FIRST AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT BY AND AMONG MORLEX, INC. and the HOLDERS set forth on the signature pages hereto Dated as of April __, 2008
FIRST
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
BY
AND AMONG
MORLEX,
INC.
and
the
HOLDERS set forth on the signature pages hereto
Dated
as of April __, 2008
TABLE
OF CONTENTS
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ARTICLE
I DEFINITIONS AND OTHER MATTERS
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2
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Section
1.1 Definitions
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2
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Section
1.2 Definitions Generally
|
6
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ARTICLE
II REGISTRATION RIGHTS
|
6
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|
|
Section
2.1 Demand Registration
|
6
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Section
2.2 Priority on Demand Registration
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8
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Section
2.3 Piggyback Registration
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9
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Section
2.4 Priority on Piggyback Registrations
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10
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Section
2.5 Lock-Up Agreements
|
11
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Section
2.6 Registration Procedures
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11
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Section
2.7 Registration Restrictions
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14
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Section
2.8 Indemnification by the Company
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14
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Section
2.9 Indemnification by the Holders
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14
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Section
2.10 Conduct of Indemnification Proceedings
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15
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Section
2.11 Contribution
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15
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Section
2.12 Underwritten Offering
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16
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Section
2.13 Other Indemnification
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16
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Section
2.14 Rule 144 Information/Exchange Act Reporting
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16
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Section
2.15 Parties in Interest
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16
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Section
2.16 Mergers, Recapitalizations, Exchanges or Other Transactions
Affecting
Registrable Securities
|
16
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Section
2.17 Registration Expenses
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17
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Section
2.18 No Inconsistent Agreements
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17
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ARTICLE
III MISCELLANEOUS
|
18
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Section
3.1 Term of the Agreement; Termination of Certain
Provisions.
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18
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Section
3.2 Amendments; Waiver
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18
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Section
3.3 Governing Law
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18
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Section
3.4 Notices
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18
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Section
3.5 Severability
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19
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Section
3.6 Specific Performance
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19
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Section
3.7 Assignment; Successors
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19
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Section
3.8 No Third-Party Rights
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20
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20
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Section
3.10 Execution in Counterparts
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20
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i
FIRST
AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT
This
FIRST AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is
made and entered into as of April __, 2008 (the “Closing
Date”),
and
amends and restates that certain Registration Rights, dated as of February
14,
2008, by and among Morlex, Inc., a Colorado corporation (the “Company”)
and
the Holders (as defined herein) set forth on the signature pages thereto (the
“Original
Registration Rights Agreement”).
WITNESSETH:
WHEREAS,
the Company and the Holders listed on Schedule
E
attached
hereto entered into the Original Registration Rights Agreement;
WHEREAS,
pursuant to Section 3.2(a) of the Original Registration Rights Agreement, the
Original Registration Rights Agreement may be amended by mutual agreement of
the
Company and the Holders of a majority of the Registrable
Securities;
WHEREAS,
any amendment effected in accordance with Section 3.2(a) of the Original
Registration Rights Agreement is binding on all Holders, each future Holder
of
Common Stock, and the Company;
WHEREAS,
the undersigned Holders to this Agreement as of the date hereof constitute
the
Holders of at least a majority of the Registrable Securities;
WHEREAS,
the Company entered into: (i) an Agreement and Plan of Merger (the “RHI
Merger Agreement”)
with
Rightside Holdings, Inc. (“Rightside”)
and
RHI Merger Sub, Inc., a wholly-owned subsidiary of the Company (“RHI
Merger Sub”);
(ii)
an Agreement and Plan of Merger (the “DMG
Merger Agreement”,
and
together with the RHI Merger Agreement, the “Merger
Agreements”)
with
▇▇▇▇▇▇ Media Group, Inc. (“▇▇▇▇▇▇”)
and
DMG Merger Sub, Inc., a wholly-owned subsidiary of the Company (“DMG
Merger Sub”);
and
(iii) a Stock Purchase Agreement (the “AAA
Stock Purchase Agreement”)
with
All Ad Acquisition, Inc., a Delaware corporation (“AAA”)
and
the shareholders of AAA listed on the signature pages thereto, whereby all
of
the outstanding and issued shares of common stock of AAA were purchased by
the
Company.
WHEREAS,
AAA is a party to the Stock Purchase Agreement (the “Ad
Authority Stock Purchase Agreement”),
by
and among Iakona, Inc. (“Iakona”),
▇▇▇▇▇
▇. ▇▇▇▇▇ (“▇▇▇▇▇”
and
together with Iakona, the “Sellers”),
and
AAA, whereby AAA agreed to purchase all of the outstanding capital stock of
Ad
Authority, Inc. (“Ad Authority”) from the Sellers;
WHEREAS,
in connection with the transactions contemplated pursuant to the Ad Authority
Stock Purchase Agreement, the Company may issue Junior Convertible Unsecured
Notes of the Company (the “Junior
Convertible Notes”)
and/or
will sell shares of Company Common Stock in private placement transactions
(together with the issuance of Junior Convertible Notes, the “Equity
Financing”).
WHEREAS,
in connection with the acquisition of Rightside, ▇▇▇▇▇▇ and AAA (the
“Acquisition
Transactions”),
the
acquisition of Ad Authority and the Equity Financing, the Company wishes to
grant registration rights, under the terms and provisions set forth herein,
to
(i) certain of the parties hereto who received or may receive in the future
Company Common Stock in connection with the Acquisition Transactions (the
“Acquisition
Holders”),
(ii)
the Sellers in the acquisition of Ad Authority (the “Ad
Authority Holders”),
and
(iii) who may receive shares of Common Stock upon conversion of the Junior
Convertible Notes or otherwise purchase shares of Common Stock in the Equity
Financing (the “Investor
Holders”).
WHEREAS,
the Company also wishes to grant registration rights, under the terms and
provisions set forth herein, to certain of the parties hereto who were holders
of Company Common Stock as of the date immediately prior to the Closing Date
(the “Original
Holders”).
WHEREAS,
the Holders are Beneficial Owners of Registrable Securities (as defined
herein).
