BACKSTOP INVESTMENT AGREEMENT

 

 

DATED AS OF SEPTEMBER 13, 2016

 

 

BY AND AMONG

 

 

GREAT ELM CAPITAL GROUP, INC.

 

 

AND

 

 

THE INVESTORS NAMED HEREIN

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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BACKSTOP INVESTMENT AGREEMENT

 

BACKSTOP INVESTMENT AGREEMENT, dated as of September 13, 2016 (this “Agreement”),  by and among Great Elm Capital Group, Inc., a Delaware corporation (the “Company”), and the several Investors listed in Annex 1 (the “Investors”). Certain capitalized terms are defined in Section ‎8.16.

 

RECITALS

 

The Company proposes to commence an offering to each of the holders (the "Eligible Holders") of its common stock, par value $0.001 per share (the "Common Stock"), of record as of the close of business on a record date to be determined as provided herein (the "Record Date"), of non-transferable rights (the "Rights") to subscribe for and purchase additional shares of Common Stock (the "New Shares") at a subscription price per share equal to 85% of the volume weighted average price of the Common Stock for the thirty consecutive trading days ending on and including the Record Date (the "Subscription Price") for an aggregate offering amount of $45 million (the "Aggregate Offering Amount") (such offering, as further defined in Article ‎1 and by other transactions contemplated hereby, the "Rights Offering").

 

As part of the Rights Offering, the Company will distribute to each of the Eligible Holders, at no charge, one Right for each share of Common Stock held by such Eligible Holder as of the Record Date, and each Right will entitle the holder thereof to purchase at the Subscription Price (a) New Shares from the Company (with fractional shares rounded down to the nearest whole number of New Shares and the aggregate Subscription Price adjusted accordingly) (the "Basic Subscription Privilege") and (b) if an Eligible Holder fully exercises their Basic Subscription Privilege,  such Eligible Holder’s pro rata share of the New Shares not purchased as a result of other Eligible Holders not fully exercising their Basic Subscription Privilege (the “Over Subscription Privilege”).

 

In order to facilitate the Rights Offering, the Company has requested each Investor to agree, and each Investor hereby agrees, severally and not jointly, on the terms of and subject to the conditions in this Agreement, to purchase New Shares that are not purchased by the Eligible Holders upon the exercise of Rights pursuant to the Basic Subscription Privilege or the Over Subscription Privilege (the "Unsubscribed Shares"), up to the amount set forth opposite such Investor's name on Annex 1 (the "Backstop Commitment") from the Company at the Subscription Price and subject to proration of Unsubscribed Shares among all other Investors if the amount of Unsubscribed Shares is less than the total amount of all Backstop Commitments.

 

Concurrently with the execution and delivery of this Agreement, in consideration of each Investor's Backstop Commitment, the Company and the Investors are entering into a Registration Rights Agreement, dated as of the date hereof (the "Registration Rights Agreement"), pursuant to which, upon the terms and subject to the conditions set forth in the Registration Rights Agreement, the Company has committed to prepare and file a resale registration statement, registering offers and sales of the Backup Acquired Shares (as defined below) acquired by the Investors pursuant to this Agreement.

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AGREEMENT

 

In consideration of the foregoing and the mutual covenants in this Agreement, the parties, intending to be legally bound, agree as follows:

 

1.           THE RIGHTS OFFERING AND BACKSTOP COMMITMENT

 

1.1.        The Rights Offering.

 

(a)           As promptly as practicable after the date of this Agreement, the Company shall use commercially reasonable efforts to prepare and file with the Securities and Exchange Commission (the “SEC”) a registration statement (including each amendment and supplement thereto, the “Registration Statement”) under the Securities Act of 1933 (the “Securities Act”) on Form S-3, covering the offer and sale of the Rights and the Common Stock in the Rights Offering. The Company shall not permit any securities to be included in the Registration Statement other than the Rights and the Common Stock to be issued in the Rights Offering. The Registration Statement shall be provided to the Investors and their counsel prior to its filing with the SEC, and the Investors and their counsel shall be given a reasonable opportunity to review and comment upon the Registration Statement (and any post-effective amendments). The Company shall use commercially reasonable efforts to, as promptly as practicable, (i) respond to comments to the Registration Statement raised by the staff of the SEC and (ii) cause the Registration Statement and any post-effective amendment to be declared effective by the SEC.

 

(b)          The Investors shall provide to the Company such information and other assistance as it may reasonably require in connection with the preparation and filing of the Registration Statement and the final prospectus relating to the Rights Offering filed pursuant to Rule 424 of the Securities Act (as amended or supplemented, the “Prospectus”). At the time such information is provided and at the respective times the Registration Statement and any post-effective amendments thereto become effective and as of the date of the Prospectus, no such information provided by the Investors shall include an 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.

 

(c)           At the respective times the Registration Statement and any post-effective amendments thereto become effective, the Registration Statement shall comply in all material respects with the requirements of Form S-3, and the Registration Statement and any documents incorporated by reference therein shall not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; provided , that the Company shall make no such representation with respect to information provided to it by the Investors for inclusion therein. The Prospectus, as of its date, shall not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, that the Company shall make no such representation with respect to information provided to it by the Investors for inclusion therein. The previous two sentences are

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referred to as the “10b-5 Representation.”

 

(d)          Promptly following the date on which the Registration Statement is declared effective by the SEC (the “Registration Effective Date”), the Company shall print and file with the SEC the Prospectus, distribute the Prospectus to the Company’s stockholders of record as of the Record Date and thereafter promptly commence a rights offering on the following terms: (i) the Company shall distribute, at no charge, one Right to each holder of record of Common Stock for each share of Common Stock held by such holder as of the Record Date, (ii) each Right shall entitle the holder thereof to purchase, at the election of such holder, such number of shares of Common Stock at the Subscription Price thereby entitling such holders of Rights, in the aggregate, to subscribe for an aggregate number of shares (the “Aggregate Offered Shares”) of Common Stock equal to $45 million divided by the Subscription Price;  provided  that no fractional shares of Common Stock shall be issued pursuant to the exercise of any Rights, (iii) each such Right shall be non-transferable, (iv) the rights offering shall remain open for at least sixteen days, but no more than twenty days or such longer period as required by Law (the “Subscription Period”), (v) each Eligible Holder who fully exercises all Rights held by such Eligible Holder shall be entitled to the Over-Subscription Privilege;   provided  that, if insufficient remaining shares of unsubscribed shares of Common Stock are available, all over-subscription requests shall be honored pro rata among Rights holders who exercise the Over-Subscription Privilege (based on the Basic Subscription Rights exercised), (vi) no Person (other than the Investors and their Affiliates, who may acquire New Shares as contemplated by this Agreement)  will be entitled to exercise the Rights to the extent the exercise thereof would cause such Person to acquire Beneficial Ownership, or ownership for purposes of section 382 of the Internal Revenue Code of 1986, as amended, in excess of 4.99% of the outstanding Common Stock after giving effect to the consummation of the Rights Offering and the Backstop Commitment, and (vii) any Person (other than the Investors and their Affiliates) who is, on the date of this Agreement, the Beneficial Owner of in excess of 4.99% of the outstanding Common Stock shall be entitled to exercise the Rights (including any Over-Subscription Right) only to the extent necessary to maintain her, his or its proportionate interest in the Common Stock on the date hereof.

 

(e)           Prior to the termination of this Agreement, the Company shall not amend any of the terms of the Rights Offering described in Section ‎1.1‎(d), terminate the Rights Offering or waive any material conditions to the closing of the Rights Offering, without the prior written consent of Gracie Investing LLC on behalf of all of the Investors. Subject to the terms and conditions of the Rights Offering, the Company shall effect the closing of the Rights Offering as promptly as practicable following the end of the Subscription Period. The closing of the Rights Offering shall occur at the time, for the Subscription Price and in the manner and on the terms in Section ‎1.1‎(d), as shall be set forth in the Prospectus.

 

(f)           The Company shall pay all of its expenses associated with the Registration Statement, Prospectus, the Rights Offering and the other transactions contemplated hereby, including filing and printing fees, fees and expenses of any subscription and information agents, its counsel and accounting fees and expenses and costs associated with clearing the Common Stock offered thereby for sale under applicable state securities Laws.

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1.2.         Backstop Commitment.

 

(a)           Subject to the consummation of the Rights Offering and the conditions in this Agreement, each Investor shall, severally and not jointly, purchase from the Company, and the Company shall issue to such Investor, at the Subscription Price, such Investor’s Pro Rata Portion of an aggregate number of shares of Common Stock (the “Backstop Commitment”) equal to (i)  the lesser of (A)  $45,000,000 minus the aggregate proceeds of the Rights Offering or (B) the aggregate commitment listed in the Commitment Amount column of Annex 1, divided by (ii) the Subscription Price. Notwithstanding any other section hereof, in no case shall any Investor become the beneficial owner of more than 19.9% of the outstanding Common Stock as a result of the transactions contemplated herein, and the maximum Backstop Commitment issuable to each Investor in connection with the transactions contemplated herein shall be proportionally reduced as necessary to give effect to such limitation (the “Nasdaq Cap”). Within two Business Days after the closing of the Rights Offering, the Company shall issue to the Investors a notice (the “Subscription Notice”) setting forth the number of shares of Common Stock subscribed for in the Rights Offering and the aggregate proceeds of the Rights Offering and, accordingly, the number of shares of Common Stock to be acquired by the Investors pursuant to the Backstop Commitment at the Subscription Price, subject to the Nasdaq Cap. Shares of Common Stock acquired by the Investors pursuant to the Backstop Commitment are collectively referred to as the “Backstop Acquired Shares.”

 

(b)          On the terms of and subject to the conditions in this Agreement, the closing of the Backstop Commitment (the “Closing”) shall occur on the later of (i) the third Business Day following the expiration date of the Rights Offering and (ii) the date that all of the conditions to in Article ‎5 have been satisfied or waived (other than those conditions that by their nature are to be satisfied at the Closing), at 9:00 a.m. (Eastern time) at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 525 University Avenue, 14 th Floor, Palo Alto, California 94301 or such other place, time and date as shall be agreed between the Company and the Investors (the date on which the Closing occurs, the “Closing Date”).

 

(c)           At the Closing (i) the Company shall issue to each Investor its Pro Rata Portion of the Backstop Acquired Shares against payment by or on behalf of such Investor of the aggregate Subscription Price for all such shares by wire transfer in immediately available funds to the account designated by the Company in writing at least three Business Days prior to the Closing, (ii) the Company shall deliver all other documents and certificates required to be delivered to the Investors pursuant to Section ‎5.3, and (iii) the Investors shall deliver all documents and certificates required to be delivered to the Company pursuant to Section ‎5.2.

 

(d)          The Company shall promptly use proceeds from the Rights Offering and the Backstop Commitment (i) first to pay costs of the Rights Offering and the Backstop and (ii) second, any remaining proceeds may be used for general corporate purposes (including acquisitions).

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2.            REPRESENTATIONS AND WARRANTIES OF THE COMPANY.   Except as Previously Disclosed, the Company represents and warrants to the Investors that:

 

2.1.         Organization. The Company and each of its Subsidiaries is duly incorporated or organized and validly existing as a corporation or other entity in good standing under the Laws of its jurisdiction of organization and has all corporate power and authority to own its property and assets and conduct its business as currently conducted, and, except as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect, is duly qualified as a foreign corporation for the transaction of business and is in good standing under the Laws of each other jurisdiction in which it owns or leases properties, or conducts any business so as to require such qualification.

 

2.2.         Authorization. The Company has all corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder. The execution and delivery of each of this Agreement and the Registration Rights Agreement and performance by the Company of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Company, and no further approval or authorization is required on the part of the Company. Each of this Agreement and the Registration Rights Agreement constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as such may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar Laws affecting creditors’ rights generally and by general equitable principles and except as may be limited by applicable Law and public policy (collectively, the “Enforceability Exceptions”).  No vote or consent of stockholders of the Company is required in connection with any of the transactions contemplated by this Agreement under the Company’s certificate of incorporation, the General Corporation Law of the State of Delaware (the “DGCL”), the rules and regulations of Nasdaq or otherwise.

 

2.3.         Capitalization.

 

(a)           As of the date of this Agreement, (i) the Company is authorized to issue up 100,000,000 shares of Common Stock and has 9,440,941 shares of Common Stock issued and outstanding and (ii) the Company is authorized to issue up to 5,000,000 shares of preferred stock, par value $0.01 per share (the “Preferred Stock”) and no shares of Preferred Stock are issued or outstanding. As of the date of this Agreement, there are outstanding options to purchase an aggregate of 752,403 shares of Common Stock and 33,138 shares of Common Stock reserved for issuance pursuant to outstanding restricted stock unit awards. All of the outstanding shares of Common Stock have been duly and validly authorized and issued and are fully paid and non-assessable and were not issued in violation of any preemptive rights, resale rights, rights of first refusal or similar rights.

 

(b)          All of the outstanding shares of capital stock of each of the Company’s Subsidiaries has been duly and validly authorized and issued, are fully paid and non-assessable, were not issued in violation of any pre-emptive rights, resale rights, rights of first refusal or similar rights, and are owned directly

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or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims (collectively, “Liens”), except for Liens in favor of the indenture trustee with respect to the Notes.  As of the date of this Agreement, the Company does not Beneficially Own, directly or indirectly, any equity interests of any Person that is not a Subsidiary of the Company.

 

2.4.        Valid Issuance of Shares. The Backstop Acquired Shares will be, as of the date of their issuance, duly authorized by all necessary corporate action on the part of the Company and, when issued and delivered by the Company against payment therefor as provided in this Agreement, (a) will be validly issued, fully paid and nonassessable, (b) will be free and clear of all Liens and (c) will not be subject to any statutory or contractual preemptive rights or other similar rights of stockholders.

 

2.5.         Non-Contravention; Governmental Authorizations.

 

(a)          The execution and delivery of this Agreement and the Registration Rights Agreement and the performance by the Company of its obligations under this Agreement and the Registration Rights Agreement and the consummation of the transactions contemplated hereby and thereby will not: (i) conflict with or violate any provision of the Company’s certificate of incorporation or by-laws, each as amended; (ii) conflict with or result in any breach of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give rise to any right to termination, acceleration or cancellation under any agreement, lease, mortgage, license, indenture or any other contract to which the Company or any of its Subsidiaries is a party or by which their respective properties may be bound or affected; or (iii) conflict with or violate any Law applicable to the Company or its Subsidiaries, except, in the case of clause (ii) or (iii), as would not, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.

 

(b)          Each approval, consent, order, authorization, designation, declaration or filing by or with any Governmental Entity necessary in connection with the execution and delivery by the Company of this Agreement and the consummation of the transactions contemplated hereby (except for such additional steps as may be required by Nasdaq or such additional steps as may be necessary to register or qualify the Rights and shares of Common Stock to be issued in connection with the Rights Offering and the Backstop Acquired Shares under federal securities, state securities or blue sky Laws) has been obtained or made and is in full force and effect.

 

2.6.         Periodic Filings; Financial Statements; Undisclosed Liabilities.

 

(a)           Since July 1, 2015, the Company has timely filed all reports, registrations, documents, filings, statements and submissions, together with any required amendments thereto (collectively the “Company SEC Documents”), that were required to be filed with the SEC under the Securities Act and the Securities Exchange Act of 1934 (the “Exchange Act”). As of their respective filing dates, the Company SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the Company SEC Documents contained, when filed with the SEC, and if amended, as of the date of such amendment, any untrue statement of a material fact or omitted to state a material fact required to be stated therein or

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necessary in order to make the statements made therein, in light of the circumstances in which they were made, not misleading.

 

(b)          The Company’s consolidated financial statements, including the notes thereto, included or incorporated by reference in the Company SEC Documents (the “Company Financial Statements”) have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) consistently applied in all material respects (except as may be indicated in the notes and schedules thereto) during the periods involved and present fairly in all material respects the Company’s consolidated financial position at the dates thereof and of its operations and cash flows for the periods specified therein (subject to the absence of notes and year-end adjustments in the case of unaudited statements).

 

(c)           Neither the Company nor any of its Subsidiaries has any liabilities or obligations (accrued, absolute, contingent or otherwise) of a nature that would be required to be accrued or reflected in a consolidated balance sheet prepared in accordance with GAAP, other than liabilities or obligations (A) reflected on, reserved against, or disclosed in the notes to, the consolidated balance sheets of the Company Financial Statements or (B) incurred in the ordinary course of business consistent since the date of the last consolidated balance sheet in the Company Financial Statements.

 

2.7.         No Proceedings .  No litigation or proceeding against the Company or its Subsidiaries is pending before any court, arbitrator, or administrative or governmental body, nor, to the Company’s knowledge, is any such proceeding threatened against the Company or its Subsidiaries, that would, individually or in the aggregate, reasonably be expected to materially and adversely affect the Company’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby or by the Registration Rights Agreement on a timely basis.

