INC.
By:
Name:
▇▇▇▇ ▇▇▇▇
Title:
Chief Executive Officer
PARRUT,
INC.:
▇▇▇▇▇▇▇▇▇.▇▇▇
GROUP, INC.
By:
Name:
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Title: Chief Executive Officer