NOW,
THEREFORE, in consideration of the premises and of the mutual agreements,
covenants and provisions herein contained, the parties hereto agree as
follows:
ARTICLE
I
DEFINITIONS
AND OTHER MATTERS
Section
1.1 Definitions.
Capitalized terms used in this Agreement without other definition shall, unless
expressly stated otherwise, have the meanings specified in this
Section 1.1:
(a) “AAA”
has
the
meaning ascribed to such term in the recitals.
(b) “Ad
Authority Stock Purchase Agreement”
has
the
meaning ascribed to such term in the recitals.
(c) “Acquisition
Holders”
has
the
meaning ascribed to such term in the recitals.
(d) “Acquisition
Transactions”
has
the
meaning ascribed to such term in the recitals.
(e) “Ad
Authority”
has
the
meaning ascribed to such term in the recitals.
(f) “Ad
Authority Holders”
has
the
meaning ascribed to such term in the recitals.
(g) “Ad
Authority Stock Purchase Agreement”
has
the
meaning ascribed to such term in the recitals.
(h) “Affiliate”
shall
mean any person who is an “affiliate” as defined in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act (as defined below).
(i) “Agreement”
has
the
meaning ascribed to such term in the preamble.
(j) “Beneficial
Owner”
has
the
meaning set forth in Rule 13d-3 under the Exchange Act.
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2
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(k) “Board”
means
the Board of Directors of the Company.
(l) “Certificate
of Incorporation”
means
the Articles of Incorporation of the Company, as filed with the Colorado
Secretary of State on December 1, 2005, as amended or restated from time to
time.
(m) “Common
Stock”
means
the common stock, par value $0.001 per share of the Company.
(n) “Company”
has
the
meaning ascribed to such term in the preamble.
(o) “Demand
Holders”
has
the
meaning ascribed to such term in Section 2.1(a)(i).
(p) “Demand
Notice”
has
the
meaning ascribed to such term in Section 2.1(a)(i).
(q) “Demand
Notice”
has
the
meaning ascribed to such term in Section 2.1(a).
(r) “Demand
Registration”
means
the registration under the Securities Act of all or any portion of the
Registrable Securities specified in the Demand Notice.
(s) “DMG
Merger Agreement”
has
the
meaning ascribed to such term in the recitals.
(t) “DMG
Merger Sub”
has
the
meaning ascribed to such term in the recitals.
(u) “▇▇▇▇▇▇”
has
the
meaning ascribed to such term in the recitals.
(v) “Equity
Financing”
has
the
meaning ascribed to such term in the recitals.
(w) “Exchange
Act”
means
the United States Securities Exchange Act of 1934, as amended, and the rules
and
regulations promulgated thereunder.
(x) “Governmental
Authority”
means
any national, local or foreign (including U.S. federal, state or local) or
supranational (including European Union) governmental, judicial, administrative
or regulatory (including self-regulatory) agency, commission, department, board,
bureau, entity or authority of competent jurisdiction.
(y) “Holder”
means
any persons set forth on the signature pagers hereto so long as such persons
are
the Beneficial Owners of Registrable Securities. Each Holder shall be designated
as “Acquisition Holder,” “Ad Authority Holder,” “Investor Holder,” or “Original
Holder” in accordance with the terms of this Agreement at the time that each
such Holder becomes a Holder hereunder. (i) Each Acquisition Holder shall be
listed on Schedule
A,
as such
Schedule may be amended by the Company from time to time in accordance with
the
terms hereof; (ii) each Ad Authority Holder shall be listed on Schedule
B,
as such
Schedule may be amended by the Company from time to time in accordance with
the
terms hereof; (iii) each Investor Holder shall be listed on Schedule
C,
as such
Schedule may be amended by the Company from time to time in accordance with
the
terms hereof; and (iv) each Original Holder shall be listed on Schedule
D,
as such
Schedule may be amended by the Company from time to time in accordance with
the
terms hereof.
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3-
(z) “Iakona”
has
the
meaning ascribed to such term in the recitals.
(aa) “Indemnified
Parties”
has
the
meaning ascribed to such term in Section 2.8.
(bb) “Investor
Holders”
has
the
meaning ascribed to such term in the recitals.
(cc) “Junior
Convertible Notes”
has
the
meaning ascribed to such term in the recitals.
(dd) “▇▇▇▇▇”
has
the
meaning ascribed to such term in the recitals.
(ee) “Maximum
Offering Size”
has
the
meaning ascribed to such term in Section
2.1(d).
(ff) “Merger
Agreements”
has
the
meaning ascribed to such term in the recitals.
(gg) “Original
Holders”
has
the
meaning ascribed to such term in the recitals.
(hh) “Other
Holders”
has
the
meaning set forth in Section 2.1(a)(ii).
(ii) “Piggyback
Registration”
means
the registration under the Securities Act of Registrable Securities on a
registration statement initially intended to register any equity securities
of
the Company (other than a registration on Form S-8, or any successor Forms,
or,
with respect to the Holders, a registration that is pursuant to a Demand
Registration made by the Holders), whether or not for sale for the Company’s own
account.
(jj) Registration
Expenses”
means
any and all expenses incident to the performance of or compliance with any
registration or marketing of securities, including all (i) registration and
filing fees, and all other fees and expenses payable in connection with the
listing of securities on any securities exchange or automated interdealer
quotation system, (ii) fees and expenses of compliance with any securities
or “blue sky” laws (including reasonable fees and disbursements of counsel in
connection with “blue sky” qualifications of the securities registered),
(iii) expenses in connection with the preparation, printing, mailing and
delivery of any registration statements, prospectuses and other documents in
connection therewith and any amendments or supplements thereto,
(iv) security engraving and printing expenses, (v) internal expenses
of the Company (including, without limitation, all salaries and expenses of
its
officers and employees performing legal or accounting duties),
(vi) customary fees and expenses for independent certified public
accountants retained by the Company (including the expenses relating to any
comfort letters or costs associated with the delivery by independent certified
public accountants of any comfort letters requested pursuant to Section 2.9(h)),
(vii) reasonable fees and expenses of any special experts retained by the
Company in connection with such registration, (viii) reasonable fees,
out-of-pocket costs and expenses of the Company, including counsel for the
Company, (ix) reasonable fees, out-of-pocket costs and expenses of one
counsel to the selling shareholders, (x) fees and expenses in connection
with any review by the Financial Industry Regulatory Authority, Inc.