 

2.8.        Private Placement.  Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer or sale of the Backstop Acquired Shares. Assuming the accuracy of the Investors’ representations and warranties in Section ‎3.5, none of the Company, any of its affiliates, and any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the issuance of any of shares of Common Stock under the Securities Act, whether through integration with prior offerings or otherwise. None of the Company, its affiliates and any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of the issuance of any of the Backstop Acquired Shares under the Securities Act.

 

2.9.         Brokers and Finders. Neither the Company nor any of its Subsidiaries has employed any broker or finder or incurred any liability for any financial advisory fee, brokerage fees, commissions or finder’s fee, and no broker or finder has acted directly or indirectly for the Company or any of its Subsidiaries in connection with this Agreement, the Registration Rights Agreement or the transactions contemplated hereby or thereby.  The Company may engage broker dealers in

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connection with the Rights Offering.

 

2.10.       No Further Reliance. The Company acknowledges that it is not relying upon any representation or warranty made by the Investors other than those representations and warranties in this Agreement.

 

3.           REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.   Each Investor (solely with respect to itself) represents and warrants to the Company and each other Investor that:

 

3.1.         Organization and Authority. If such Investor is not a natural person, such Investor is duly formed and validly existing in good standing as a limited liability company under the laws of the state of its organization and has all organizational power and authority to own its property and assets and conduct its business as currently conducted and, except where the failure to be qualified or in good standing would not or reasonably be expected to prevent, materially delay or materially impede the performance by such Investor of its obligations under this Agreement or the consummation of the transactions contemplated hereby.

 

3.2.         Authorization. Such Investor has all power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement. The execution, delivery and performance by such Investor of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action of such Investor’s board, manager, trustee, members, stockholders, partners, beneficiaries or similar Persons, as the case may be, and no further approval or authorization by any of its members, partners, stockholders, beneficiaries or similar Persons is required. If such Investor is a natural person, such Investor has all necessary power and has received all necessary consents under community property and similar domestic relations laws. This Agreement constitutes the valid and binding obligation of such Investor, enforceable against such Investor in accordance with its terms, except as such may be limited by the Enforceability Exceptions.

 

3.3.         Non-Contravention; Governmental Authorization.

 

(a)          The execution and delivery by such Investor and performance by such Investor of its obligations under this Agreement and the consummation of the transactions contemplated hereby will not: (i) conflict with or violate any provision of its certificate of formation, limited liability company agreement or similar governing documents (where applicable) or community property or other domestic relations Law (where applicable); (ii) conflict with or result in any breach of, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give rise to any right to termination, acceleration or cancellation under any agreement, lease, mortgage, license, indenture or any other contract to which such Investor is a party or by which its properties may be bound or affected; or (iii) conflict with or violate any Law applicable to such Investor, except in the case of clause (ii) or (iii), as would not, individually or in the aggregate, reasonably be expected to materially and adversely affect such Investor’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a

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timely basis.

 

(b)          Each approval, consent, order, authorization, designation, declaration or filing by or with any Governmental Entity necessary in connection with the execution and delivery by such Investor of this Agreement and the consummation of the transactions contemplated herein (except for such additional steps as may be required by Nasdaq or such additional steps as may be necessary to register or qualify the Rights and shares of Common Stock to be issued in connection with the Rights Offering and the Backstop Acquired Shares under federal securities, state securities or blue sky Laws) has been obtained or made and is in full force and effect.

 

3.4.         No Proceedings .   No litigation or proceeding against such Investor or such Investor’s assets is pending before any court, arbitrator, or administrative or governmental body, nor, to such Investor’s knowledge, is any such proceeding threatened against such Investor or such Investor’s assets, that would, individually or in the aggregate, reasonably be expected to materially and adversely affect such Investor’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

 

3.5.         Securities Act Compliance. The Backstop Acquired Shares being acquired by such Investor hereunder are being acquired for its own account, for the purpose of investment and not with a view to or for sale in connection with any public resale or distribution thereof in violation of applicable securities Laws. Such Investor is an ‘‘accredited investor’’ within the meaning of Rule 501(a) under the Securities Act and is knowledgeable, sophisticated and experienced in business and financial matters that are necessary to evaluate the risks and merits of an investment in the Common Stock.

 

3.6.         Financial Capability. At the Closing, such Investor, together with its Affiliates, will have sufficient available funds to consummate the Closing on the terms of this Agreement. Such Investor is able to bear the financial risk of its investment in the Backstop Acquired Shares. Such Investor has been afforded access to information about the Company and its financial condition and business sufficient to enable such Investor to evaluate its investment in the Backstop Acquired Shares.

 

3.7.         No Registration. Such Investor understands (i) that the offer and sale of the Backstop Acquired Shares to be purchased by it pursuant to this Agreement have not been registered under the Securities Act or any state securities laws, (ii) that the Company shall not be required to effect any registration or qualification of the Backstop Acquired Shares under the Securities Act or any state securities laws, except pursuant to the Registration Rights Agreement, (iii) that the Backstop Acquired Shares will be issued in reliance upon exemptions contained in the Securities Act or interpretations thereof and in the applicable state securities laws and (iv) that the Backstop Acquired Shares may not be offered for sale, sold or otherwise transferred except pursuant to a registration statement under the Securities Act or in a transaction exempt from or not subject to registration under the Securities Act.

 

3.8.         Ownership. As of the date of this Agreement, such Investors and their Affiliates are the Beneficial

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Owners of the number of shares of Common Stock set forth adjacent to such Investor’s name on Annex 1.

 

3.9.         No Further Reliance. Such Investor acknowledges that it is not relying upon any representation or warranty made by the Company other than those representations and warranties in this Agreement.

 

4.           COVENANTS

 

4.1.         Conduct of the Business. Prior to the earlier of the Closing and the termination of this Agreement (the “Pre-Closing Period”), the Company shall not, and shall cause each of its Subsidiaries not to, take any actions outside of the ordinary course of business. During the Pre-Closing Period, except as contemplated by this Agreement, as approved by the full board of directors of the Company (the “Board”) prior to the taking of such action or with the prior written consent of Gracie Investing LLC on behalf of all of the Investors, the Company shall not, and shall cause each of its Subsidiaries not to: (i) declare or pay any dividend or distribution on its shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock (except for dividends paid by any direct or indirect wholly owned Subsidiary of the Company to the Company or to any other direct or indirect wholly owned Subsidiary of the Company), (ii) adjust, split, combine or reclassify or otherwise amend the terms of its capital stock, (iii) repurchase, redeem, purchase, acquire, encumber, pledge, dispose of or otherwise transfer, directly or indirectly, any of its shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) its capital stock, (iv) other than Excluded Issuances, issue, grant, deliver or sell any shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) its capital stock (other than with respect to the issuance of the Rights and the Common Stock issuable upon the exercise thereof), (v) make any amendments to its organizational documents, (vi) sell, lease or otherwise dispose of a material amount of assets or securities, including by merger, consolidation, asset sale or other business combination, other than sales of assets in the ordinary course of business consistent with past practice; (vii) make any material acquisitions, by purchase or other acquisition of shares or other equity interests, or by merger, consolidation or other business combination, or material purchase of any property or assets, to or from any Person (except in respect of the Full Circle Capital Corporation transaction), (viii) adopt a plan of complete or partial liquidation or resolutions providing for a complete or partial liquidation, dissolution, restructuring, recapitalization or other reorganization, or (ix) agree or commit to do any of the foregoing. For the avoidance of doubt, the foregoing shall not restrict the Company from engaging in discussions with a third party with respect to a Superior Transaction or terminating this Agreement to enter into a definitive agreement to effect a Superior Transaction ( provided that prior to or concurrently with such termination the Company pays the Termination Fee per Section ‎8.4(b)).

 

4.2.         Securities to be Issued. The Common Stock to be issued to the Investors pursuant to this Agreement (a) shall be subject to the terms and provisions of the Company’s certificate of incorporation as in effect on the date hereof and (b) for the avoidance of doubt, shall be deemed “Registrable Securities” under the Registration Agreement.

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4.3.         Efforts. From the date hereof until the earlier of the Closing and the date that this Agreement is terminated, the Investors and the Company shall (i) use commercially reasonable efforts to cooperate with each other in (A) determining whether any filings are required to be made with, or consents, permits, authorizations, waivers, clearances, approvals, and expirations or terminations of waiting periods are required to be obtained from, any other Governmental Entities in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and (B) timely making all such filings and timely obtaining all such consents, permits, authorizations or approvals; (ii) use commercially reasonable efforts to supply to any Governmental Entity as promptly as practicable any additional information or documents that may be requested pursuant to any Law or by such Governmental Entity; (iii) promptly inform the other party of any substantive meeting, discussion, or communication with any Governmental Entity (other than any taxing authority) (and shall supply to the other party any written communication or other written correspondence or memoranda prepared for such purpose, subject to applicable Laws relating to the exchange of information or as necessary to preserve attorney-client privilege) in respect of any filings, investigation or inquiry concerning the transactions contemplated hereby, and shall consult with the other party in advance and, to the extent permitted by such Governmental Entity, give the other party the opportunity to attend and participate thereat and (iv) use commercially reasonable efforts to take, or cause to be taken, all other actions and do, or cause to be done, all other things necessary, proper or advisable to consummate the Closing and the other transactions contemplated hereby, including taking all such further action as may be necessary to resolve such objections, if any, as may be asserted under Law with respect to the transactions contemplated hereby and by the Registration Rights Agreement. The Company shall reimburse the Investors for all filing fees incurred by the Investors with respect to all filings contemplated by this Section ‎4.3 within five Business Days of the date each such fee is invoiced by such Investors to the Company.

 

4.4.         Publicity. No public release or announcement concerning the transactions contemplated hereby shall be issued by any party without the prior consent of the other party (which consent shall not be unreasonably withheld, conditioned or delayed), except as such release or announcement may be required by Law or the rules or regulations of Nasdaq, in which case the party required to make the release or announcement shall, to the extent reasonably practicable, allow the other party reasonable time to review and comment on such release or announcement in advance of such issuance. This Section ‎4.4 shall not restrict the ability of a party hereto to summarize or describe the transactions contemplated by this Agreement or the Registration Rights Agreement in the Registration Statement or Prospectus or any amendment or supplement thereto or any other prospectus or similar offering document or other report required by Law, regulation or Nasdaq rule so long as the other party is provided a reasonable opportunity to review and comment on such disclosure in advance.

 

4.5.         Nasdaq Listing. The Company shall as promptly as practicable after the date of this Agreement use reasonable best efforts to cause the Common Stock to be issued in the Rights Offering, to be approved for listing on Nasdaq, subject to official notice of issuance.

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4.6.         No Transfers. Until the earlier to occur of the Closing Date or the termination of this Agreement, no Investor will, without the prior consent of the Company, transfer, sell, encumber, assign, pledge or otherwise dispose of any shares of Common Stock held, directly or indirectly, by such Investor; provided, however , that upon prior notice to the Company confirming compliance herewith, such Investor may (i) transfer, assign or dispose all or any portion of its Common Stock to one or more Affiliates, which shall agree in writing to take such Common Stock subject to, and comply with, the terms of this Agreement or (ii) effect an in-kind distribution of such shares to such Investor’s or its Affiliates’ equity holders (including limited partners), but, in the case of an in-kind distribution, such Investor shall not be relieved of its obligations hereunder.

 

4.7.         No Stabilization. In connection with the Rights Offering, the Investors will not take, directly or indirectly, any action designed to or that would reasonably be expected to cause or result in any stabilization or manipulation of the price of the Common Stock in violation of Regulation M under the Exchange Act.

 

5.           CONDITIONS TO CLOSING

 

5.1.         Conditions to the Obligations of the Company and the Investors. The obligations of the Company and the Investors to effect the Closing shall be subject to the following conditions:

 

(a)           receipt of all approvals and authorizations of, filings with, and notifications to, or expiration or termination of any applicable waiting period, under applicable Law required to consummate the transactions contemplated hereunder, if any;

 

(b)          no provision of any applicable Law and no judgment, injunction, order or decree shall prohibit the consummation of any of the transactions contemplated at the Closing;

 

(c)          the Registration Statement shall have been declared effective by the SEC and shall continue to be effective and no stop order shall have been entered by the SEC with respect thereto;

 

(d)          the shares of Common Stock to be issued in the Rights Offering shall be approved for listing on Nasdaq, subject to official notice of issuance; and

 

(e)          the Rights Offering shall have been consummated in accordance with the terms of and subject to the conditions in Section ‎1.1(d).

 

5.2.        Conditions to the Obligations of the Company. The obligations of the Company to effect the Closing shall be subject to the following conditions:

 

(a)          The representations of the Investors in Section ‎1.1(b) shall be true and correct (i) in the case of the Registration Statement and any post-effective amendments thereto, at the respective times referred to in Section ‎1.1(c), and in the case of the Prospectus, as of its date, and (ii) as of the Closing Date,

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except that in the case of this clause (ii) all references to any time period or date referred to in Section ‎1.1(b) shall be deemed to be references to the Closing Date. All other representations and warranties of the Investors contained in this Agreement (A) that are qualified by materiality, material adverse effect or words of similar import, shall be true and correct as of the date hereof and as of the Closing (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date) and (B) that are not qualified by materiality, material adverse effect or words of similar import, shall be true and correct in all material respects as of the date hereof and as of the Closing (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date).

 

(b)          Each of the Investors shall have performed in all material respects all of its obligations hereunder required to be performed by it, and complied with the covenants hereunder applicable to it in all material respects, at or prior to the Closing.

 

(c)           Since the date of this Agreement, there shall not have been any material adverse effect or any effect that would, individually or in the aggregate, reasonably be expected to materially and adversely affect the Investors’ ability to perform their obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.

 

(d)          The Company shall have received a certificate, signed by an authorized person of each Investor, certifying as to the matters set forth in Sections 5.2(a), ‎5.2(b) and ‎5.2(c).

 

(e)          The Investors shall have entered into an agreement with the Company to vote, for a period of three years following the Closing, all of the Backstop Acquired Shares consistent with the recommendation of the board of directors of the Company on any matter submitted to the vote of the stockholders of the Company.

 

5.3.        Conditions to the Obligations of the Investors. The obligations of the Investors to effect the Closing shall be subject to the following conditions:

 

(a)          The 10b-5 Representation shall be true and correct in all respects (i) in the case of the Registration Statement and any post-effective amendments thereto, at the respective times referred to in Section 1.1(c), and in the case of the Prospectus, as of its date, and (ii) as of the Closing Date, except that in the case of this clause (ii) all references to any time period or date referred to in Section 1.1(c) shall be deemed to be references to the Closing Date. All other representations and warranties of the Company contained in this Agreement (A) that are qualified by materiality, Material Adverse Effect or words of similar import, shall be true and correct as of the date hereof and as of the Closing (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct as of such earlier date) and (B) that are not qualified by materiality, Material Adverse Effect or words of similar import, shall be true and correct in all material respects as of the date hereof and as of the Closing

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(except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and warranty shall be true and correct in all material respects as of such earlier date).

 

(b)          The Company shall have performed in all material respects all of its obligations hereunder required to be performed by it, and complied with the covenants hereunder applicable to it in all material respects. at or prior to the Closing.

 

(c)           Since the date of this Agreement, there shall not have been any Material Adverse Effect or any Effect that would, individually or in the aggregate, have or reasonably be expected to have a Material Adverse Effect.

 

(d)          The Investors shall have received a certificate, signed by an officer of the Company, certifying as to the matters set forth in Sections ‎5.3‎(a),  ‎5.3‎(b) and ‎5.3‎(c).

 

5.4.         Frustration of Closing Conditions. Neither the Company nor any Investor may rely on the failure of any condition in this Article ‎5 to be satisfied if such failure was caused by such party’s failure to act in good faith or use commercially reasonable efforts to consummate the transactions contemplated hereby.

 

6.           TERMINATION

 

6.1.         Termination.  This Agreement may be terminated at any time prior to the Closing, but the following termination rights may not be exercised by a party whose breach is a proximate cause of the arising of any of the following termination rights:

 

(a)          by mutual written agreement of the Company and the Investors;

 

(b)          by either the Company or the Investors, upon written notice to the other, in the event that the Closing does not occur on or before December 31, 2016 (the “Outside Date”); provided ,  that such date may be extended as of November 30, 2016 for a period of up to ninety days by either the Company or the Investors if the condition in Section ‎5.1‎5.1(c) has not been satisfied by November 25, 2016;

 

(c)           by either the Company or the Investors, upon written notice to the other party, if any Governmental Entity shall have issued any order, decree or injunction or taken any other action restraining, enjoining or prohibiting any of the transactions contemplated by this Agreement, and such order, decree, injunction or other action shall have become final and nonappealable;

 

(d)          by the Investors, if a breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement shall have occurred that would, if occurring or continuing on the Closing Date, cause the conditions set forth in Section ‎5.3(a),  ‎5.3(b) or ‎5.3(c) not to be satisfied, and such breach is not cured, or is incapable of being cured, within ten days (but no later

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than the Outside Date) of receipt of written notice by the Investors to the Company of such breach;

 

(e)           by the Company, if a breach of any representation, warranty, covenant or agreement on the part of the Investors set forth in this Agreement shall have occurred that would, if occurring or continuing on the Closing Date, cause the conditions set forth in Section ‎5.2(a),  ‎5.2(b) or ‎5.2(c) not to be satisfied, and such breach is not cured, or is incapable of being cured, within ten days (but no later than the Outside Date) of receipt of written notice by the Company to the Investors of such breach; provided that if the non-breaching Investors assume and perform the defaulting Investors’ obligations hereunder during such cure period, the Company shall not have such termination right under this Section ;

 

(f)           by the Investors, upon written notice to the Company, if the Company shall have entered into a definitive agreement to effect a Superior Transaction (it being understood that the Company shall pay the Termination Fee per Section ‎8.4(b)); or

 

(g)           by the Company, upon written notice to the Investors, if the Company shall have entered into a definitive agreement to effect a Superior Transaction and prior to or concurrently with such termination the Company pays the Termination Fee per Section ‎8.4(b).