(“FINRA”)
of the
underwriting arrangements or other terms of the offering, and all fees and
expenses of any “qualified independent underwriter,” including the reasonable
fees and expenses of any counsel thereto, (xi) costs of printing and
producing any agreements among underwriters, underwriting agreements, any “blue
sky” or legal investment memoranda and any selling agreements and other
documents in connection with the offering, sale or delivery of the Registrable
Securities, (xii) transfer agents’ and registrars’ fees and expenses and
the fees and expenses of any other agent or trustee appointed in connection
with
such offering, (xiii) expenses relating to any analyst or investor
presentations or any “road shows” undertaken in connection with the
registration, marketing or selling of the Registrable Securities,
(xiv) fees and expenses payable in connection with any ratings of the
Registrable Securities, including expenses relating to any presentations to
rating agencies and (xv) all out-of-pocket costs and expenses incurred by
the Company or its appropriate officers in connection with their compliance
with
Section 2.6(l).
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(kk) “Registrable
Securities”
shall
mean shares of Common Stock beneficially owned by the Holders on the Closing
Date or acquired by the Holders as a result of conversion of the Junior
Convertible Notes, otherwise in connection with the Equity Financing, or in
connection with the transactions contemplated pursuant to the Ad Authority
Stock
Purchase Agreement. For purposes of this Agreement, (i) Registrable
Securities shall cease to be Registrable Securities when a Registration
Statement covering such Registrable Securities has been declared effective
under
the Securities Act by the SEC and all such Registrable Securities have been
disposed of pursuant to such effective Registration Statement and (ii) the
Registrable Securities of a Holder shall not be deemed to be Registrable
Securities at any time when the entire amount of such Registrable Securities,
in
the written opinion of counsel satisfactory to the Company, in its reasonable
judgment, may be sold to the public pursuant to Rule 144(k) (or any successor
provision then in effect) under the Securities Act in any three-month period
or
any such Registrable Securities have been sold in a sale made pursuant to Rule
144 of the Securities Act.
(ll) “Rule
415”
shall
mean Rule 415 promulgated under the Securities Act, as amended from time to
time, or any similar rule thereto that may be promulgated by the
SEC.
(mm) “RHI
Merger Agreement”
has
the
meaning ascribed to such term in the recitals.
(nn) “RHI
Merger Sub”
has
the
meaning ascribed to such term in the recitals.
(oo) “Rightside”
has
the
meaning ascribed to such term in the recitals.
(pp) “SEC”
means
the United States Securities and Exchange Commission.
(qq) “Securities
Act”
means
the United States Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
(rr) “Sellers”
has
the
meaning ascribed to such term in the recitals.
(ss) “Stock
Purchase Agreement”
has
the
meaning ascribed to such term in the recitals.
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(tt) “Subsidiary”
means,
with respect to any person, any corporation, limited liability company, company,
partnership, trust, association or other legal entity or organization of which
such person (either directly or through one or more subsidiaries of such person)
(a) owns, directly or indirectly, a majority of the capital stock or other
equity interests the holders of which are generally entitled to vote for the
election of the board of directors or other governing body of such corporation,
limited liability company, partnership, trust, association or other legal entity
or organization, or (b) is otherwise entitled to exercise (1) a
majority of the voting power generally in the election of the board of directors
or other governing body of such corporation, limited liability company,
partnership, trust, association or other legal entity or organization or
(2) control of such corporation, limited liability company, partnership,
trust, association or other legal entity or organization.
(uu) “Transfer”
means,
in respect of any shares of Common Stock, property or other asset, any sale,
assignment, transfer, distribution or other disposition thereof, whether
voluntarily or by operation of Law.
(vv) “Underwritten
Offering”
means
a
firm commitment underwritten public offering pursuant to an effective
registration statement under the Securities Act, other than pursuant to a
registration statement on Forms S-4 or S-8 or any similar or successor
form.
Section
1.2 Definitions
Generally.
Wherever required by the context of this Agreement, the singular shall include
the plural and vice versa, and the masculine gender shall include the feminine
and neutral genders and vice versa, and references to any agreement, document
or
instrument shall be deemed to refer to such agreement, document or instrument
as
amended, supplemented or modified from time to time. When used
herein:
(a) the
word
“or” is not exclusive;
(b) the
words
“including,” “includes,” “included” and “include” are deemed to be followed by
the words “without limitation”;
(c) the
terms
“herein,” “hereof” and “hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular section, paragraph or
subdivision;
(d) the
word
“person” means any individual, corporation, limited liability company, trust,
joint venture, association, company, partnership or other legal entity or a
government or any department or agency thereof or self-regulatory organization;
and
(e) all
section, paragraph or clause references not attributed to a particular document
shall be references to such parts of this Agreement, and all exhibit, annex
and
schedule references not attributed to a particular document shall be references
to such exhibits, annexes and schedules to this Agreement.
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6-
ARTICLE
II
REGISTRATION
RIGHTS
Section
2.1 Demand
Registration.
(a) Procedures
for Demand.
(i) If,
at
any time after the date hereof, the Company shall receive a written request
(a
“Demand
Notice”)
from
the Investor Holders and/or the Ad Authority Holders (collectively, the
“Demand
Holders”)
that
the Company effect a Demand Registration for all or any portion of the
Registrable Securities specified in such Demand Notice, specifying the intended
method of disposition thereof, then the Company shall use its reasonable best
efforts to effect within 60 days of such Demand Notice, subject to the
restrictions of Section 2.1(d),
the
registration under the Securities Act of the Registrable Securities for which
the Demand Holders have requested registration under this Section 2.1,
all to
the extent necessary to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be registered;
provided,
that
the
Company shall have no obligation to register such shares of Registrable
Securities pursuant to this Section 2.1(a)(i)
if the
number of shares of Registrable Securities specified in such notice do not
constitute a majority of the shares of Common Stock then held by all of the
Demand Holders. At any time prior to the effective date of a registration
statement relating to any registration, the Demand Holders who elected to
participate in a Demand Registration pursuant to this Section 2.1,
in
their individual capacities, may revoke all or part of such Demand Registration
request by providing a notice to the Company revoking such request.