 

6.2.         Effects of Termination. If  this Agreement is terminated per Section ‎6.1, this Agreement (other than Article ‎8 which shall remain in full force and effect) shall forthwith become wholly void and of no further force and effect. Nothing herein shall relieve any party from liability for fraud or willful breach of this Agreement.

 

7.           INDEMNIFICATION.

 

7.1.         Indemnification by the Company. Notwithstanding anything in this Agreement to the contrary, whether or not the Rights Offering, the issuance of any shares of Common Stock to any Investors or the other transactions contemplated hereby are consummated or this Agreement is terminated, from and after the date hereof, the Company agrees to indemnify and hold harmless each Investor, its Affiliates, and each of their respective officers, directors, managers, partners, members, agents, representatives, successors, assigns and employees and each other Person, if any, who controls (within the meaning of the Securities Act) such Investor or its Affiliates (all such Persons being hereinafter referred to, collectively, as the "Investor Indemnified Persons") against any losses, claims, damages, liabilities or expenses (collectively, "Losses") to which such Investor Indemnified Person may become subject, under the Securities Act or otherwise, insofar as such Losses (or actions in respect thereof as contemplated below) arise out of or are based upon (a) any inaccuracy in or breach of any representation or warranty of the Company in this Agreement, (b) any failure by the Company to comply with the covenants and agreements contained in this Agreement, (c) an untrue statement or alleged untrue statement of any material fact contained in the Registration Statement, including the Prospectus and all other documents filed as a part thereof or incorporated by reference therein, or an omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under

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which they were made, not misleading, (d) any litigation or proceeding by any stockholder of the Company or any other Person relating to this Agreement or the documents contemplated hereby, or the transactions contemplated hereby, or (e) by reason of the fact that such Investor is a party to this Agreement or in any way arising, directly or indirectly, from the Rights Offering or the consummation of the transactions contemplated by this Agreement. The Company will promptly reimburse such Investor Indemnified Persons for any legal and other expenses as such expenses are reasonably incurred by such Investor Indemnified Persons in connection with investigating, defending or preparing to defend, settling, compromising or paying any such Losses; provided, however , that the Company will not be liable to any Investor Indemnified Person in any such case to the extent that any such Losses arise out of or are based upon (i) an untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company by the applicable Investor or its representatives expressly for use therein, (ii) the failure of such Investor Indemnified Person or its Affiliate to perform any covenant in this Agreement with respect to the sale of the Shares, (iii) the inaccuracy of any representation or warranty made by such Investor Indemnified Person or its Affiliate in this Agreement or (iv) the gross negligence or willful misconduct of such Investor Indemnified Person or its Affiliate. 

 

7.2.         Indemnification by the Investors. Each Investor, severally and not jointly, agrees to indemnify and hold harmless the Company, its Affiliates, and each of their respective officers, directors, managers, partners, members, agents, representatives, successors, assigns and employees and each other Person, if any, who controls (within the meaning of the Securities Act) the Company or its controlled Affiliates (all such Persons being hereinafter referred to, collectively, as the "Company Indemnified Persons"), against any Losses to which any Company Indemnified Person may become subject, under the Securities Act or otherwise, insofar as such Losses (or actions in respect thereof as contemplated below) arise out of or are based upon (a) any breach of any representation or warranty or breach of or failure to perform any covenant or agreement on the part of such Investor contained in this Agreement or (b) an untrue statement or alleged untrue statement or omission or alleged omission in reliance upon and in conformity with written information furnished to the Company by that Investor expressly for use therein, and such Investor will promptly reimburse such Company Indemnified Persons for any legal and other expenses as such expenses are reasonably incurred by such Company Indemnified Persons in connection with investigating, defending or preparing to defend, settling, compromising or paying any such Losses; provided, however, that such Investor will not be liable in any such case to the extent that any such Losses arise out of or are based upon (i) the failure of the Company or any other Investor to perform any of its covenants in this Agreement, (ii) the inaccuracy of any representation or warranty made by the Company or any other Investor in this Agreement  (iii) the gross negligence or willful misconduct of any Company Indemnified Person or any other Investor or (iv) in an amount in excess of the fees received by such Investor hereunder. 

 

7.3.         Indemnification Procedures. Promptly after receipt by an indemnified party under this Article ‎7 of notice of the threat or commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party under this Article ‎7, promptly notify

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the indemnifying party in writing thereof, but the omission to notify the indemnifying party will not relieve such indemnifying party from any liability that it may have to any indemnified party for contribution or otherwise under the indemnity agreement contained in this Article ‎7 to the extent such indemnifying party is not prejudiced as a result of such failure to promptly notify. Such notice shall describe in reasonable detail such claim. In case any such action is brought against any indemnified party and such indemnified party seeks or intends to seek indemnity from an indemnifying party, the indemnifying party will be entitled to participate in, and, to the extent that it may elect by written notice delivered to such indemnified party within thirty days of such indemnifying party's receipt of notice of such action from such indemnified party, jointly with all other indemnifying parties similarly notified, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party; provided, however , (a) if the indemnifying party has failed promptly to assume the defense of such proceeding and to employ counsel reasonably satisfactory to such indemnified party in any such proceeding or (b) if the defendants in any such action include both the indemnified party and the indemnifying party, and the indemnified party shall have reasonably concluded, based on the advice of counsel, that there may be a conflict of interest between the positions of the indemnifying party and the indemnified party in conducting the defense of any such action or that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party, in any such case, the indemnified party or parties shall have the right to select separate counsel to assume or assert, as the case may be, such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. Upon receipt of notice from the indemnifying party to such indemnified party of its election to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party will not be liable to such indemnified party under this Article ‎7 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed such counsel in connection with the assumption or assertion, as the case may be, of legal defenses in accordance with the proviso to the preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel in any jurisdiction (and as required, local counsels), reasonably satisfactory to such indemnifying party, representing the indemnified party), (ii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent such indemnified party within a reasonable time after notice of commencement of action or (iii) the indemnifying party shall have authorized in writing the employment of counsel for such indemnified person, in each of which cases the reasonable fees and expenses of counsel shall be at the expense of the indemnifying party. The indemnifying party shall not be liable for any settlement of any action without its written consent. In no event shall any indemnifying party be liable in respect of any amounts paid in settlement of any action unless the indemnifying party shall have approved in writing the terms of such settlement. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnification could have been sought hereunder by such indemnified party from all liability on claims that are the subject matter of such proceeding unless such settlement or compromise includes an unconditional release of such indemnified party from all liability arising out of such litigation or proceeding. 

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7.4.         Contribution. If the indemnification provided for in this Article ‎7 is required by its terms but is for any reason held to be unavailable to or otherwise insufficient to hold harmless an indemnified party under Sections ‎7.1,  ‎7.2 and ‎7.3 in respect to any Losses referred to herein, then each applicable indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of any Losses referred to herein in such proportion as is appropriate to reflect the relative fault of the Company and the applicable Investor in connection with the statements or omissions or inaccuracies in the representations and warranties in this Agreement and/or the Registration Statement, including the Prospectus, that resulted in such Losses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and the applicable Investor on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact, or the omission or alleged omission to state a material fact, or the inaccurate or the alleged inaccurate representation and/or warranty relates to information supplied by the Company or by the applicable Investor and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The amount paid or payable by a party as a result of the Losses shall be deemed to include, subject to the limitations in Section ‎7.3, any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The provisions of Section ‎7.3 with respect to the notice of the threat or commencement of any threat or action shall apply if a claim for contribution is to be made under this Section ‎7.4;   provided, however, that no additional notice shall be required with respect to any threat or action for which notice has been given under Section ‎7.3 for purposes of indemnification. The Company and each Investor agree that it would not be just and equitable if contribution pursuant to this Section ‎7.4 were determined solely by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in this paragraph. No person guilty of fraudulent misrepresentation (within the meaning of Section 12(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

 

7.5.         Article ‎ 7 Not Exclusive.  The obligations of the Company under this Article ‎7 shall be in addition to any liability which the Company may otherwise have to any Investor Indemnified Person. The obligations of each Investor under this Article ‎7 shall be in addition to any liability which such Investor may otherwise have to any Company Indemnified Person. The remedies provided in this Article ‎7 are not exclusive and shall not limit any rights or remedies which may otherwise be available to the parties at law or in equity.

 

8.           MISCELLANEOUS

 

8.1.         Survival. Each of the representations and warranties in this Agreement (or any certificate delivered pursuant hereto) shall survive the Closing indefinitely (or, in each case, until final resolution of any claim or actions arising from the breach of any such representation and warranty, if written notice of such breach was provided prior to the end of such survival period).

 

8.2.         Legends.  Each Investor agrees with the Company that each Backstop Acquired Share shall contain

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a legend substantially to the following effect, unless the Company determines otherwise in accordance with applicable Law:

 

"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF ANY STATE OR ANOTHER JURISDICTION. THE SHARES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OR (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE SECURITIES LAWS AND THE SECURITIES LAWS OF OTHER JURISDICTIONS, AND IN THE CASE OF A TRANSACTION EXEMPT FROM REGISTRATION, UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND SUCH OTHER APPLICABLE LAWS

 

VOTING OF THE SHARES EVIDENCED BY THIS CERTIFICATE IS RESTRICTED BY A VOTING AGREEMENT.  THE VOTING AGREEMENT MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY."

 

8.3.         Further Assurances.  Each party hereto shall do and perform or cause to be done and performed all further acts and shall execute and deliver all other agreements, certificates, instruments and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

8.4.         Fees and Expenses.

 

(a)          Expenses.

 

(i)          Regardless of whether the Closing occurs, the Company shall reimburse the Investors for all reasonable out-of-pocket fees and expenses (including attorneys’ fees and expenses) incurred by the Investors in connection with this Agreement and the transactions contemplated hereby; provided, however , that such fees and expenses shall not be reimbursed by the Company if this Agreement is terminated by the Company pursuant to Section ‎ 6.1(e).

 

(ii)         Payment of the Investors’ fees and expenses by the Company pursuant to this Section ‎ 8.4 shall be made at the Closing or, if this Agreement is terminated other than by the Company pursuant to Section ‎ 6.1 ‎ 6.1(e), no later than three Business Days after delivery by the

 

Investors to the Company of written notice of (A) demand for payment after the termination of this Agreement, and (B) reasonably detailed documentation of such fees and expenses.

 

(b)         Termination Fee.

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(i)          If  this Agreement is terminated per Section ‎‎ 6.1(f) or per Section ‎‎ 6.1(g), then the Company shall, simultaneously with such termination (in the case of a termination by the Company) or within one Business Day following such termination (in the case of a termination by the Investor), pay the Investors the Termination Fee per Section ‎ 8.4 ‎ (d).  If the Commitment Fee is paid to the Investors and the Termination Fee subsequently becomes payable pursuant to this Section ‎ 8.4 ‎ (b), the Termination Fee shall be reduced by the amount of the Commitment Fee.

 

(ii)         Notwithstanding anything to the contrary in this Agreement, the parties hereby acknowledge that if the Termination Fee becomes payable and is paid per this Section ‎ 8.4 ‎ (b), the Termination Fee (and reimbursement of expenses pursuant to Section ‎ 8.4 ‎ (a) and, if applicable, payment of the Commitment Fee pursuant to Section ‎ 8.4 ‎ (c)) shall, absent fraud or willful breach of this Agreement, be the Investors’ sole and exclusive remedy under this Agreement.   No officer or director of the Company shall be entitled to any fee hereunder and such amount otherwise payable to an officer or director of the Company shall be retained by the Company.

 

(c)          The Company shall pay the Investors an aggregate amount equal to $549,450 (the “Commitment Fee”) upon the earliest to occur of (i) the completion of the Rights Offering, (ii) the Closing or (iii) the termination of this Agreement pursuant to Section ‎6.1. The Rights Offering will be deemed to commence on the date that the Rights are distributed to the Company’s stockholders.  The Commitment Fee may be paid in cash or in unregistered shares of Common Stock valued at the Subscription Price per share.  Any such shares shall be entitled to the same benefits and subject to the same restrictions as Backstop Acquired Shares for purposes of this Agreement and the Registration Rights Agreement.  No officer or director of the Company shall be entitled to any fee under this Section and such amount otherwise payable to an officer or director of the Company shall be retained by the Company.

 

(d)           Any amount that becomes payable by the Company in cash pursuant to this Section ‎8.4 shall be paid by wire transfer of immediately available funds to account(s) designated in writing by the Investors.

 

8.5.         Choice of Law.  This Agreement and the transactions contemplated hereby will be governed by the laws of the State of Delaware that are applicable to contracts made in and performed solely in Delaware.

 

8.6.         Enforcement.

 

(a)           Any dispute arising under, related to or otherwise involving this Agreement or the transactions contemplated hereby will be litigated in the Court of Chancery of the State of Delaware.  The parties agree to submit to the jurisdiction of the Court of Chancery of the State of Delaware and waive trial by jury.  The parties do not consent to mediate any disputes before the Court of Chancery.

 

(b)         Notwithstanding the foregoing, if there is a determination that the Court of Chancery of the State

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of Delaware does not have subject matter jurisdiction over any dispute arising under this Agreement, the parties agree that: (i) such dispute will be adjudicated only by, and will be subject to the exclusive jurisdiction and venue of, the Superior Court of Delaware of and for the County of New Castle; (ii) if the Superior Court of Delaware does not have subject matter jurisdiction over such dispute, then such dispute will be adjudicated only by, and will be subject to the exclusive jurisdiction and venue of, the Complex Commercial Litigation Division of the Superior Court of the State of Delaware of and for the County of Newcastle; and (iii) if the Complex Commercial Litigation Division of the Superior Court of the State of Delaware does not have subject matter jurisdiction over such dispute, then such dispute will be adjudicated only by, and will be subject to the exclusive jurisdiction and venue of, the United States District Court for the State of Delaware.

 

(c)          Each of the parties irrevocably (i) consents to submit itself to the personal jurisdiction of the Delaware courts in connection with any dispute arising under this Agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for relief from the Delaware courts or any other court or governmental body and (iii) agrees that it will not bring any action arising under this Agreement in any court other than the Delaware courts.  EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF THIS AGREEMENT, THE NEGOTIATION OR ENFORCEMENT HEREOF OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

(d)         Process may be served in the manner specified in Section ‎‎‎8.7, such service will be deemed effective on the date of such notice, and each party irrevocably waives any defenses or objections it may have to service in such manner.

 

(e)           The court shall award attorneys’ fees and expenses and costs to the substantially prevailing party in any action (including appeals) for the enforcement or interpretation of this Agreement.  If there are cross claims in such action (including appeals), the court will determine which party is the substantially prevailing party as to the action as a whole and award fees, expenses and costs to such party.

 

(f)           The transactions contemplated by this Agreement are unique. Accordingly, each of the Company and each Investor acknowledges and agrees that, in addition to all other remedies to which it may be entitled, each of the parties hereto is entitled to seek a decree of specific performance (except in the circumstances in which the Termination Fee is payable and paid under Section ‎8.4‎8.4(b));  provided  that the party seeking specific performance is not in material default hereunder. The Company and the Investors agree that, if for any reason a party shall have failed to perform its obligations under this Agreement, then the party seeking to enforce this Agreement against such nonperforming party shall be entitled to specific performance and injunctive and other equitable relief, and the parties further agree to waive any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief. Except in the circumstances in which the Termination Fee is payable and paid under Section ‎8.4(b), this

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provision is without prejudice to any other rights that any party may have against another party for any failure to perform its obligations under this Agreement, including the right to seek damages for a breach of any provision of this Agreement, and all rights, powers and remedies available (at law or in equity) to a party in respect hereof by the other party shall be cumulative and not alternative or exclusive, and the exercise or beginning of the exercise of any thereof by a party shall not preclude the simultaneous or later exercise of any other rights, powers or remedies by such party. For the avoidance of doubt, in circumstances in which the Termination Fee is payable and paid, other than in the case of fraud or willful breach of this Agreement, such Termination Fee shall be the Investors’ sole and exclusive remedy and the Investor shall not be entitled to specific performance or any other form of equitable relief.

 

8.7.         Notices.  All notices and other communications hereunder will be in writing and will be deemed given when delivered personally or by an internationally recognized courier service, such as DHL, to the parties at the following addresses (or at such other address for a party as may be specified by like notice):

 

If to the Company:	Great Elm Capital Group, Inc.
	200 Clarendon Street, 51st Floor
	Boston, MA 02116
	Attention: General Counsel; with a copy
(which shall not constitute notice) to:	Skadden, Arps, Slate, Meagher & Flom LLP
	525 University Avenue, 14 th Floor
	Palo Alto, CA  94301
	Attention: Michael J. Mies
If to any Investor to:	the address set forth below such Investor’s name in Annex 1.

 

8.8.         No Third Party Beneficiaries.  Except as provided in Article ‎7, this Agreement is solely for the benefit of the parties.  Except as provided in Article ‎7, no other Person will be entitled to rely on this Agreement or to anticipate the benefits of this Agreement as a third party beneficiary hereof.

 

8.9.         Assignment.  Except for assignment to bona fide retirement vehicles or bona fide estate planning vehicles or members of the immediate family of a natural person Investor or assignment to one or more Affiliates of the other Investors hereunder, no party may assign, delegate or otherwise transfer this Agreement or any rights or obligations under this Agreement in whole or in part (whether by operation of law or otherwise), without the prior written content of the other parties.  Subject to the foregoing, this Agreement will not relieve the assigning party of any liability or obligation hereunder and will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.  Any assignment in violation of this Section ‎‎‎8.9 will be null and void.

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8.10.       No Waiver.  No failure or delay in the exercise or assertion of any right hereunder will impair such right or be construed to be a waiver of, or acquiescence in, or create an estoppel with respect to any breach of any representation, warranty or covenant herein, nor will any single or partial exercise of any such right preclude other or further exercise thereof or of any other right.  All rights and remedies under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

8.11.       Severability.  Any term or provision hereof that is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the invalid, void or unenforceable term or provision in any other situation or in any other jurisdiction.  If the final judgment of a court of competent jurisdiction or other authority declares any term or provision hereof invalid, void or unenforceable, the court or other authority making such determination will have the power to and will, subject to the discretion of such body, reduce the scope, duration, area or applicability of the term or provision, to delete specific words or phrases, or to replace any invalid, void or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision.

 

8.12.       Amendment.  Subject to applicable Law, the parties may (a) extend the time for the performance of obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party herein, (c) waive compliance by the other party with any of the agreements or conditions herein or (d) amend, modify or supplement this Agreement.  Any agreement on the part of a party to any such extension, waiver, amendment, modification or supplement will be valid only if in an instrument in writing signed by an authorized representative of such party.  Any consent required of the Investors will be binding on all Investors if effected with the consent of Investors whose Pro Rata Interest in the aggregate represents more than fifty percent of $36.6 million; provided that any amendment that disproportionately and adversely effects an Investor will not be effective against such Investor without her, its or his consent.

 

8.13.       Entire Agreement.  This Agreement contains the entire agreement of the parties and supersedes all prior and contemporaneous agreements, negotiations, arrangements, representations and understandings, written, oral or otherwise, between the parties with respect to the subject matter hereof.

 

8.14.       Counterparts.  This Agreement may be executed in one or more counterparts (whether delivered by electronic copy or otherwise), each of which will be considered one and the same agreement and will become effective when counterparts have been signed by each of the parties and delivered to the other party.  Each party need not sign the same counterpart.

 

8.15.      Construction and Interpretation.  When a reference is made in this Agreement to a section or article, such reference will be to a section or article of this Agreement, unless otherwise clearly indicated to the contrary.  Whenever the words “include,” “includes” or “including” are used in this

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Agreement they will be deemed to be followed by the words “without limitation”.  The words “hereof,” “herein” and “herewith” and words of similar import will, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and article and section references are references to the articles and sections of this Agreement, unless otherwise specified.  The plural of any defined term will have a meaning correlative to such defined term and words denoting any gender will include all genders and the neuter.  Where a word or phrase is defined herein, each of its other grammatical forms will have a corresponding meaning.  A reference to any legislation or to any provision of any legislation will include any modification, amendment, re-enactment thereof, any legislative provision substituted therefore and all rules, regulations and statutory instruments issued or related to such legislation.  If any ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties, and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.  No prior draft of this Agreement will be used in the interpretation or construction of this Agreement.  The parties intend that each provision of this Agreement will be given full separate and independent effect.  Although the same or similar subject matters may be addressed in different provisions of this Agreement, the parties intend that, except as expressly provided herein, each such provision will be read separately, be given independent significance and not be construed as limiting any other provision of this Agreement (whether or not more general or more specific in scope, substance or content).  Headings are used for convenience only and will not in any way affect the construction or interpretation of this Agreement.  References to documents includes electronic communications.

 

8.16.      Definitions. As used in this Agreement, the terms have the following meanings:

 

(a)         “Acquisition Transaction” means a (i) a merger, joint venture, partnership, consolidation, dissolution, liquidation, tender offer, recapitalization, reorganization, share exchange, business combination or similar transaction involving the Company or (ii) any other direct or indirect acquisition involving 50% or more of the total voting power of the Company, or all or substantially all of the consolidated total assets (including equity securities of its Subsidiaries) of the Company.

 

(b)        “Affiliate” of any Person means any other Person directly or indirectly Controlling or Controlled by or under direct or indirect common Control with such Person; provided, for purposes of this Agreement, the Company and its subsidiaries shall not be deemed to be Affiliates of the Investors.

 

(c)         “Alternative Financing Transaction” means a transaction or series of related transactions pursuant to which a Person provides to the Company debt or equity financing; provided that an Alternative Financing Transaction shall not include (i) a change of control transaction involving the Company or its stockholders, (ii) the liquidation, dissolution or reorganization of the Company, or (iii) an Acquisition Transaction.

 

(d)         Any Person shall be deemed to “Beneficially Own”, to have “Beneficial Ownership” of, or to be “Beneficially Owning” any securities (which securities shall also be deemed “Beneficially Owned” by such Person) that such Person is deemed to (i) “beneficially own” within the meaning of Rules

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13d-3 and 13d-5 under the Exchange Act as in effect on the date of this Agreement or (ii) own for purposes of determining such person’s ownership under Section 382 of the Internal Revenue Code of 1986, as amended, and the related Treasury Regulations.

 

(e)         “Business Day” means any day other than a Saturday, Sunday or one on which banks are authorized to close in New York, New York.

 

(f)         “Control” has the meaning specified in Rule 12b-2 under the Exchange Act.

 

(g)         “DGCL” means the General Corporation Law of the State of Delaware.

 

(h)         “Effect” shall have the meaning set forth in the definition of “Material Adverse Effect.”

 

(i)         “Excluded Issuance” means any issuances of Common Stock, or options to acquire Common Stock, in bona fide employment or consulting relationships that are approved by the Board or a duly authorized committee of the Board.

 

(j)         “Governmental Entity” means any domestic or foreign governmental or regulatory authority, agency, commission, body, court or other legislative, executive or judicial governmental entity.

 

(k)         “Law” means any federal, state, local or foreign law (including the Foreign Corrupt Practices Act of 1977 and the laws implemented by the Office of Foreign Assets Control, United States Department of Treasury), statute or ordinance, common law, or any rule, regulation, judgment, order, writ, injunction, decree, arbitration award, license or permit of any Governmental Entity.

 

(l)         “Material Adverse Effect” means any event, state of facts, circumstance, development, change, effect or occurrence (an “Effect”) that (i) is or could reasonably be expected to be materially adverse to the financial condition, business, properties, assets, liabilities or results of operations of the Company and its Subsidiaries taken as a whole, other than any Effect: (A) arising from changes or developments in the economy or financial markets generally, except to the extent such changes or developments have a materially disproportionate impact on the Company and its Subsidiaries, taken as a whole, relative to other participants in the industries in which the Company and its Subsidiaries conduct their businesses; (B) arising from general changes or developments in any industry in which the Company and its Subsidiaries operate, except to the extent such changes or developments have a materially disproportionate impact on the Company and its Subsidiaries, taken as a whole, relative to other participants in such industry; (C) arising from the announcement or pendency of the transactions contemplated by this Agreement; (D) arising from the taking of any action required by this Agreement; (E) arising from changes in any Law or GAAP or interpretation thereof; (F) arising from the failure by the Company to meet any public or other estimates, budgets or forecasts of revenues, earnings or other financial performance or results of operations (it being understood that the facts and circumstances giving rise to such failure may be deemed to constitute, and may be taken into account in determining whether there has been, a Material Adverse Effect); or (G) declines in the price or trading volume of shares of any capital

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stock of the Company or any change, or proposed change in the debt ratings of the Company or any of its Subsidiaries or any debt securities of the Company or any of its Subsidiaries (it being understood that the facts and circumstances giving rise to such declines or changes may be deemed to constitute, and may be taken into account in determining whether there has been, a Material Adverse Effect); or (ii) is materially adverse to the ability of the Company to consummate the transactions contemplated by this Agreement.

 

(m)         “Person” means any individual, corporation, general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, Governmental Entity or other entity of any kind or nature.

 

(n)         “Previously Disclosed” means (i) information set forth in or incorporated in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2016 or its other reports and forms filed with the SEC under Section 13, 14 or 15 of the Exchange Act after July 1, 2015 (except for risks and forward looking information set forth or incorporated in the sections “Risk Factors” or in any forward looking statement disclaimers or similar statements that are similarly non-specific and are predictive or forward looking in nature) and (ii) the information set forth in a letter, dated the date of this Agreement, delivered by the Company to the Investors concurrent with the execution and delivery of this Agreement.

 

(o)         “Pro Rata Portion” means, with respect to each Investor, a percentage equal to (i) the dollar amount set forth adjacent to such Investor’s name in Annex 1, divided by (ii)  $36,600,000; provided that if Investors assume a defaulting Investors obligations as contemplated in Section ‎6.1‎6.1(e), then any Pro Rata Portion calculation shall give effect to such assumed obligations.

 

(p)         “Subsidiary” means any Person (whether or not incorporated) that the Company directly or indirectly owns or in respect of which the Company has the power to vote or Control 50% or more of any class or series of capital shares or other equity interests of such Person.

 

(q)         “Superior Transaction” means a bona fide written Alternative Financing Transaction or Acquisition Transaction that the Board (or a committee thereof consisting only of disinterested directors) has determined in good faith, after receiving the advice of its financial advisors and outside legal counsel and in the exercise of its fiduciary duties, is in the best interests of the Company’s stockholders, including, in the case of an Alternative Financing Transaction, a determination that such Alternative Financing Transaction would (i) provide the Company with liquidity in an amount in excess of that expected to result from the Rights Offering and Backstop Commitment or (ii) result in more favorable economic terms (including in the case of an Alternative Financing Transaction that is an equity investment, the price per share to be paid for the Capital Stock of the Company) for the Company than the Rights Offering and Backstop Commitment. Without limiting the generality of the foregoing, in evaluating whether an Alternative Financing Transaction or Acquisition Transaction is in the best interests of the Company’s stockholders, the Board (or a committee thereof consisting only of disinterested directors) shall take into consideration, among other things, regulatory or other approvals that would be required for such transaction.

 

(r)         “Termination Fee” means $1,098,900.

 

 

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The parties hereto have caused this Agreement to be duly executed as of date first written above.

 

 

 

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Exhibit 10.2

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT, dated as of September 13, 2016 (this “Agreement”), by and among Great Elm Capital Group, Inc., a Delaware corporation (the “Company”), and each person who is named as an Investor in the Backstop Investment Agreement, dated as of the date of this Agreement (the “Backstop Agreement”), by and among the Company and such Investors (each such party as identified on Annex 1, together with any person or entity who hereafter becomes a party to this Agreement per Section 7.11, a “Holder” and collectively, the “Holders”). The Company and the Holders are referred to collectively as the “Parties.”  Certain capitalized terms are defined in Section 7.18.

 

RECITALS

 

The Company has offered to sell and the Investors agreed to purchase shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”), per the Backstop Agreement in a transaction exempt from registration under the Securities Act of 1933 (the “Securities Act”).

 

This Agreement being in full force and effect is a condition to the Investors’ obligations under the Backstop Agreement.

 

AGREEMENT

 

In consideration of the foregoing and mutual covenants herein, the Parties, intending to be legally bound, agree as follows:

 

1.             REGISTRATION

 

1.1             Shelf Registration.

 

(a)            As soon as reasonably practicable after the consummation of the transactions contemplated by the Backstop Agreement (the “Closing Date”) and in any event not later than seventy five days after the Closing Date, the Company shall file a registration statement with the Securities and Exchange Commission (the “SEC”) under the Securities Act and other applicable law, and including any Prospectus, amendments and supplements to each such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement (a “Registration Statement”) for covering the resale of all of the Registrable Securities on a delayed or continuous basis (the “Shelf Registration”). The Company shall use reasonable best efforts to cause such Registration Statement to become effective as promptly as practicable. If the Company becomes eligible to use Form S-3, the Company shall use reasonable best efforts to convert any Shelf Registration on Form S-1 to Form S-3 (the “Form S-3 Shelf”) as soon as practicable after the Company becomes so eligible. The Company shall use its reasonable best efforts to keep the Shelf Registration continuously effective under the Securities Act until there are no longer any Registrable Securities, including, to the extent a Form S-1 was converted to a Form S-3 Shelf and

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the Company thereafter became ineligible to use Form S-3, by filing a Shelf Registration on Form S-1 not later than forty five days after the date of such ineligibility and using its reasonable best efforts to have such Registration Statement declared effective as promptly as practicable (but in no event more than sixty days after the date of such filing, unless it is not practicable to do so due to circumstances directly relating to the review of Registration Statement by the SEC); provided, however , and with respect to Registrable Securities held by any Holder, who together with its Affiliates, beneficially owns less than five percent of the outstanding shares of Common Stock, the Company shall not be obligated to use its reasonable best efforts to keep the Shelf Registration continuously effective under the Securities Act at any time after the second anniversary of the Closing Date;   provided that no Holder owns five percent or more of the then outstanding shares of Common Stock, and before the date the Company becomes a WKSI (the “WKSI Date”). The period during which the Company shall use its reasonable best efforts to keep the Shelf continuously effective under the Securities Act in accordance with this Section, the “Shelf Period”.

 

(b)           At any time during which the Registration Statement for a Shelf Registration (a “Shelf Registration Statement”) or an automatic shelf registration statement as defined in Rule 405 under the Securities Act (an “Automatic Shelf Registration Statement”) is effective (or in connection with its initial effectiveness), any one or more of the eligible Holders of Registrable Securities may request to sell all or any portion of their Registrable Securities in an underwritten offering that is registered pursuant to the Shelf Registration (each, an “Underwritten Shelf Takedown”); provided that in the case of each such Underwritten Shelf Takedown such Holder or Holders will be entitled to make such demand only if the total offering price of the shares to be sold in such offering (including piggyback shares and before deduction of underwriting discounts) is reasonably expected to exceed, in the aggregate, $5 million.

 

(c)            All requests for Underwritten Shelf Takedowns shall be made by giving written notice to the Company (the “Shelf Takedown Notice”). Each Shelf Takedown Notice shall specify the approximate number of Registrable Securities to be sold in the Underwritten Shelf Takedown and the expected price range (net of underwriting discounts and commissions) of such Underwritten Shelf Takedown. Subject to Section 1.5, within three days after receipt of any Shelf Takedown Notice, the Company shall give written notice of such requested Underwritten Shelf Takedown to all other Holders of Registrable Securities (the “Company Notice”) and, subject to the provisions of Section 1.1(d) and Section 1.31.5, shall include in such Underwritten Shelf Takedown all Registrable Securities with respect to which the Company has received written requests for inclusion therein within five Business Days after giving the Company Notice.

 

(d)           If the managing underwriters for such Underwritten Shelf Takedown advise the Company that in their reasonable view, or, if such managing underwriters are unwilling to so advise the Company, if the Company concludes after consultation with such managing underwriters and the Holders of Registrable Securities proposed to be included in such Underwritten Shelf Takedown that in the Company’s reasonable view, the number of shares of Common Stock proposed to be included in such Underwritten Shelf Takedown exceeds the number of shares of Common Stock which can be sold in an orderly manner in such offering within a price range acceptable to the Holders of a

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majority of the Registrable Securities requested to be included in the Underwritten Shelf Takedown, then the Company shall so advise all Holders of Registrable Securities proposed to be included in such Underwritten Shelf Takedown, and shall include in such Underwritten Shelf Takedown the number of shares of Common Stock which can be so sold in the following order of priority: (i) first, the Registrable Securities requested to be included in such Underwritten Shelf Takedown, which in the view of such underwriters or the Company, as applicable, can be sold in an orderly manner within the price range of such offering, pro rata among the respective Holders of such Registrable Securities on the basis of the number of Registrable Securities requested to be included therein by each such Holder, and (ii) second, Other Registrable Securities requested to be included in such Underwritten Shelf Takedown to the extent permitted hereunder, pro rata among the respective holders of such Other Registrable Securities on the basis of the number of securities requested to be included therein by each such holder.