(ii) If,
on or
after the date that is one (1) year from the date of the closing of the
transactions contemplated pursuant to the Ad Authority Stock Purchase Agreement,
the Company shall receive a Demand Notice from the Acquisition Holders or the
Original Holders (collectively, the “Other Holders”) to effect a Demand
Registration for all or any portion of the Registrable Securities specified
in
such Demand Notice, specifying the intended method of disposition thereof,
then
the Company shall use its reasonable best efforts to effect within 60 days
of
such Demand Notice, subject to the restrictions of Section 2.1(d),
the
registration under the Securities Act of the Registrable Securities for which
the Other Holders have requested registration under this Section 2.1,
all to
the extent necessary to permit the disposition (in accordance with the intended
methods thereof as aforesaid) of the Registrable Securities so to be registered;
provided,
that
the
Company shall have no obligation to register such shares of Registrable
Securities pursuant to this Section 2.1(a)(ii)
if the
number of shares of Registrable Securities specified in such notice do not
constitute a majority of the shares of Common Stock held by all of the Other
Holders. At any time prior to the effective date of a registration statement
relating to any registration, the Other Holders who elected to participate
in a
Demand Registration pursuant to this Section 2.1,
in
their individual capacities, may revoke all or part of such Demand Registration
request by providing a notice to the Company revoking such request.
(b) Number
of Demands.
Subject
to the applicable provisions of Section 2.1(a),
(i) the
Demand Holders shall be entitled to request one (1) Demand Registration;
provided,
however,
that in
the event of a cut back in registration pursuant to Section
2.2
hereof
that exceeds twenty-five percent (25%) of the number of shares requested to
be
registered by Demand Holders, the Demand Holders shall receive one (1)
additional Demand Registration and (ii) the Other Holders shall be entitled
to
request one (1) Demand Registration.
(c) Notice
of Demand.
Within
10 (ten) business days after receipt of a Demand Notice, the Company shall
give
written notice thereof to each of the other Holders (a “Registration
Notice”)
and,
shall, subject to the terms set forth in this Section 2.1
and
further subject to any underwriter cut backs (or cut backs otherwise required
by
applicable law, as determined by the Company’s outside counsel), include in such
registration such number of Registrable Securities held by the Holders for
which
the Company has received written requests for inclusion within 10 (ten) business
days after such Holder’s receipt of the corresponding Registration
Notice.
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7-
(d) Notice
of Postponement.
Upon
notice to the Holders, the Company may postpone effecting a registration
statement for (or suspend the effectiveness of) a Demand Registration pursuant
to this Section 2.1
on one
occasion during any period of twelve consecutive months for a reasonable time
specified in the notice but not exceeding 90 days after receipt of the Demand
Notice, if (i) the Company’s Board of Directors shall determine in good
faith that effecting the registration would materially and adversely affect
an
offering of securities of the Company, the preparation of which had then been
commenced, or (ii) the Company is in possession of material non-public
information, the disclosure of which during the period specified in such notice
the Company believes in good faith would not be in the best interests of the
Company.
Section
2.2 Priority
on Demand Registration.
If
a
Demand Registration made pursuant to Section 2.1
involves
an Underwritten Offering in which the Company is selling and the underwriter
advises the Company and the Holders that, in its view, the number of Registrable
Securities requested to be included in such registration exceeds the largest
number of Registrable Securities that can be sold without having an adverse
effect on such offering, including the price at which such shares can be sold,
or, if limits on the size of the offering are otherwise required by applicable
law, including, without limitations, Rule 415 (the “Maximum
Offering Size”),
then
the Company shall include in such registration, in the priority listed below,
up
to the Maximum Offering Size:
(a) upon
a
Demand Notice made by any of the Demand Holders:
(i) first,
all Registrable Securities of any Demand Holders requested to be registered
in
the Demand Registration by any Demand Holders delivering a Demand Notice and
all
Registrable Securities proposed to be registered for the account of any Demand
Holders pursuant to the Demand Registration rights set forth in Section 2.1(c)
hereof,
pro
rata
among
such Demand Holders, based on the respective amounts of Registrable Securities
held by such Demand Holders and available for sale;
(ii) second,
all Registrable Securities of any Other Holders proposed to be registered for
the account of any Other Holders pursuant to the Demand Registration rights
set
forth in Section 2.1(c)
hereof,
pro
rata
among
such Other Holders, based on the respective amounts of Registrable Securities
held by such Other Holders and available for sale;
(iii) third,
so
much of the Company securities proposed to be registered for the account of
the
Company; and
(iv) fourth,
all Registrable Securities proposed to be registered for the account of any
other holders, ratably among such holders based on the respective amounts of
Registrable Securities held by such holders, pursuant to any Piggyback
Registration rights, other than the Piggyback Registration rights set forth
in
Section 2.3
hereof.
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(b) upon
a
Demand Notice made by any of the Other Holders:
(i) first,
all Registrable Securities of any Other Holders requested to be registered
in
the Demand Registration by any Other Holders delivering a Demand Notice and
all
Registrable Securities proposed to be registered for the account of any Holders
pursuant to the Demand Registration rights set forth in Section 2.1(c)
hereof,
pro
rata
among
such Holders, based on the respective amounts of Registrable Securities held
by
such Holders and available for sale;
(ii) second,
so much of the Company securities proposed to be registered for the account
of
the Company; and
(iii) third,
all Registrable Securities proposed to be registered for the account of any
other holders, ratably among such holders based on the respective amounts of
Registrable Securities held by such holders, pursuant to any Piggyback
Registration rights, other than the Piggyback Registration rights set forth
in
Section 2.3
hereof.
Section
2.3 Piggyback
Registration.
(a) From
and
after the Closing Date and until one (1) year from the date of closing of the
transactions contemplated pursuant to the Ad Authority Stock Purchase Agreement,
whenever the Company proposes to register any of its equity securities under
the
Securities Act (other than a registration statement on Form S-8 or on Form
S-4
or any similar successor forms thereto), whether for its own account or for
the
account of one or more stockholders of the Company, the Company shall each
such
time give prompt written notice at least fifteen (15) business days prior to
the
anticipated filing date of the registration statement relating to such
registration to all Holders, which notice shall set forth the Holders’ rights
under this Section 2.3
and
shall offer the Holders the opportunity to include in such Piggyback
Registration the number of Registrable Securities of the same class or series
as
those proposed to be registered as the Holders may request, subject to the
provisions of Sections
2.3(a) and (b)
and
Section
2.4.
Upon
the request of the Holders made within ten (10) business days after the receipt
of notice from the Company (which request shall specify the number of
Registrable Securities, if any, intended to be registered by the Holders),
the
Company shall use its reasonable best efforts to effect the registration under
the Securities Act of all Registrable Securities that the Company has been
so
requested to register by the Holders to the extent necessary to permit the
disposition of the Registrable Securities so to be registered, provided that
(i) if such registration involves an Underwritten Offering, the Holders
must sell their Registrable Securities to the underwriters selected by the
Company on the same terms and conditions as apply to the Company, as applicable,
and (ii) if, at any time after giving notice of its intention to register
any securities pursuant to this Section 2.3(a) and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
register any of such equity securities proposed to be registered by the Company,
the Company shall give notice to the Holders and, thereupon, shall be relieved
of its obligation to register any Registrable Securities in connection with
such
registration, provided that if later the Company does agree to register any
such
equity securities for its own account or for the account of any stockholder,
then the piggyback registration rights and provisions of Section 2.3(a) shall
apply to such registration. No registration effected under this Section 2.3
shall
relieve the Company of its obligations to effect a Demand Registration to the
extent required by Section 2.1.
There
shall be no limitation on the number of Piggyback Registrations that the Company
shall be required to effect under this Section 2.3.
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9-
(b) Notwithstanding
any provision in this Section 2.3
or
elsewhere in this Agreement, no provision relating to the registration of
Registrable Securities shall be construed as permitting the Holders to effect
a
Transfer of securities that is otherwise expressly prohibited by the terms
of
any applicable agreement between the Holders and the Company or any of its
Subsidiaries. The Company shall not be obligated to provide notice or afford
Piggyback Registration to the Holders pursuant to this Section 2.3
unless
some or all of the Holders’ Registrable Securities are permitted to be
Transferred under the terms of applicable agreements between the Holders and
the
Company or any of its Subsidiaries.
(c) At
any
time prior to the effective date of the registration statement relating to
such
registration, the Holders may revoke such Piggyback Registration request by
providing a notice to the Company revoking such request and any such revocation
shall not terminate Piggyback Registration rights for any such Holders with
respect to any subsequent registration statement in which the Company proposes
to register any of its equity securities under the Securities Act.
(d) Notwithstanding
any provision in this Section 2.3
or
elsewhere in the Agreement, the Company shall be entitled to elect to effect
the
registration under the Securities Act of all of the Registrable Securities
held
by the Holders in any individual Piggyback Registration, subject to the right
of
the Holders, in their individual capacities, to revoke all or a portion of
their
respective Piggyback Registration request pursuant to Section 2.3(c).
Section
2.4 Priority
on Piggyback Registrations.
(a) If
a
Piggyback Registration (that is not related to a Demand Registration made by
the
Holders) involves an Underwritten Offering and the underwriter advises the
Company, that, in its view, the number of Registrable Securities that any
eligible Holders intend to include in such registration exceeds the Maximum
Offering Size, or, if the Company otherwise determines that the Maximum Offering
Size is exceeded as a result of applicable laws, including, without limitation,
Rule 415, then the Company shall include in such registration, in the following
priority, up to the Maximum Offering Size:
(i) first,
so
much of the Company securities proposed to be registered for the account of
the
Company;
(ii) second,
all Registrable Securities requested to be registered in the Piggyback
Registration by the Demand Holders and Original Holders, pro
rata
among
such Holders, based on the respective amounts of Registrable Securities held
by
such Demand Holders and Original Holders and available for sale (after giving
effect to any Transfer restrictions relating to such Registrable Securities);
(iii) third,
all Registrable Securities requested to be registered in the Piggyback
Registration by the Acquisition Holders, pro
rata among
such Acquisition Holders, based on the respective amounts of Registrable
Securities held by such Acquisition Holders and available for sale (after giving
effect to any Transfer restrictions relating to such Registrable Securities);
and
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10-
(iv) fourth,
all Registrable Securities proposed to be registered for the account of any
other holders, ratably among such holders based on the respective amounts of
Registrable Securities held by such holders, pursuant to any Piggyback
Registration rights, other than the Piggyback Registration rights set forth
in
Section 2.3
hereof.
Section
2.5 Lock-Up
Agreements.
If any
registration of Registrable Securities shall be effected in connection with
a
Underwritten Offering, neither the Company nor any Holder shall effect any
public sale or distribution, including any sale pursuant to Rule 144, of any
shares of Common Stock or other security of the Company (except as part of
such
Underwritten Offering) until the earliest of (i) 90 days following
registration of Registrable Securities pursuant to this Agreement,
(ii) with respect to the Holders generally, such shorter time as may be
agreed to by the underwriters with respect to any one Holder, and (iii) such
time as members of management agree to with the underwriters with respect to
the
public sale or distribution of securities held by members of
management.
Section
2.6 Registration
Procedures.