 

(e)           Other than Block Sales, which shall not be classified as an Underwritten Shelf Takedown solely for the purposes of the limitations under this Section 1.1(e), the Company shall not be obligated to effect an Underwritten Shelf Takedown within ninety days (or such shorter period specified in any applicable lockup agreement entered into with underwriters) after the consummation of a previous Underwritten Shelf Takedown or Demand Registration.

 

(f)           The Holders of a majority of the Registrable Securities requested to be included in an Underwritten Shelf Takedown shall have the right to select the investment banker(s) and manager(s) to administer the offering (which shall consist of one or more reputable nationally recognized investment banks, subject to the Company’s approval (which shall not be unreasonably withheld, conditioned or delayed)) and one firm of counsel to represent all of the Holders (along with any reasonably necessary local counsel), in connection with such Underwritten Shelf Takedown; provided, that the Company shall select such investment banker(s), manager(s) and counsel (including local counsel) if such Holders of such majority cannot so agree on the same within a reasonable time period.

 

(g)           Any Holder whose Registrable Securities were to be included in any such registration pursuant to Section 1.1(b) may elect to withdraw any or all of its Registrable Securities therefrom, without prejudice to the rights of any such Holder or Holders to include Registrable Securities in any future registration (or registrations), by written notice to the Company delivered on or prior to the effective date of the relevant Underwritten Shelf Takedown.

 

(h)           Upon the WKSI Date, (i) the Company shall give written notice to all of the Holders who hold Registrable Securities as promptly as practicable but in no event later than ten Business Days thereafter, and such notice shall describe, in reasonable detail, the basis on which the Company has become a WKSI, and (ii) if requested by Holders beneficially owning not less than ten percent of the Registrable Securities held by all Holders, the Company shall, in accordance with the following sentence, register, under an Automatic Shelf Registration Statement, the sale of all outstanding shares of Common Stock in accordance with the terms of this Agreement. Following any such request, the Company shall use its reasonable best efforts to file such Automatic Shelf Registration

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Statement as promptly as practicable, but in no event later than thirty days after such request, and the Company shall use its reasonable best efforts to cause such Automatic Shelf Registration Statement to remain effective thereafter until there are no longer any Registrable Securities; provided , that, the failure of the Company to remain a WKSI after the filing of such Automatic Shelf Registration Statement shall not be deemed to be a breach of its obligations hereunder. The Company shall give written notice of filing such Registration Statement to all of the Holders who hold Registrable Securities as promptly as practicable thereafter.

 

(i)            As of the date hereof, the Company represents and warrants that it is not a party to, or otherwise subject to, any agreement other than this Agreement granting registration rights to any other Person with respect to any securities of the Company.

 

1.2             Demand Registration.

 

(a)            Subject to the terms and conditions of this Agreement (including Section 1.2(c)), at any time on or after the second anniversary of the Closing Date, upon written notice to the Company (a “Demand Notice”) delivered by (i) Holders beneficially owning not less than ten percent of the then outstanding shares of Common Stock in the aggregate or (ii) a Holder that, together with its Affiliates, is both a Ten Percent Holder as of the date of this Agreement and could reasonably be considered an “Affiliate” (disregarding the proviso in the first sentence of the definition thereof) of the Company as of the date of such Demand Notice (an “Affiliated Holder”), which for the avoidance of doubt shall include any Holder with respect to which there is a director serving on the board of directors of the Company (the “Board”) who was appointed by, or is otherwise employed by or affiliated with, such Holder or its Affiliates (each of the foregoing being referred to as the “Initiating Holders”) at any time requesting that the Company effect the registration (a “Demand Registration”) under the Securities Act of any or all of the Registrable Securities held by such Holders, the Company shall promptly (but in any event, not later than five Business Days following the Company’s receipt of such Demand Notice) give written notice of the receipt of such Demand Notice to all other Holders that, to its knowledge, hold Registrable Securities (each, a “Demand Eligible Holder”). The Company shall promptly file the appropriate registration statement (the “Demand Registration Statement”) and use reasonable best efforts to effect, at the earliest practicable date, the registration under the Securities Act and under the applicable state securities laws of (A) the Registrable Securities which the Company has been so requested to register by the Initiating Holders in the Demand Notice, and (B) all other Registrable Securities which the Company has been requested to register by the Demand Eligible Holders by written request (the “Demand Eligible Holder Request”) given to the Company within ten Business Days after the giving of such written notice by the Company, in each case subject to Section 1.2(e), all to the extent required to permit the disposition (in accordance with the intended methods of disposition) of the Registrable Securities to be so registered.

 

(b)           The Company may effect any requested Demand Registration using Form S-3 whenever the Company is eligible to register for resale the Registrable Securities on Form S-3 (unless the Initiating Holder(s) or the managing underwriter(s) of such offering requests the Company to use

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a Form S-1 in order to sell all of the Registrable Securities requested to be sold). Subject to the terms and conditions of this Agreement (including Section 1.2(c)), for so long as the Company is eligible to register for resale the Registrable Securities on Form S-3, each Ten Percent Holder shall have the right to request an unlimited number of Demand Registrations using Form S-3, which shall not constitute a Demand Registration for purposes of determining the number of Demand Registrations limited by Section 1.2(c).

 

(c)            Notwithstanding anything herein to the contrary, the Company shall only be required to (i) effect one Demand Registrations in any 6 month period, (ii) effect a total of not more than four Demand Registrations by (A) Holders beneficially owning not less than 10% of the outstanding shares of the Common Stock in the aggregate and (B) Affiliated Holders, and an additional three Demand Registrations by each Ten Percent Holder throughout the term of this Agreement, and (iii) comply with a request for a Demand Registration (other than a request that the Company conduct an Initial Public Offering) if the Initiating Holders, together with all other Demand Eligible Holders that request Registrable Securities be included in the Demand Registration pursuant to Section 1.2(a), are requesting the registration of Registrable Securities, which is reasonably expected to result in aggregate gross proceeds in excess of $18.3 million.

 

(d)           The Company shall use reasonable best efforts to keep the Demand Registration Statement continuously effective under the Securities Act for the period of time necessary for the underwriters or Holders to sell all the Registrable Securities covered by such Demand Registration Statement or such shorter period which will terminate when all Registrable Securities covered by such Demand Registration Statement have been sold pursuant thereto (including, if necessary, by filing with the SEC a post-effective amendment or a supplement to the Demand Registration Statement or the related Prospectus or any document incorporated therein by reference or by filing any other required document or otherwise supplementing or amending the Demand Registration Statement, if required by the rules, regulations or instructions applicable to the registration form used by the Company for such Demand Registration Statement or by the Securities Act, any state securities or “blue sky” laws, or any other rules and regulations thereunder) (the “Effectiveness Period”). A Demand Registration requested pursuant to this Section shall not be deemed to have been effected (i) if the Registration Statement is withdrawn without becoming effective, (ii) if the Registration Statement does not remain effective in compliance with the provisions of the Securities Act and the laws of any state or other jurisdiction applicable to the disposition of the Registrable Securities covered by such Registration Statement for the Effectiveness Period, (iii) if, after it has become effective, such Registration Statement is subject to any stop order, injunction or other order or requirement of the SEC or other governmental or regulatory agency or court for any reason other than a violation of applicable law solely by any selling Holder and has not thereafter become effective, (iv) in the event of an underwritten offering, if the conditions to closing specified in the underwriting agreement entered into in connection with such registration are not satisfied or waived other than by reason of some wrongful act or omission by an Initiating Holder, (v) if the Company does not include in the applicable Registration Statement any Registrable Securities held by a Holder that is required by the terms hereof to be included in such Registration Statement, and (vi) if the Initiating Holders and Demand Eligible Holders have not been able to sell at least seventy

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five percent of the Registrable Securities that they have requested to sell in the Demand Notice or Demand Eligible Holder Request.

 

(e)           Notwithstanding any other provision of this Section, if (i) the Initiating Holders intend to distribute the Registrable Securities covered by a Demand Registration by means of an underwritten offering and (ii) the managing underwriters advise the Company and the Initiating Holders that in their reasonable view, or, if such managing underwriters are unwilling to so advise the Company and the Initiating Holders, if the Company concludes after consultation with such managing underwriters and the Holders of Registrable Securities proposed to be included in such offering that in the Company’s reasonable view, the number of shares of Common Stock proposed to be included in such offering (including Registrable Securities requested by Holders to be included in such offering and any securities that the Company or any other Person proposes to be included that are not Registrable Securities) exceeds the number of shares of Common Stock which can be sold in an orderly manner in such offering within a price range acceptable to the Holders of a majority of the Registrable Securities requested to be included in such Demand Registration, then the Company shall so advise all Initiating Holders and Demand Eligible Holders with Registrable Securities proposed to be included in such underwritten offering, and shall include in such offering the number of shares of Common Stock which can be so sold in the following order of priority: (A) first, the Registrable Securities requested to be included in such underwritten offering by the Initiating Holders and the Demand Eligible Holders, which in the view of such underwriters or the Company, as applicable, can be sold in an orderly manner within the price range of such offering, pro rata among such Initiating Holders and Demand Eligible Holders on the basis of the number of Registrable Securities requested to be included therein by each such Initiating Holder and Demand Eligible Holder, and (B) second, Other Registrable Securities requested to be included in such underwritten offering to the extent permitted hereunder pro rata among the respective holders of such Other Registrable Securities on the basis of the number of securities requested to be included therein by each such holder.

 

(f)            The determination of whether any offering of Registrable Securities pursuant to a Demand Registration will be an underwritten offering shall be made in the sole discretion of the Holders of a majority of the Registrable Securities included in such underwritten offering, and such Holders of a majority of the Registrable Securities shall have the right to (i) determine the plan of distribution, including the price at which the Registrable Securities are to be sold and the underwriting commissions, discounts and fees, and (ii) select the investment banker(s) and manager(s) to administer the offering (which shall consist of one or more reputable nationally recognized investment banks, subject to the Company’s approval (which shall not be unreasonably withheld, conditioned or delayed)) and one firm of counsel to represent all of the Holders (along with any reasonably necessary local counsel), in connection with such Demand Registration; provided, that the Company shall select such investment banker(s), manager(s) and counsel (including local counsel) if such Holders of such majority cannot so agree on the same within a reasonable time period.

 

(g)           Any Holder whose Registrable Securities were to be included in any such registration pursuant to

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Section 1.2 may elect to withdraw any or all of its Registrable Securities therefrom, without prejudice to the rights of any such Holder or Holders to include Registrable Securities in any future registration (or registrations), by written notice to the Company delivered on or prior to the effective date of the relevant Demand Registration Statement.

 

1.3            Piggyback Registration.

 

(a)           If at any time the Company proposes to file a Registration Statement (a “Piggyback Registration Statement”), other than pursuant to a Shelf Registration under Section 1.1 or any Demand Registration under Section 1.2, for an offering of Common Stock for cash (whether in connection with a public offering of Common Stock by the Company, a public offering of Common Stock by stockholders other than Holders, or both, but excluding an offering relating solely to an employee benefit plan, an offering relating to a transaction on Form S-4 or an offering on any Registration Statement form that does not permit secondary sales), including an Initial Public Offering, the Company shall give written notice (the “Piggyback Notice”) to all Holders that, to its knowledge, hold Registrable Securities (collectively, the “Piggyback Eligible Holders”) of the Company’s intention to file a Piggyback Registration Statement reasonably in advance of (and in any event at least ten Business Days before) the anticipated filing date of such Piggyback Registration Statement. The Piggyback Notice shall offer the Piggyback Eligible Holders the opportunity to include for registration in such Piggyback Registration Statement the number of Registrable Securities as they may request, subject to Section 1.3(b) (a “Piggyback Registration”). Subject to Section 1.3(b), the Company shall use reasonable best efforts to include in each such Piggyback Registration such Registrable Securities for which the Company has received written requests (each, a “Piggyback Request”) from Piggyback Eligible Holders within five Business Days after giving the Piggyback Notice. If a Piggyback Eligible Holder decides not to include all of its Registrable Securities in any Piggyback Registration Statement thereafter filed by the Company, such Piggyback Eligible Holder shall nevertheless continue to have the right to include any Registrable Securities in any subsequent Piggyback Registration Statements or registration statements as may be filed by the Company with respect to offerings of Common Stock, all upon the terms and conditions set forth herein. The Company shall use reasonable best efforts to effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register pursuant to the Piggyback Requests, to the extent required to permit the disposition of the Registrable Securities so requested to be registered.

 

(b)           If the Piggyback Registration under which the Company gives notice pursuant to Section 1.3(a) is an underwritten offering, and the managing underwriter or managing underwriters of such offering advise the Company and the Piggyback Eligible Holders that, in their reasonable view, or, if such managing underwriters are unwilling to so advise the Company and the Piggyback Eligible Holders, if the Company concludes after consultation with such managing underwriters and the Holders of Registrable Securities proposed to be included in such registration that in the Company’s reasonable view, the amount of securities requested to be included in such registration (including Registrable Securities requested by the Piggyback Eligible Holders to be included in such offering and any securities that the Company or any other Person proposes to be included that are not

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Registrable Securities) exceeds the number of shares of Common Stock which can be sold in an orderly manner in such offering within a price range acceptable to the Company, then the Company shall so advise all Piggyback Eligible Holders with Registrable Securities proposed to be included in such Piggyback Registration, and shall include in such offering the number which can be so sold in the following order of priority: (i) in the case of a Company initiated registration, (A) first, the securities that the Company proposes to sell, (B) second, the Registrable Securities requested to be included in such Piggyback Registration pro rata among the Piggyback Eligible Holders on the basis of the number of Registrable Securities requested to be included therein by each Piggyback Eligible Holder and (C), third, Other Registrable Securities requested to be included in such Piggyback Registration, pro rata among the holders thereof on the basis of the number of securities requested to be included therein by each such holder and (ii) in the case of a non-Company initiated registration, (A) first, the securities requested to be included in such offering by the holders of the Company’s securities initiating such registration and the Piggyback Eligible Holders, pro rata among such holders on the basis of the number of securities requested to be included therein by each such holder, and (B) second, Other Registrable Securities requested to be included in such offering to the extent permitted hereunder pro rata among the respective holders of such Other Registrable Securities on the basis of the number of securities requested to be included therein by each such holder. Promptly (and in any event within one Business Day) following receipt of notification by the Company from the managing underwriter of a range of prices at which such Registrable Securities are likely to be sold, the Company shall so advise each Piggyback Eligible Holder requesting registration in such offering of such price. If any Piggyback Eligible Holder disapproves of the terms of any such underwriting (including the price offered by the underwriter(s) in such offering), such Piggyback Eligible Holder may elect to withdraw any or all of its Registrable Securities therefrom, without prejudice to the rights of any such Holder or Holders to include Registrable Securities in any future Piggyback Registration or other registration statement, by written notice to the Company and the managing underwriters delivered on or prior to the effective date of such Piggyback Registration Statement. Any Registrable Securities withdrawn from such underwriting shall be excluded and withdrawn from the registration. For any Piggyback Eligible Holder that is a partnership, limited liability company, corporation or other entity, the partners, members, stockholders, subsidiaries, parents and Affiliates of such Piggyback Eligible Holder, or the estates and Family Members of any such partners/members and retired partners/members and any trusts for the benefit of any of the foregoing Persons, shall be deemed to be a single “Piggyback Eligible Holder,” and any pro rata reduction with respect to such “Piggyback Eligible Holder” shall be based upon the aggregate amount of securities carrying registration rights owned by all entities and individuals included in such “Piggyback Eligible Holder,” as defined in this sentence.

 

(c)           The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 1.3 prior to the effective date of such Registration Statement, whether or not any Piggyback Eligible Holder has elected to include Registrable Securities in such Registration Statement, without prejudice, however, to the right of the Holders immediately to request that such registration be effected as a registration under Section 1.2 to the extent permitted thereunder and subject to the terms set forth therein.

 

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(d)           If a Piggyback Registration pursuant to this Section 1.3 involves an underwritten offering, the Company shall have the right, in consultation with the Holders of a majority of the Registrable Securities included in such underwritten offering, to (i) determine the plan of distribution, including the price at which the Registrable Securities are to be sold and the underwriting commissions, discounts and fees and (ii) select the investment banker or bankers and managers to administer the offering, including the lead managing underwriter.

 

(e)           No registration effected under this Section 1.3 shall relieve the Company of its obligations to effect any registration of the sale of Registrable Securities upon request under Section 1.1 or Section 1.2 hereof and no registration effected pursuant to this Section shall be deemed to have been effected pursuant to Section 1.2 or Section 1.2.  