Whenever the Company is required to effect a registration hereunder, the Company
shall use its reasonable best efforts to effect the registration and sale of
such Registrable Securities in accordance with the intended method of
disposition thereof as promptly as practicable, and, in connection with any
such
request, as applicable:
(a) The
Company shall, as expeditiously as reasonably practicable, prepare and file
with
the SEC a registration statement on any form for which the Company then
qualifies or that counsel for the Company shall deem appropriate and which
form
shall be available for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of distribution thereof,
and
use its reasonable best efforts to: (i) cause such filed registration
statement to become and remain effective, and (ii) promptly update such
registration statement so that it does not contain an 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 not misleading, until all of the
Registrable Securities included in such registration statement shall have
actually been sold thereunder; provided that, at the request of any Holder,
the
intended method of distribution relating to the sale of the Registrable
Securities to be registered thereunder shall provide for individual Holders
to
be named as selling stockholders under such registration statement.
(b) Prior
to
filing a registration statement or prospectus or any amendment or supplement
thereto, the Company shall, if requested, furnish to each Holder and each
underwriter, if any, of the Registrable Securities covered by such registration
statement copies of such registration statement as proposed to be filed, and
thereafter the Company shall furnish to each Holder and underwriter, if any,
such number of copies of such registration statement, each amendment and
supplement thereto (in each case including all exhibits thereto and documents
incorporated by reference therein), the prospectus included in such registration
statement (including each preliminary prospectus and any summary prospectus)
and
any other prospectus filed under Rule 424 or Rule 430A under the Securities
Act
and such other documents as a Holder or underwriter may reasonably request
in
order to facilitate the disposition of the Registrable Securities owned by
such
Holder. Each Holder shall have the right to request that the Company modify
any
information contained in such registration statement, amendment and supplement
thereto pertaining to such Holder, and the Company shall use its reasonable
best
efforts to comply with such request, provided,
however,
that
the Company shall not have any obligation so to modify any information if the
Company reasonably expects that so doing would cause the prospectus to contain
an 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 not
misleading.
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11-
(c) After
the
filing of the registration statement, the Company shall (i) cause the
related prospectus to be supplemented by any required prospectus supplement,
and, as so supplemented, to be filed pursuant to Rule 424 under the Securities
Act, (ii) comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities covered by such registration
statement during the applicable period in accordance with the intended methods
of disposition by the Holders thereof set forth in such registration statement
or supplement to such prospectus and (iii) promptly notify the Holders of
any stop order issued or threatened by the SEC or any state securities
commission and take all reasonable best efforts to prevent the entry of such
stop order or to remove it if entered.
(d) The
Company shall use its reasonable best efforts to (i) register or qualify
the Registrable Securities covered by such registration statement under such
other securities or “blue sky” laws of such jurisdictions in the United States
as the Holders reasonably (in light of the Holders’ intended plan of
distribution) requests and (ii) cause such Registrable Securities to be
registered with or approved by such other governmental agencies or authorities
as may be necessary by virtue of the business and operations of the Company
and
do any and all other acts and things that may be reasonably necessary or
advisable to enable a Holder to consummate the disposition of the Registrable
Securities owned by such Holder, provided that the Company shall not be required
to (A) qualify generally to do business in any jurisdiction where it would
not otherwise be required to qualify but for this Section 2.6(d),
(B) subject itself to taxation in any such jurisdiction or (C) consent
to general service of process in any such jurisdiction.
(e) The
Company shall immediately notify the Holders, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act, of the
occurrence of an event requiring the preparation of a supplement or amendment
to
such prospectus so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus will not contain an 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 not misleading and promptly prepare
and make available to the Holders and file with the SEC any such supplement
or
amendment.
(f) The
Company shall select an underwriter or underwriters in connection with any
Underwritten Offering; provided that, in the event of a Demand Registration
requested by the Holders, such underwriter or underwriters shall be selected
by
the Holders with the consent of the Company (which consent shall not be
unreasonably withheld). In connection with any Underwritten Offering, the
Company shall enter into customary agreements (including an underwriting
agreement in customary form) and take all such other actions as are reasonably
required in order to expedite or facilitate the disposition of such Registrable
Securities in any such Underwritten Offering, including, to the extent
necessary, the engagement of a “qualified independent underwriter” in connection
with the qualification of the underwriting arrangements with FINRA.
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12-
(g) Subject
to the execution of confidentiality agreements satisfactory in form and
substance to the Company in the exercise of its good faith judgment, the Company
will give to the Holders, their counsel and accountants (i) reasonable and
customary access to its books and records, that, in the reasonable opinion
of
the Board are reasonably related to such Holder’s interest as a stockholder, and
(ii) such opportunities to discuss the business of the Company with its
directors, officers, employees, counsel and the independent public accountants
who have certified its financial statements, as shall be appropriate, in the
reasonable judgment of counsel, to the Holders, to enable them to exercise
its
due diligence responsibility.
(h) The
Company shall use its reasonable best efforts to furnish to the Holders and
to
each such underwriter, if any, a signed counterpart, addressed to the Holders
or
such underwriter, of (i) an opinion or opinions of counsel to the Company
and (ii) a comfort letter or comfort letters from the Company’s independent
public accountants, each in customary form and covering such matters of the
kind
customarily covered by opinions or comfort letters, as the case may be, as
the
Holder and the underwriters reasonably request.
(i) Each
Holder shall promptly furnish in writing to the Company such information
regarding such Holder that is reasonably necessary for the distribution of
the
Registrable Securities as the Company may from time to time reasonably request
and such other information regarding such Holder as may be legally required
or
advisable in connection with such registration.
(j) Each
Holder agrees that, upon receipt of any notice from the Company of the happening
of any event of the kind described in Section 2.6(e),
such
Holder shall forthwith discontinue disposition of Registrable Securities
pursuant to the registration statement covering such Holder’s Registrable
Securities until such Holder’s receipt of the copies of the supplemented or
amended prospectus contemplated by Section 2.6(e),
and, if
so directed by the Company, such Holders shall destroy all copies, other than
any permanent file copies then in such Holder’s possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice. If the Company shall give such notice, the Company shall extend the
period during which such registration statement shall be maintained effective
(including the period referred to in Section 2.6(a))
by the
number of days during the period from and including the date of the giving
of
notice pursuant to Section 2.6(e)
to the
date when the Company shall make available to the Holders a prospectus
supplemented or amended to conform with the requirements of Section 2.6(e).