 

1.4            Notice Requirements. Any Demand Notice, Demand Eligible Holder Request, Piggyback Request or Shelf Takedown Notice shall (a) specify the number or class of Registrable Securities and, if applicable, other shares of Common Stock, intended to be offered and sold by the Holder making the request, (b) express such Holder’s bona fide intent to offer such Registrable Securities for distribution, (c) describe the nature or method of the proposed offer and sale of Registrable Securities (to the extent applicable), and (d) contain the undertaking of such Holder to provide all such information and materials and take all action as may reasonably be required in order to permit the Company to comply with all applicable requirements in connection with the registration of such Registrable Securities.

 

1.5            Suspension Right. Notwithstanding any other provision of this Article 1, the Company shall have the right but not the obligation to defer the filing of, or suspend the use by the Holders of, any Demand Registration or Shelf Registration for a period of up to sixty days if (a) the Board determines, in its good faith judgment, that the disclosure that would otherwise be required to file or update such Registration Statement would cause the disclosure of material non-public information in a manner that would materially and adversely interfere with any pending material financing or material acquisition, merger, recapitalization, consolidation or reorganization or similar transaction involving the Company; (b) if the Company is subject to any of its customary suspension or blackout periods, for all or part of such period; (c) upon issuance by the SEC of a stop order suspending the effectiveness of any registration statement with respect to Registrable Securities or the initiation of proceedings with respect to such registration statement under Section 8(d) or 8(e) of the Securities Act; (d) if the Company believes that any such registration or offering (i) should not be undertaken because it would reasonably be expected to materially interfere with any material corporate development or plan or (ii) would require the Company, under applicable securities laws and other laws, to make disclosure of material nonpublic information that would not otherwise be required to be disclosed at that time and the Company believes in good faith that such disclosures at that time would not be in the Company’s best interests; provided that this exception (ii) shall continue to apply only during the time that such material nonpublic information has not been disclosed and remains material; (e) if the Company elects at such time to offer Common Stock or other equity securities of the Company to (i) fund a merger, third-party tender

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offer or other business combination, acquisition of assets or similar transaction or (ii) meet rating agency and other capital funding requirements; (f) if the Company is pursuing a primary underwritten offering of Common Stock pursuant to a registration statement; provided that the Investor shall have Piggyback Registration rights with respect to such primary underwritten offering in accordance with and subject to the restrictions in Section 1.3; or (g) if any other material development would materially and adversely interfere with any such Demand Registration or Shelf Registration (any such period, a “Suspension Period”); provided, however , that in such event, the Initiating Holders will be entitled to withdraw any request for a Demand Registration and, if such request is withdrawn, such Demand Registration will not count as a Demand Registration. 

 

1.6            Selling Stockholder Information. The Company may require each Holder of Registrable Securities as to which any Registration Statement is being filed or sale is being effected to furnish to the Company such information regarding the distribution of such securities and such other information relating to such Holder and its ownership of Registrable Securities as the Company may from time to time reasonably request in writing (provided that such information shall be used only in connection with such registration) and the Company may exclude from such registration or sale the Registrable Securities of any such Holder who fails to furnish such information within a reasonable time after receiving such request. Each Holder agrees to furnish such information to the Company and to cooperate with the Company as reasonably necessary to enable the Company to comply with the provisions of this Agreement. The Company, in connection with any action taken under this Agreement, may, in good faith, reasonably request in writing from any Holder the number of Registrable Securities held by such Holder, and any Holder receiving such a written request shall provide the duly requested information to the Company as promptly as is reasonably practicable.

 

1.7            No Conflicting Agreements. The Company has not entered into and, unless agreed in writing by Holders of at least 50.1% of the Registrable Securities will not enter into, any agreement that (i) is inconsistent with the rights granted to the Holders with respect to Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof in any material respect or (ii) other than as set forth in this Agreement, would allow any holder of Common Stock to include Common Stock in any Registration Statement filed by the Company on a basis that is more favorable in any material respect to the rights granted to the Holders hereunder. 

 

1.8            Duration of Registration Rights. All registration rights granted under this Article 1 shall continue to be applicable with respect to any Holder until such Holder no longer holds any Registrable Securities. Notwithstanding anything to the contrary contained herein, (a) no Holder shall be entitled to any piggyback right or to participate as a Demand Eligible Holder under this Article 1 in the event of a Block Sale (including Block Sales off of a Shelf or an Automatic Shelf Registration Statement, or in connection with the registration of Registrable Securities under an Automatic Shelf Registration Statement for purposes of effectuating a Block Sale; provided , that, any registration with respect to a Block Sale shall not constitute a Demand Registration for purposes of determining the number of Demand Registrations effected by the Company under Section 1.2) except as set forth in the following clause (b),  (b) no Holder, other than an Affiliated Holder, shall be permitted

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to request or participate in an underwritten offering (including an Underwritten Shelf Takedown) that is a Block Sale and (c) an Affiliated Holder effecting an underwritten offering (including an Underwritten Shelf Takedown) that is a Block Sale shall provide prompt notice (but in no event later than twenty-four hours prior to such Block Sale) to the Company and any other Affiliated Holder setting forth the proposed timeline for such offering to permit participation by such other Affiliated Holder in such offering, and such other Affiliated Holder shall be entitled to participate in such offering so long as such participation of such other Affiliated Holder does not materially delay the proposed timeline of such Block Sale specified in the notice.

 

2.             REGISTRATION PROCEDURES .   The procedures to be followed by the Company and each participating Holder to register the sale of Registrable Securities pursuant to a Registration Statement in accordance with this Agreement, and the respective rights and obligations of the Company and such Holders with respect to the preparation, filing and effectiveness of such Registration Statement, are as follows:

 

2.1            Registration Statement. The Company will (a) prepare and file a Registration Statement or a prospectus supplement, as applicable, with the SEC (within the time period specified in Section 1.1 or Section 1.2), as applicable, in the case of a Shelf Registration, an Underwritten Shelf Takedown or a Demand Registration) which Registration Statement (i) shall be on a form selected by the Company for which the Company qualifies, (ii) shall be available for the sale or exchange of the Registrable Securities in accordance with the intended method or methods of distribution, in the case of a Demand Registration Statement, a Shelf or an Underwritten Shelf Takedown, and (iii) shall comply as to form in all material respects with the requirements of the applicable form and include and/or incorporate by reference all financial statements required by the SEC to be filed therewith, (b) use its reasonable best efforts to cause such Registration Statement to become effective and remain effective for the periods provided under Section 1.1 or Section 1.2, as applicable, in the case of a Shelf Registration Statement or a Demand Registration Statement, (c) use its reasonable best efforts to prevent the occurrence of any event that would cause a Registration Statement to contain a material misstatement or omission or to be not effective and usable for resale of the Registrable Securities registered pursuant thereto (during the period that such Registration Statement is required to be effective as provided under Section 1.1 or Section 1.2), and (d) cause each Registration Statement and the related Prospectus and any amendment or supplement thereto, as of the effective date of such Registration Statement, amendment or supplement (i) to comply in all material respects with any requirements of the Securities Act and the rules and regulations of the SEC and (ii) not to 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. The Company will:  (A) at least five Business Days prior to the anticipated filing of a Registration Statement or any related Prospectus or any amendment or supplement thereto furnish to such Holders and the managing underwriter or underwriters of an underwritten offering of Registrable Securities, if applicable, copies of all such documents proposed to be filed, (B) use its reasonable best efforts to address in each such document prior to being so filed with the SEC such comments as such Holder or underwriter reasonably shall propose within three Business Days of receipt of such copies by the Holders and (C) not file any Registration Statement or any related Prospectus or

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any amendment or supplement thereto to which a participating Holder reasonably objects.

 

2.2            Amendments.  The Company will use its reasonable best efforts to as promptly as reasonably practicable (a) prepare and file with the SEC such amendments, including post-effective amendments, and supplements to each Registration Statement and the Prospectus used in connection therewith as (i) may be reasonably requested by any Holder of Registrable Securities covered by such Registration Statement necessary to permit such Holder to sell in accordance with its intended method of distribution or (ii) may be necessary under applicable law to keep such Registration Statement continuously effective with respect to the disposition of all Registrable Securities covered thereby for the periods provided under Section 1.1 or Section 1.2, as applicable, in accordance with the intended method of distribution and, subject to the limitations contained in this Agreement, prepare and file with the SEC such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities held by the Holders, (ii) cause the related Prospectus to be amended or supplemented by any required prospectus supplement, and as so supplemented or amended, to be filed pursuant to Rule 424, (c) respond to any comments received from the SEC with respect to each Registration Statement or Prospectus or any amendment thereto, and (d) as promptly as reasonably practicable, provide such Holders true and complete copies of all correspondence from and to the SEC relating to such Registration Statement or Prospectus other than any comments that the Company determines in good faith would result in the disclosure to such Holders of material and non-public information concerning the Company that is not already in the possession of such Holder.

 

2.3            Compliance With Law. The Company will comply in all material respects with the provisions of the Securities Act and the Exchange Act (including Regulation M under the Exchange Act) with respect to each Registration Statement and the disposition of all Registrable Securities covered by each Registration Statement.

 

2.4            Required Communication. The Company will notify such Holders that, to its knowledge, hold Registrable Securities and the managing underwriter or underwriters of an underwritten offering of Registrable Securities, if applicable, as promptly as reasonably practicable: (a)(i) when a Registration Statement, any pre-effective amendment, any Prospectus or any prospectus supplement or post-effective amendment to a Registration Statement or any free writing prospectus is proposed to be filed; (ii) when the SEC notifies the Company whether there will be a “review” of such Registration Statement and whenever the SEC comments on such Registration Statement (in which case the Company shall provide true and complete copies thereof and all written responses thereto to each Holder and underwriter, if applicable, other than information which the Company determines in good faith would constitute material and non-public information that is not already in the possession of such Holder); and (iii) with respect to each Registration Statement or any post-effective amendment thereto, when the same has been declared effective; (b) of any request by the SEC or any other federal or state governmental or regulatory authority for amendments or supplements to a Registration Statement or Prospectus or for additional information (whether before or after the effective date of the Registration Statement) or any other correspondence with the SEC or any such authority relating to, or which may affect, the Registration Statement; (c) of

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the issuance by the SEC or any other governmental or regulatory authority of any stop order, injunction or other order or requirement suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (d) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; (e) if, at any time, the representations and warranties of the Company in any applicable underwriting agreement or similar agreement cease to be true and correct in all material respects; or (f) of the occurrence of any event that makes any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or if, as a result of such event or the passage of time, such Registration Statement, Prospectus or other documents requires revisions so that, in the case of such Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading, or when any Issuer Free Writing Prospectus includes information that may conflict with the information contained in the Registration Statement or Prospectus, or if, for any other reason, it shall be necessary during such time period to amend or supplement such Registration Statement or Prospectus in order to comply with the Securities Act, which shall correct such misstatement or omission or effect such compliance.

 

2.5            Government Consents. The Company will use its reasonable best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (a) any stop order or other order suspending the effectiveness of a Registration Statement or the use of any Prospectus, or (b) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment, or if any such order or suspension is made effective during any Suspension Period, at the earliest practicable moment after the Suspension Period is over.

 

2.6            Documents. During the Effectiveness Period or the Shelf Period, as applicable, the Company will furnish to each Holder and the managing underwriter or underwriters of an underwritten offering of Registrable Securities, if applicable, upon their request, without charge, at least one conformed copy of each Registration Statement and each amendment thereto and all exhibits to the extent requested by such Holder or underwriter (including those incorporated by reference) promptly after the filing of such documents with the SEC.

 

2.7            Documents to Underwriters. The Company will promptly deliver to each Holder and the managing underwriter or underwriters of an underwritten offering of Registrable Securities, if applicable, without charge, as many copies of each Prospectus or Prospectuses (including each form of prospectus) and each amendment or supplement thereto as such Holder or underwriter may reasonably request in order to facilitate the disposition of the Registrable Securities by such Holder or underwriter. The Company consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders and any applicable underwriter in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any

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amendment or supplement thereto.

 

2.8            Blue Sky. The Company will use its reasonable best efforts to (a) register or qualify the Registrable Securities covered by a Registration Statement, no later than the time such Registration Statement is declared effective by the SEC, under all applicable securities laws (including the “blue sky” laws) of such jurisdictions each underwriter, if any, or any Holder shall reasonably request; (b) keep each such registration or qualification effective during the period such Registration Statement is required to be kept effective under the terms of this Agreement and (c) do any and all other acts and things which may be reasonably necessary or advisable to enable such underwriter, if any, and each Holder to consummate the disposition in each such jurisdictions of the Registrable Securities covered by such Registration Statement; provided, however , 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) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process (other than service of process in connection with such registration or qualification or any sale of Registrable Securities in connection therewith) in any such jurisdiction.

 

2.9            Certificates. If the use of uncertificated shares of Common Stock is not permitted by applicable law or listing rule, the Company will cooperate with each Holder and the underwriter or managing underwriter of an underwritten offering of Registrable Securities, if applicable, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free of all restrictive legends indicating that the Registrable Securities are unregistered or unqualified for resale under the Securities Act, Exchange Act or other applicable securities laws, and to enable such Registrable Securities to be in such denominations and registered in such names as each Holder or the underwriter or managing underwriter of an underwritten offering of Registrable Securities, if any, may request in writing. In connection therewith, if required by the Company’s transfer agent, the Company will promptly, after the effective date of the Registration Statement, cause an opinion of counsel as to the effectiveness of the Registration Statement to be delivered to and maintained with such transfer agent, together with any other authorizations, certificates and directions required by the transfer agent which authorize and direct the transfer agent to issue such Registrable Securities without book-entry restriction or any such legend upon sale by the Holder or the underwriter or managing underwriter of an underwritten offering of Registrable Securities, if any, of such Registrable Securities under the Registration Statement.

 

2.10        Subsequent Events. Upon the occurrence of any event contemplated by clause (d) of Section 2.4, as promptly as reasonably practicable, the Company will prepare a supplement or amendment, including a post-effective amendment, if required by applicable law, to the affected Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference or to the applicable Issuer Free Writing Prospectus, and file any other required document so that, as thereafter delivered, no Registration Statement nor any Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus, in light of the circumstances under which they were made) not misleading and no

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Issuer Free Writing Prospectus will include information that conflicts with information contained in the Registration Statement or Prospectus and such that each selling Holder can resume disposition of such Registrable Securities covered by such Registration Statement or Prospectus.

 

2.11        Distribution. Such Holders may distribute the Registrable Securities by means of an underwritten offering;   provided that (a) such Holders provide to the Company a Shelf Takedown Notice or Demand Notice of their intention to distribute Registrable Securities by means of an underwritten offering, (b) the right of any Holder to include such Holder’s 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 to the extent provided herein, (c) each Holder participating in such underwritten offering agrees to enter into an underwriting agreement in customary form and sell such Holder’s Registrable Securities on the basis provided in any underwriting arrangements approved by the Holders entitled to select the managing underwriter or managing underwriters hereunder ( provided that any such Holder shall not be required to make any representations or warranties to or agreements with the Company or the underwriters other than representations, warranties, agreements and indemnities regarding such Holder, such Holder’s title to the Registrable Securities, such Holder’s intended method of distribution, the accuracy of information concerning such Holder as provided by or on behalf of such Holder, and any other representations required to be made by the Holder under applicable law, and the aggregate amount of the liability of such Holder in connection with such offering shall not exceed such Holder’s net proceeds from the disposition of such Holder’s Registrable Securities in such offering) and (d) each Holder participating in such underwritten offering completes and executes all questionnaires, powers of attorney, custody agreements and other documents reasonably required under the terms of such underwriting arrangements. The Company agrees with each Holder that, in connection with any underwritten offering in accordance with the terms hereof, it will negotiate in good faith and execute all indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements, and will procure auditor “comfort” letters addressed to the underwriters in the offering from the Company’s independent certified public accountants or independent auditors (and, if necessary, any other independent certified public accountants or independent auditors of any subsidiary of the Company or any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement) in customary form and covering such matters of the type customarily covered by comfort letters as the underwriters reasonably request, dated the date of execution of the underwriting agreement and brought down to the closing under the underwriting agreement.

 

2.12        Opinion of Counsel.  The Company will obtain for delivery to the underwriter or underwriters of an underwritten offering of Registrable Securities, an opinion or opinions from counsel for the Company (including any local counsel reasonably requested by the underwriters) dated the most recent effective date of the Registration Statement or, in the event of an underwritten offering, the date of the closing under the underwriting agreement, in customary form, scope and substance, covering the matters customarily covered in opinions requested in sales of securities or underwritten offerings, which opinions shall be reasonably satisfactory to such underwriters and

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its counsel.

 

2.13        Due Diligence. For a reasonable period prior to the filing of any Registration Statement and throughout the Effectiveness Period or the Shelf Period, as applicable, the Company will make available upon reasonable notice at the Company’s principal place of business or such other reasonable place for inspection by a representative appointed by a majority of the Holders covered by the applicable Registration Statement, by any managing underwriter or managing underwriters selected in accordance with this Agreement and by any attorney, accountant or other agent retained by such Holders or underwriter, such financial and other information and books and records of the Company, and cause the officers, employees, counsel and independent certified public accountants of the Company to respond to such inquiries, as shall be reasonably necessary (and in the case of counsel, not violate an attorney-client privilege in such counsel’s reasonable belief) to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act.

 

2.14        Share Transfer. The Company will (a) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable Registration Statement from and after a date not later than the effective date of such Registration Statement and provide and enter into any reasonable agreements with a custodian for the Registrable Securities and (b) not later than the effective date of the applicable Registration Statement, provide a CUSIP number for all Registrable Securities.

 

2.15         FINRA. The Company will cooperate with each Holder of Registrable Securities and each underwriter or agent participating in the disposition of Registrable Securities and their respective counsel in connection with any filings required to be made with FINRA and in performance of any due diligence investigations by any underwriter.

 

2.16        Post-Offering. The Company will use its reasonable best efforts to comply with all applicable rules and regulations of the SEC, any securities exchange on which the Company’s securities are listed, FINRA and any state securities authority, and make available to each Holder, as soon as reasonably practicable after the effective date of the Registration Statement, an earnings statement covering at least twelve months which shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158.

 

2.17        Free Writing Prospectus. The Company will use its reasonable best efforts to ensure that any Issuer Free Writing Prospectus utilized in connection with any Prospectus complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related Prospectus, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

2.18        Road Show. In connection with any registration of Registrable Securities pursuant to this

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Agreement, the Company will use its reasonable best efforts to expedite or facilitate the disposition of Registrable Securities by such Holders, including using reasonable best efforts to cause appropriate officers and employees to be available, on a customary basis and upon reasonable advance notice, to meet with prospective investors in presentations, meetings and road shows but not in connection with more than two offerings in any twelve months.

 

2.19        Listing.  The Company will use its reasonable best efforts to maintain listing of the Common Stock on the Trading Market until each Holder has sold all of its Registrable Securities.

 

3.           REGISTRATION EXPENSES .   The Company shall bear all reasonable Registration Expenses in connection with any Demand Registration, Shelf Registration, Shelf Takedown Notice or Piggyback Registration (excluding any Selling Expenses), whether or not any Registrable Securities are sold pursuant to a Registration Statement. “Registration Expenses” shall include:    (a) all registration, qualification and filing fees and expenses (including fees and expenses (i) of the SEC or FINRA, (ii) incurred in connection with the listing of the Registrable Securities on the Trading Market, and (iii) in compliance with applicable state securities or “Blue Sky” laws (including reasonable documented fees and disbursements of counsel for the underwriters in connection with blue sky qualifications of the Registrable Securities)); (b) printing expenses (including expenses of printing certificates for the Company’s shares and of printing prospectuses); (c) road show expenses of the Company and the underwriters, if any; (d) messenger, telephone and delivery expenses; (e) reasonable documented fees and disbursements of counsel (including any local counsel), auditors and accountants for the Company (including the expenses incurred in connection with “comfort letters” required by or incident to such performance and compliance); (f) the reasonable documented fees and disbursements of underwriters to the extent customarily paid by issuers or sellers of securities (including, if applicable, the fees and expenses of any “qualified independent underwriter” (and its counsel) that is required to be retained in accordance with the rules and regulations of FINRA; (h) fees and expenses of any special experts retained by the Company; (g) Securities Act liability insurance, if the Company so desires such insurance and (i) reasonable documented fees and disbursements of one counsel (along with any reasonably necessary local counsel) representing all Holders mutually agreed by Holders of a majority of the Registrable Securities participating in the related registration. In addition, the Company shall be responsible for all of its expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including expenses payable to third parties and including all salaries and expenses of the Company’s officers and employees performing legal or accounting duties), the expense of any annual audit, the expense of any liability insurance it determines to obtain and any underwriting fees, discounts, selling commissions and stock transfer taxes and related legal and other fees applicable to securities sold by the Company and in respect of which proceeds are received by the Company. Each Holder shall pay any Selling Expenses applicable to the sale or disposition of such Holder’s Registrable Securities pursuant to any Demand Registration Statement or Piggyback Registration Statement, or pursuant to any Shelf under which such selling Holder’s Registrable Shares were sold, in proportion to the amount of such selling Holder’s shares of Registrable Securities sold in any offering under such Demand Registration Statement, Piggyback Registration Statement or Shelf. Notwithstanding anything to the contrary contained herein, the

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Company shall have no obligation to pay any underwriting discounts or selling commissions attributable to the Registrable Securities being sold by the Holders, which underwriting discounts or selling commissions shall be borne by the selling Holders, pro rata in proportion to the respective amount of Registrable Securities each is selling in such offering.

 

4.            INDEMNIFICATION .

 

4.1            Company Obligations. If requested by a participating Holder, the Company shall indemnify and hold harmless each underwriter, if any, engaged in connection with any registration referred to in Article 1 and provide representations, covenants, opinions and other assurances to such underwriter in form and substance reasonably satisfactory to such underwriter and the Company. Further, the Company shall indemnify and hold harmless each Holder, its Affiliates and each of their respective officers and directors and any Person who controls any such Holder (within the meaning of the Securities Act) and any agent thereof (collectively, “Indemnified Persons”), to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, joint or several, costs (including reasonable costs of preparation and reasonable attorneys’ fees) and expenses, judgments, fines, penalties, interest, settlements or other amounts, in each case to the extent, but only to the extent, arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which any Indemnified Person may be involved, or is threatened to be involved, as a party or otherwise, under the Securities Act or otherwise (collectively, “Losses”), as incurred, arising out of, based upon, resulting from or relating to (a) any untrue or alleged untrue statement of a material fact contained in any Registration Statement under which any Registrable Securities were registered, Prospectus (including in any preliminary prospectus (if used prior to the effective date of such Registration Statement)), or in any summary or final prospectus or free writing prospectus or in any amendment or supplement thereto or in any documents incorporated by reference in any of the foregoing, (b) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein (in the case of a Prospectus or preliminary Prospectus, in light of the circumstances under which they were made), not misleading or (c) any violation or alleged violation by the Company or any of its subsidiaries of any federal, state or common law rule or regulation relating to action or inaction in connection with any such registration, disclosure document or related document or report, and the Company will reimburse such Indemnified Person for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, liability, action or proceeding; provided, however, that the Company shall not be liable to any Indemnified Person to the extent that any such Losses arise out of, are based upon or results from an untrue or alleged untrue statement or omission or alleged omission made in such Registration Statement, such preliminary, summary or final prospectus or free writing prospectus or such amendment or supplement, in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Indemnified Person specifically for use in the preparation thereof.

 

4.2            Holders’ Obligations. In connection with any Registration Statement filed by the Company pursuant to Section 2 hereof in which a Holder has registered for sale its Registrable Securities, each

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such selling Holder agrees (severally and not jointly) to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors and officers and each Person who controls the Company (within the meaning of the Securities Act or the Exchange Act) from and against any Losses resulting from (a) any untrue statement of a material fact in any Registration Statement under which such Registrable Securities were registered or sold under the Securities Act (including any final, preliminary or summary Prospectus contained therein or any amendment thereof or supplement thereto or any documents incorporated by reference therein) or (b) any omission to state therein a material fact required to be stated therein or necessary to make the statements therein (in the case of a Prospectus or preliminary Prospectus, in light of the circumstances under which they were made) not misleading, in each case to the extent, but only to the extent, that such untrue statement or omission is contained in any information furnished in writing by or on behalf of such selling Holder to the Company specifically for inclusion in such Registration Statement or Prospectus. In no event shall the liability of any selling Holder hereunder be greater in amount than the dollar amount of the net proceeds received by such Holder under the sale of Registrable Securities giving rise to such indemnification obligation less any amounts paid by such Holder pursuant to Section 4.4 and any amounts paid by such Holder as a result of liabilities incurred under the underwriting agreement, if any, related to such sale.

 

4.3            Indemnification Procedures. Any indemnified person shall (a) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification; provided that any delay or failure to so notify the indemnifying party shall not relieve the indemnifying party of its obligations hereunder except to the extent, if at all, that it is actually and materially prejudiced by reason of such delay or failure) and (b) permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party; provided, however, that any indemnified person shall have the right to select and employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such indemnified person unless (i) the indemnifying party has agreed in writing to pay such fees or expenses, (ii) the indemnifying party shall have failed to assume the defense of such claim within a reasonable time after receipt of notice of such claim from the indemnified person and employ counsel reasonably satisfactory to such indemnified person, (iii) the indemnified party has reasonably concluded (based upon advice of its counsel) that there may be legal defenses available to it or other indemnified persons that are different from or in addition to those available to the indemnifying party, or (iv) in the reasonable judgment of any such indemnified person (based upon advice of its counsel) a conflict of interest may exist between such indemnified person and the indemnifying party with respect to such claims (in which case, if the indemnified person notifies the indemnifying party in writing that such indemnified person elects to employ separate counsel at the expense of the indemnifying party, the indemnifying party shall not have the right to assume the defense of such claim on behalf of such indemnified person). If the indemnifying party assumes the defense, the indemnifying party shall not have the right to settle such action without the consent of the indemnified person. If such defense is not assumed by the indemnifying party, the indemnifying party will not be subject to any liability for any settlement made without its prior written consent, but such consent may not be unreasonably delayed, withheld or conditioned. It is understood that the indemnifying party or parties shall not, except as specifically set forth in this

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Section 4.3, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements or other charges of more than one separate firm admitted to practice in such jurisdiction at any one time.

 

4.4            Contribution. If for any reason the indemnification provided for in Section 4.1 and Section 4.2 is unavailable to an indemnified person (other than as a result of exceptions contained in Section 4.1 and Section 4.2) or insufficient in respect of any Losses referred to therein, then the indemnifying party shall contribute to the amount paid or payable by the indemnified person as a result of such Losses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified person or Persons on the other hand in connection with the acts, statements or omissions that resulted in such Losses, as well as any other relevant equitable considerations. In connection with any Registration Statement filed with the SEC by the Company, the relative fault of the indemnifying party on the one hand and the indemnified person on the other hand shall be determined by reference to, among other things, whether any untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified person and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just or equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take account of the equitable considerations referred to in this Section 4.4. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. The amount paid or payable by an indemnified person as a result of the Losses referred to in Section 4.1 and Section 4.2 shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 4.4, in connection with any Registration Statement filed by the Company, a selling Holder shall not be required to contribute any amount in excess of the dollar amount of the net proceeds received by such Holder from the sale of Registrable Securities giving rise to such contribution obligation less any amounts paid by such Holder pursuant to Section 4.2 and any amounts paid by such Holder as a result of liabilities incurred under the underwriting agreement, if any, related to such sale. If indemnification is available under this Article 4, the indemnifying parties shall indemnify each indemnified person to the full extent provided in Section 4.1 and Section 4.2 without regard to the provisions of this Section 4.4. The remedies provided for in this Article 4 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

 

5.             FACILITATION OF RULE 144 SALES .  The Company shall (a) to the extent it shall be required to do so under the Exchange Act, use its reasonable best efforts to timely file the reports required to be filed by it under the Exchange Act or the Securities Act and the rules adopted by the SEC thereunder (including the reports under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144), and (b) take such further action as any Holder may reasonably request and make available information necessary to comply with Rule 144 and Rule 144A, all to the extent

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required from time to time to enable the Holders to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144 and 144A. Upon the written request of any Holder in connection with that Holder’s sale pursuant to Rule 144 or Rule 144A, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements.

 

6.             COMPANY UNDERTAKINGS.   In furtherance of the registration provisions set forth herein intended to facilitate the sale of shares of Common Stock by the Holders, the Company shall furnish to each Holder (a) within ninety days of the end of each fiscal year (or such longer period as may be permitted by Rule 12b-25 of the Exchange Act), annual audited financial statements for such fiscal year and (b) within forty five days of the end of each of the first three fiscal quarters of every fiscal year (or such longer period as may be permitted by Rule 12b-25 of the Exchange Act), unaudited financial statements for the interim period as of, and for the period ending on, the end of such fiscal quarter, in each case to be prepared on a basis substantially consistent with then applicable SEC requirements. Notwithstanding the foregoing, the Company will be deemed to have furnished such reports referred to above to the Holders if the Company has filed such reports with the SEC via the EDGAR filing system and such reports are publicly available

 

7.              MISCELLANEOUS

 

7.1            Discontinued Disposition. Each Holder agrees by its acquisition of Registrable Securities that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in clauses (ii) through (iv) and (vi) of Section 2.4 or the occurrence of a Suspension Period, such Holder will forthwith discontinue disposition of such Registrable Securities under the Registration Statement until such Holder’s receipt of the copies of the supplemental Prospectus or amended Registration Statement or until it is advised in writing by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this Section 7.1. If the Company shall give any such notice, the period during which the applicable Registration Statement is required to be maintained effective shall be extended by the number of days during the period from and including the date of the giving of such notice to and including the date when each seller of Registrable Securities covered by such Registration Statement either receives the copies of the supplemented or amended Prospectus or is advised in writing by the Company that the use of the Prospectus may be resumed.

 

7.2           Market Stand-Off Agreement.

 

(a)            In connection with an underwritten offering of Common Stock, if requested by the managing underwriter for such offering, each Holder of ten percent or more (or such lower threshold requested by any underwriter, placement agent, dealer manager or other counterparty) of the Common Stock then outstanding (the “Lock-Up Party”), hereby agrees to enter into a lock-up agreement (a “Stand-Off Agreement”) containing customary restrictions on transfers of equity

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securities of the Company held by such Holder (other than those included in such offering) for a period specified by the managing underwriter beginning ten days prior to the execution of the related underwriting agreement and not to exceed one hundred eighty days following the closing date of the offering of equity securities of the Company (the “Stand-Off Period”) including such additional days as may then be market custom to allow the publication of research; provided that all executive officers and directors of the Company and holders holding Company’s voting securities in an amount equal to or greater than the amount held by the Lock-Up Parties shall enter into agreements containing substantially similar or no more favorable terms and only if such Persons remain subject thereto (and are not released from such agreement) for such Stand-Off Period.

 

(b)            Notwithstanding anything to the contrary in Section 7.2(a), in connection with an underwritten offering (including an Underwritten Shelf Takedown) that is a Block Sale, (i) no Holder shall be a Lock-Up Party other than, if requested by the managing underwriter for such offering, an Affiliated Holder that is (A) participating in such Block Sale or (B) a Holder of five percent or more of the Common Stock then outstanding and (ii) the Stand-Off Period shall not exceed sixty days in connection with any Block Sale.

 

(c)            Notwithstanding anything to the contrary set forth in Section 7.2(a), no Affiliated Holder shall be required to be a Lock-Up Party in connection with an underwritten offering (including an Underwritten Shelf Takedown) that is a Block Sale in which such Affiliated Holder does not participate (a “Skipped Block Sale”) if, during the preceding twelve month period, such Affiliated Holder has been a Lock-Up Party in connection with Skipped Block Sales either (A) twice or (B) for at least an aggregate of ninety days.

 

(d)            Any discretionary waiver or termination of the Stand-Off Period by the Company or the managing underwriter shall apply to all persons subject to the Stand-Off Agreement on a pro rata basis. Each Holder agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter that are consistent with the foregoing or which are necessary to give further effect thereto. The obligations described in this Section 7.2(d) shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to Common Stock (or other securities) subject to the foregoing restriction until the end of the Stand-Off Period. Notwithstanding anything to the contrary set forth in this Agreement, nothing herein shall prevent: (i) any Holder from participating in such offering, if otherwise permitted pursuant to this Agreement; (ii) any Holder that is a partnership, limited liability company or corporation from (A) making a distribution of shares of Common Stock to the partners, members or stockholders thereof or (B) transferring shares of Common Stock to an Affiliate of such Holder; (iii) any Holder who is an individual from transferring shares of Common Stock to a Family Member; or (iv) any Holder from transferring shares to a nominee or custodian of an entity or individual to whom a transfer would be permitted under this paragraph; provided that, in the case of clauses (ii) and (iii), such transfer is otherwise in compliance with applicable

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securities laws and; provided, further , that, (x) in the case of clause (iii) and subclause (B) of clause (ii), each such transferee agrees in writing to become subject to the terms of this Agreement and agrees to be bound by the applicable underwriter lock-up and (y) in the case of subclause (A) of clause (ii), each such transferee who receives one percent or more of the Common Stock in such distribution agrees in writing to become subject to the terms of this Agreement and agrees to be bound by the applicable underwriter lock-up.