(k) The
Company shall use its reasonable best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange or quotation
system on which any of the Registrable Securities are then listed or
traded.
(l) The
Company shall have appropriate officers of the Company (i) prepare and make
presentations at any “road shows” and before analysts and rating agencies, as
the case may be, (ii) take other actions to obtain ratings for any
Registrable Securities and (iii) otherwise use their reasonable best
efforts to cooperate as reasonably requested by the underwriters in the
offering, marketing or selling of the Registrable Securities.
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13-
(m) The
Company shall use its reasonable best efforts to take all other steps necessary
to effect the registration of Registrable Securities contemplated
hereby.
Section
2.7 Registration
Restrictions.
Nothing
in this Agreement shall be construed as to violate the restrictions set forth
in
any of the Merger Agreements, the Stock Purchase Agreement or the Junior
Convertible Notes, and no registration of Registrable Securities in violation
of
such agreements shall be effectuated.
Section
2.8 Indemnification
by the Company.
In the
event of any registration of any securities of the Company under the Securities
Act pursuant to this Article
II,
the
Company will, and it hereby does, indemnify and hold harmless, to the full
extent permitted by law, each Holder, each Affiliate of such Holder and its
members and managing members (including any director, officer, Affiliate,
employee, agent and controlling person of any of the foregoing, if applicable),
each other person who participates as an underwriter in the offering or sale
of
such securities and each other person, if any, who controls such seller or
any
such underwriter within the meaning of the Securities Act (collectively, the
“Indemnified
Parties”),
against any and all losses, claims, damages or liabilities, joint or several,
and expenses (including reasonable attorney’s fees and reasonable expenses of
investigation) to which such Indemnified Party may become subject under the
Securities Act, common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof, whether or not
such Indemnified Party is a party thereto) arise out of or are based upon
(i) any untrue statement of any material fact contained in any registration
statement under which such securities were registered under the Securities
Act,
any preliminary, final or summary prospectus contained therein, or any amendment
or supplement thereto, or (ii) 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, in light of the circumstances under which they
were made) not misleading, and the Company will reimburse such Indemnified
Party
for any legal or any other expenses reasonably incurred by it in connection
with
investigating or defending against any such loss, claim, liability, action
or
proceeding; provided,
that
the
Company shall not be liable to any Indemnified Party in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding
in
respect thereof) or expense arises out of or is based upon any untrue statement
or omission made in such registration statement or amendment or supplement
thereto or in any such preliminary, final or summary prospectus in reliance
upon
and in conformity with written information furnished to the Company with respect
to such person through an instrument duly executed by such person specifically
stating that it is for use in the preparation thereof.
Section
2.9 Indemnification
by the Holders.
Each of
the Holders hereby agrees to indemnify and hold harmless, severally and not
jointly, the Company and all other prospective sellers of Registrable Securities
with respect to any untrue statement in, or omission from, any registration
statement that includes any Registrable Securities and that is filed in
accordance with this Article
II,
any
preliminary, final or summary prospectus contained therein, or any amendment
or
supplement, if such untrue statement or omission was made in reliance upon
and
in conformity with written information furnished to the Company with respect
to
such Holder through an instrument duly executed by such Holder or underwriter
specifically stating that it is for use in the preparation of such registration
statement, preliminary, final or summary prospectus or amendment or supplement,
or a document incorporated by reference into any of the foregoing. Such
indemnity shall remain in full force and effect, regardless of any investigation
made by or on behalf of the Company or the Holders, or any of their respective
Affiliates, directors, officers or controlling persons, and shall survive the
Transfer of such securities by such Holder. In no event shall the liability
of
any Holder hereunder be greater in amount than the dollar amount of the proceeds
received by such Holders upon the sale of the Registrable Securities giving
rise
to such indemnification obligation.
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Section
2.10 Conduct
of Indemnification Proceedings.
Promptly after receipt by an Indemnified Party hereunder of written notice
of
the commencement of any action or proceeding with respect to which a claim
for
indemnification may be made pursuant to this Article
II,
such
Indemnified Party will, if a claim in respect thereof is to be made against
an
indemnifying party, give written notice to the latter of the commencement of
such action; provided,
that
the
failure of the Indemnified Party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under this Article
II,
except
to the extent that the indemnifying party is actually prejudiced by such failure
to give notice. In case any such action is brought against an Indemnified Party,
unless in such Indemnified Party’s reasonable judgment a conflict of interest
between such Indemnified Party and indemnifying parties may exist in respect
of
such claim, the indemnifying party will be entitled to participate in and to
assume the defense thereof, jointly with any other indemnifying party similarly
notified to the extent that it may wish, with counsel reasonably satisfactory
to
such Indemnified Party, and after notice from the indemnifying party to such
Indemnified Party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such Indemnified Party for any legal
or
other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party will consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof, the giving by the claimant
or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation.
Section
2.11 Contribution.
If the
indemnification provided for in this Article
II
from the
indemnifying party is unavailable to an Indemnified Party hereunder in respect
of any losses, claims, damages, liabilities or expenses referred to herein,
then
the indemnifying party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages, liabilities or expenses in such proportion
as
is appropriate to reflect the relative fault of the indemnifying party and
Indemnified Parties in connection with the actions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
Indemnified Parties shall be determined by reference to, among other things,
whether any action in question, including any untrue of a material fact or
omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or Indemnified Parties, and the parties’
relative intent, knowledge, access to information and opportunity to correct
or
prevent such action. The amount paid or payable by a party under this
Section 2.11
as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or proceeding.
In no
event shall the liability of any Holder hereunder be greater in amount than
the
dollar amount of the proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification
obligation.
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The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 2.11
were
determined by pro
rata
allocation or by any other method of allocation which does not take account
of
the equitable considerations referred to in the immediately preceding paragraph.
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.
Section
2.12 Underwritten
Offering.
(a) A
Holder
may not participate in any Underwritten Offering hereunder unless such Holder
(i) agrees to sell its securities on the basis provided in any underwriting
arrangements approved by the Holders with respect to any Underwritten Offering
pursuant to Section 2.1,
or by
the Company with respect to any Underwritten Offering pursuant to Section
2.3
and
(B) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements and the provisions of this
Agreement in respect of registration rights.