 

7.3            Confidentiality. All notices received by an Initiating Holder, Demand Eligible Holder and a Piggyback Eligible Holder pursuant to this Agreement regarding any proposed sale of Registered Securities shall be kept confidential by such Holder for six months after receipt of such notice unless required to be disclosed by any law, rule, regulation, order, decree or subpoena of any governmental agency or authority or court or unless otherwise agreed to by the Company. Each Holder shall maintain the confidentiality of any confidential information received from or otherwise made available by the Company to such Holder; provided that disclosure of such confidential information may be made (a) to any Person who is an Affiliate, member, partner, officer, director, investor or, potential investor or employee of such Holder or counsel to or accountants of such Holder or such Affiliate, or any rating agency engaged by such Holder, provided that such Persons are notified of the Holders’ confidentiality obligations hereunder and agree for the benefit of the Company to be bound by such obligations and (b) to representatives of any bank regulator or similar regulatory authority with regulatory jurisdiction over a Holder in connection with their examination of the records of such Holder or any Affiliate thereof. Information that (i) is or becomes available to a Holder from a public source other than as a result of a disclosure by such Holder or any of its Affiliates, (ii) is disclosed to a Holder by a third-party source who the Holder reasonably believes is not bound by an obligation of confidentiality to the Company, (iii) is or becomes required to be disclosed by a Holder by law, including by court order, or to a prospective transferee, or (iv) is independently developed by a Holder, shall not be deemed to be “confidential information” for purposes of this Agreement. The Holder shall not grant access, and the Company shall not be required to grant access, to information to any person who does not agree for the benefit of the Company to maintain the confidentiality (to the same extent a Holder is required to maintain confidentiality) of any confidential information received from or otherwise made available to it by the Company or the Holder under this Agreement.

 

7.4            Determination of Ownership. In determining ownership of Common Stock hereunder for any purpose, the Company may rely solely on the records of the transfer agent for the Common Stock from time to time, or, if no such transfer agent exists, the Company’s stock ledger.

 

7.5            No Recourse. Notwithstanding anything that may be expressed or implied in this Agreement, and notwithstanding the fact that certain of the Holders may be partnerships or limited liability companies, each Holder covenants, agrees and acknowledges that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement shall be had against any of the Company’s or the Holder’s former, current or future direct or indirect equity holders, controlling persons, stockholders, directors, officers, employees, agents, Affiliates, members, financing sources, managers, general or limited partners or assignees (each, a “Related

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Party” and collectively, the “Related Parties”), in each case other than the Company, the Holders or any of their respective assignees under this Agreement, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any of the Related Parties, as such, for any obligation or liability of the Company or the Holders under this Agreement or any documents or instruments delivered in connection herewith for any claim based on, in respect of or by reason of such obligations or liabilities or their creation; provided, however, nothing in this Section 7.5 shall relieve or otherwise limit the liability of the Company or any Holder, as such, for any breach or violation of its obligations under this Agreement or such agreements, documents or instruments.

 

7.6            Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be (a) given by personal delivery or delivery by internationally recognized overnight courier (e.g. Federal Express) and (b) deemed given and effective on receipt. The address for such notices and communications shall be as follows (or such other address as may be designated in writing hereafter, in the same manner, by such Person):

 

If to the Company:		Great Elm Capital Group, Inc.
		200 Clarendon Street, 51st Floor
		Boston, MA 02116
		Attention: General Counsel
with a copy (which shall not constitute notice) to:		Skadden, Arps, Slate, Meagher & Flom
		525 University Avenue, 14th Floor
		Palo Alto, CA 94301
		Attention: Michael J. Mies

 

If to any other Person who is then the registered Holder, to the address of such Holder as it appears in the applicable register for the Registrable Securities;

 

7.7            Survival. Each of the representations and warranties in this Agreement (or any certificate delivered pursuant hereto) shall survive the applicable sale of Registrable Securities indefinitely (or, in each case, until final resolution of any claim or actions arising from the breach of any such representation and warranty, if written notice of such breach was provided prior to the end of such survival period).

 

7.8            Choice of Law.  This Agreement and the transactions contemplated hereby will be governed by the laws of the State of Delaware that are applicable to contracts made in and performed solely in Delaware.

 

7.9           Enforcement.

 

(a)            Any dispute arising under, related to or otherwise involving this Agreement or the transactions

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contemplated hereby will be litigated in the Court of Chancery of the State of Delaware.  The parties agree to submit to the jurisdiction of the Court of Chancery of the State of Delaware and waive trial by jury.  The parties do not consent to mediate any disputes before the Court of Chancery.

 

(b)            Notwithstanding the foregoing, if there is a determination that the Court of Chancery of the State of Delaware does not have subject matter jurisdiction over any dispute arising under this Agreement, the parties agree that: (i) such dispute will be adjudicated only by, and will be subject to the exclusive jurisdiction and venue of, the Superior Court of Delaware of and for the County of New Castle; (ii) if the Superior Court of Delaware does not have subject matter jurisdiction over such dispute, then such dispute will be adjudicated only by, and will be subject to the exclusive jurisdiction and venue of, the Complex Commercial Litigation Division of the Superior Court of the State of Delaware of and for the County of Newcastle; and (iii) if the Complex Commercial Litigation Division of the Superior Court of the State of Delaware does not have subject matter jurisdiction over such dispute, then such dispute will be adjudicated only by, and will be subject to the exclusive jurisdiction and venue of, the United States District Court for the State of Delaware.

 

(c)            Each of the parties irrevocably (i) consents to submit itself to the personal jurisdiction of the Delaware courts in connection with any dispute arising under this Agreement, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for relief from the Delaware courts or any other court or governmental body and (iii) agrees that it will not bring any action arising under this Agreement in any court other than the Delaware courts.  EACH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF THIS AGREEMENT, THE NEGOTIATION OR ENFORCEMENT HEREOF OR THE TRANSACTIONS.

 

(d)            Process may be served in the manner specified in Section ‎‎‎ 8.7, such service will deemed effective on the date of such notice, and each party irrevocably waives any defenses or objections it may have to service in such manner.

 

(e)            The court shall award attorneys’ fees and expenses and costs to the substantially prevailing party in any action (including appeals) for the enforcement or interpretation of this Agreement.  If there are cross claims in such action (including appeals), the court will determine which party is the substantially prevailing party as to the action as a whole and award fees, expenses and costs to such party.

 

(f)            The transactions contemplated by this Agreement are unique. Accordingly, each of the Company and each Investor acknowledges and agrees that, in addition to all other remedies to which it may be entitled, each of the parties hereto is entitled to seek a decree of specific performance; provided that the party seeking specific performance is not in material default hereunder. The Company and the Investors agree that, if for any reason a party shall have failed to perform its obligations under this Agreement, then the party seeking to enforce this Agreement against such nonperforming party shall be entitled to specific performance and injunctive and other equitable relief, and the

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parties further agree to waive any requirement for the securing or posting of any bond in connection with the obtaining of any such injunctive or other equitable relief. This provision is without prejudice to any other rights that any party may have against another party for any failure to perform its obligations under this Agreement, including the right to seek damages for a breach of any provision of this Agreement, and all rights, powers and remedies available (at law or in equity) to a party in respect hereof by the other party shall be cumulative and not alternative or exclusive, and the exercise or beginning of the exercise of any thereof by a party shall not preclude the simultaneous or later exercise of any other rights, powers or remedies by such party.

 

7.10        No Third Party Beneficiaries .  Except as provided in Article ‎4, this Agreement is solely for the benefit of the parties.  Except as provided in Article ‎4, no other Person will be entitled to rely on this Agreement or to anticipate the benefits of this Agreement as a third party beneficiary hereof.

 

7.11        Assignment .  No party may assign, delegate or otherwise transfer this Agreement or any rights or obligations under this Agreement in whole or in part (whether by operation of law or otherwise), without the prior written content of the other parties.  Subject to the foregoing, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and permitted assigns.  Any assignment in violation of this Section ‎‎‎7.11 will be null and void. No such prior written consent shall be required for an assignment to an Affiliate of such Holder. The Company may not assign its respective rights or obligations hereunder without the prior written consent of each Holder.

 

7.12        No Waiver.  No failure or delay in the exercise or assertion of any right hereunder will impair such right or be construed to be a waiver of, or acquiescence in, or create an estoppel with respect to any breach of any representation, warranty or covenant herein, nor will any single or partial exercise of any such right preclude other or further exercise thereof or of any other right.  All rights and remedies under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

7.13        Severability.  Any term or provision hereof that is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the invalid, void or unenforceable term or provision in any other situation or in any other jurisdiction.  If the final judgment of a court of competent jurisdiction or other authority declares any term or provision hereof invalid, void or unenforceable, the court or other authority making such determination will have the power to and will, subject to the discretion of such body, reduce the scope, duration, area or applicability of the term or provision, to delete specific words or phrases, or to replace any invalid, void or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision.

 

7.14        Amendment.  Subject to applicable Law, the parties may (a) extend the time for the performance

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of obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party herein, (c) waive compliance by the other party with any of the agreements or conditions herein or (d) amend, modify or supplement this Agreement.  Any agreement on the part of a party to any such extension, waiver, amendment, modification or supplement will be valid only if in an instrument in writing signed by an authorized representative of such party. This Agreement may be amended with the consent of the Company and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company shall have obtained the written consent to such amendment, action or omission to act of Holders owning at least 66 2/3% of the Registrable Securities then held by all Holders; provided that no such amendment, action or omission that adversely affects, alters or changes the interests of any Holder in a manner disproportionate to the other Holders shall be effective against such Holder without the prior written consent of such Holder.

 

7.15        Entire Agreement.  This Agreement contains the entire agreement of the parties and supersedes all prior and contemporaneous agreements, negotiations, arrangements, representations and understandings, written, oral or otherwise, between the parties with respect to the subject matter hereof.

 

7.16        Counterparts.  This Agreement may be executed in one or more counterparts (whether delivered by electronic copy or otherwise), each of which will be considered one and the same agreement and will become effective when counterparts have been signed by each of the parties and delivered to the other party.  Each party need not sign the same counterpart.

 

7.17        Construction and Interpretation.  When a reference is made in this Agreement to a section or article, such reference will be to a section or article of this Agreement, unless otherwise clearly indicated to the contrary.  Whenever the words “include,” “includes” or “including” are used in this Agreement they will be deemed to be followed by the words “without limitation”.  The words “hereof,” “herein” and “herewith” and words of similar import will, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and article and section references are references to the articles and sections of this Agreement, unless otherwise specified.  The plural of any defined term will have a meaning correlative to such defined term and words denoting any gender will include all genders and the neuter.  Where a word or phrase is defined herein, each of its other grammatical forms will have a corresponding meaning.  A reference to any legislation or to any provision of any legislation will include any modification, amendment, re-enactment thereof, any legislative provision substituted therefore and all rules, regulations and statutory instruments issued or related to such legislation.  If any ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties, and no presumption or burden of proof will arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.  No prior draft of this Agreement will be used in the interpretation or construction of this Agreement.  The parties intend that each provision of this Agreement will be given full separate and independent effect.  Although the same or similar subject matters may be addressed in different provisions of this Agreement, the parties intend that, except as expressly provided herein, each such provision will be

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read separately, be given independent significance and not be construed as limiting any other provision of this Agreement (whether or not more general or more specific in scope, substance or content).  Headings are used for convenience only and will not in any way affect the construction or interpretation of this Agreement.  References to documents includes electronic communications.

 

7.18        Definitions. Unless the context otherwise requires, the following terms shall have the following respective meanings.

 

(a)           “Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person as of the date on which, or at any time during the period for which, the determination of affiliation is being made (including any investment fund the primary investment advisor to which is such Person or an Affiliate thereof); provided, that for purposes of this Agreement, no Holder shall be deemed an Affiliate of the Company or any of its Subsidiaries. For purposes of this definition, the term “control” (including the correlative meanings of the terms “controlled by” and “under common control with”), 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 policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

(b)           “beneficially owned”, “beneficial ownership” and similar phrases have the same meanings as such terms have under Rule 13d-3 (or any successor rule then in effect) under the Exchange Act, except that in calculating the beneficial ownership of any Holder, such Holder shall be deemed to have beneficial ownership of all securities that such Holder has the right to acquire, whether such right is currently exercisable or is exercisable upon the occurrence of a subsequent event. For the avoidance of doubt, each Holder shall be deemed to beneficially own all of the shares of Common Stock held by any of its Affiliates.

 

(c)          “Block Sale” means the sale of shares of Common Stock constituting more than 1% of Common Stock then outstanding to one or more purchasers in a registered transaction without a prior marketing process by means of (i) a bought deal, (ii) a block trade or (iii) a direct sale.

 

(d)           “Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in New York, New York.

 

(e)           “Exchange Act” means the Securities Exchange Act of 1934

 

(f)           “Family Member” shall mean, with respect to any natural Person, such Person’s parents, spouse (but not including a former spouse or a spouse from whom such Person is legally separated) and descendants (whether or not adopted) and any trust, family limited partnership or limited liability company that is and remains solely for the benefit of such Person’s spouse (but not including a former spouse or a spouse from whom such Person is legally separated) and/or descendants.

 

(g)           “Issuer Free Writing Prospectus” means an issuer free writing prospectus, as defined in Rule 433

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under the Securities Act, relating to an offer of the Registrable Securities.

 

(h)           “Other Registrable Securities” means Common Stock and any other securities issued or issuable with respect to, on account of or in exchange for Other Registrable Securities, whether by stock split, stock dividend, recapitalization, merger, charter amendment or otherwise held by any other Person who has rights to participate in any offering of securities by the Company pursuant to a registration rights agreement or other similar arrangement with the Company.

 

(i)           “Person” means any individual, partnership, corporation, company, association, trust, joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.

 

(j)           “Proceeding” means any action, claim, suit, proceeding or investigation (including a preliminary investigation or partial proceeding, such as a deposition) pending or known to the Company to be threatened.

 

(k)           “Prospectus” means the prospectus included in a Registration Statement (including a prospectus that includes any information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A promulgated under the Securities Act), all amendments and supplements to the Prospectus, including post-effective amendments, all material incorporated by reference or deemed to be incorporated by reference in such Prospectus and any Issuer Free Writing Prospectus.

 

(l)           “Registrable Securities” means any Common Stock and any other securities issued or issuable with respect to, on account of or in exchange for Registrable Securities, whether by stock split, stock dividend, recapitalization, merger, charter amendment or otherwise that are held by the Holders or that are held by any Affiliate, transferee or assignee of any Holder after giving effect to a transfer made in compliance with Section 8(f), all of which Common Stock are subject to the rights provided herein until such rights terminate pursuant to the provisions of this Agreement. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) a registration statement registering such Registrable Securities under the Securities Act has been declared effective and such Registrable Securities have been sold, transferred or otherwise disposed of by the Holder thereof pursuant to such effective registration statement, (ii) such Registrable Securities are sold, transferred or otherwise disposed of pursuant to Rule 144, (iii) such securities cease to be outstanding, or (iv) after the Common Stock has been listed for trading on a national securities exchange for at least 90 days, such Registrable Securities as are held by any Holder who, together with its Affiliates, at the time of determination, holds in the aggregate less than 1% of the then outstanding shares of Common Stock, provided that such shares may be sold pursuant to Rule 144(b)(1) under the Securities Act without limitations on volume.

 

(m)           “Rule 144” means Rule 144 promulgated by the SEC 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 SEC having substantially the same effect as such Rule.

 

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(n)           “Rule 158” means Rule 158 promulgated by the SEC 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 SEC having substantially the same effect as such Rule.

 

(o)           “Rule 174” means Rule 174 promulgated by the SEC 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 SEC having substantially the same effect as such Rule.

 

(p)           “Rule 405” means Rule 405 promulgated by the SEC 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 SEC having substantially the same effect as such Rule.

 

(q)           “Rule 424” means Rule 424 promulgated by the SEC 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 SEC having substantially the same effect as such Rule.

 

(r)           “SEC” means the Securities and Exchange Commission or any other federal agency then administering the Securities Act or Exchange Act.

 

(s)           “Selling Expenses” means all underwriting fees, discounts, selling commissions and stock transfer taxes applicable to the sale of Registrable Securities and related legal and other fees not included within the definition of Registration Expenses.

 

(t)           “Ten Percent Holder” means a Holder, who together with its Affiliates, beneficially owns 10% or more of the outstanding shares of Common Stock as of the date of determination. Any rights provided to a Ten Percent Holder under this Agreement shall apply and be available to a Ten Percent Holder only for so long as such Holder is a Ten Percent Holder as of the date of determination.

 

(u)           “Trading Market” means the principal national securities exchange in the United States on which Registrable Securities are (or are to be) listed.

 

(v)           “Transaction Documents” means, collectively, this Agreement and any and all other agreements or instruments provided for in this Agreement to be executed and delivered by the Parties in connection with the transactions contemplated hereby.

 

(w)           “WKSI” means a “well known seasoned issuer” as defined under Rule 405.

 

 

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The Company and the Holders have executed this Registration Rights Agreement on the day and year first written above.

 

 

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