(b) If
Registrable Securities are to be sold in an Underwritten Offering, the Company
agrees to include in the registration statement to be used all such information
as may be reasonably requested by the underwriters for the marketing and sale
of
such Registrable Securities.
Section
2.13 Other
Indemnification.
Indemnification similar to that specified herein (with appropriate
modifications) shall be given by the Company and a Holder participating therein
with respect to any required registration or other qualification of securities
under any federal or state law or regulation or Governmental Authority other
than the Securities Act.
Section
2.14 Rule
144 Information/Exchange Act Reporting.
With
(i) a view to making available the benefits of certain rules and
regulations of the SEC which may at any time permit the sale of the Registrable
Securities to the public without registration, and (ii) to keep any
registration statement on Form S-3 filed pursuant hereto effective, the Company
agrees to: (a) make and keep public information available, as those terms
are understood and defined in Rule 144 under the Securities Act; (b) file
with the SEC in a timely manner all reports and other documents required of
the
Company under the Securities Act and the Exchange Act; and (c) furnish to
each Holder of Registrable Securities forthwith upon request a written statement
by the Company as to its compliance with the reporting requirements of Rule
144
and of the Securities Act and the Exchange Act, a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents so
filed by the Company as such Holder may reasonably request in availing itself
of
any rule or regulation of the SEC allowing such Holder to sell any Registrable
Securities without registration.
Section
2.15 Parties
in Interest.
Each
Holder shall be entitled to receive the benefits of this Agreement and shall
be
bound by the terms and provisions of this Agreement by reason of its election
to
participate in a registration under this Article
II.
Any
transferee of the Registrable Securities shall be entitled to receive the
benefits of this Agreement and shall be bound by the terms and provisions of
this Agreement upon becoming bound hereby pursuant to Section 3.7.
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16-
Section
2.16 Mergers,
Recapitalizations, Exchanges or Other Transactions Affecting Registrable
Securities.
The
provisions of this Agreement shall apply to the full extent set forth herein
with respect to the Registrable Securities, to any and all securities or capital
stock of the Company or any successor or assign of any such person (whether
by
merger, amalgamation, consolidation, sale of assets or otherwise) that may
be
issued in respect of, in exchange for, or in substitution of such Registrable
Securities, by reason of any dividend, split, issuance, reverse split,
combination, recapitalization, reclassification, merger, amalgamation,
consolidation or otherwise.
Section
2.17 Registration
Expenses.
The
Company shall pay all Registration Expenses promptly upon request for payment
or
reimbursement therefore in connection with any registration, request for
registration, or Underwritten Offering of Registrable Securities hereunder.
The
obligation to pay the Registration Expenses shall apply irrespective of whether
a registration, once properly demanded, becomes effective, is delayed, withdrawn
or suspended, or, in the case of an Underwritten Offering, is
consummated.
Section
2.18 No
Inconsistent Agreements.
The
Company has not and shall not enter into any agreement with respect to the
Company’s securities that is inconsistent with the rights granted to the Holders
under this Agreement or that otherwise conflicts with the provisions hereof.
The
Company represents and warrants that it is not a party to, or otherwise subject
to, any other agreement granting registration rights to any other Person with
respect to any Common Stock or Common Stock equivalents. Unless otherwise
consented to in writing by holders of a majority of the Registrable Securities
held by the Holders, the following terms shall apply to any grant by the Company
to any person (an “Other
Demanding Party”)
of any
right to initiate (an “Other
Demand Right”)
the
registration of any Common Stock or Common Stock equivalents (a “Registration”);
provided
that the Company may amend this Agreement to make any person who receives shares
of Common Stock in connection with the transactions contemplated pursuant to
the
Merger Agreements, the Stock Purchase Agreement or the Equity Financing a
“Holder” under the terms of this Agreement:
(i) no
Other
Demand Right shall be granted that will permit an Other Demanding Party the
right to demand a Registration at any time prior to the date that is one (1)
year from the date of the closing of the transactions contemplated pursuant
to
the Ad Authority Stock Purchase Agreement;
(ii) in
connection with any Other Demand Right, the Holders will have the right to
piggyback on any such Registration, and if a Registration pursuant to an Other
Demand Right involves an Underwritten Offering and for whatever reason the
number of shares requested to be included in such registration exceeds the
Maximum Offering Size (or such lesser amount as required by applicable law,
as
determined by the Company in its sole discretion), then the Other Demanding
Party shall have priority in such registration; and
(iii) if
the
Company so elects, the Other Demanding Party may be provided with the right
to
piggyback on any Demand Registration pursuant to Section 2.2
hereof
and if any such Registration involves an Underwritten Offering and for whatever
reason the number of shares requested to be included in such registration
exceeds the Maximum Offering Size (or such lesser amount as required by
applicable law, as determined by the Company in its sole discretion), then
the
Other Demanding Party shall be given equal priority on a pro
rata
basis,
based on the number of shares held by such persons and available for sale in
such sale with the “other Holders” or “other persons” pursuant to Section
2.2(a)(ii)
or
Section
2.4(a)(iii).
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ARTICLE
III
MISCELLANEOUS
Section
3.1 Term of the Agreement; Termination of Certain
Provisions.
(a) The
term
of this Agreement shall continue until such time as no Registrable Securities
are held by any Holder, except that Sections
2.8,
2.9,
2.10,
2.11,
3.2
and
Section 3.3
shall
survive.
(b) Unless
this Agreement is theretofore terminated pursuant to Section 3.1(a) hereof,
each Holder shall be bound by the provisions of this Agreement with respect
to
any of its Registrable Securities until such time as such Holder ceases to
hold
any Registrable Securities. Thereafter, such Holder shall no longer be bound
by
the provisions of this Agreement.
Section
3.2 Amendments;
Waiver
(a) Subject
to the limitations set forth in Section 3.2(b),
the
provisions of this Agreement may be amended only by the mutual agreement of
the
Company and the holders of a majority of the Registrable
Securities.
(b) Any
amendment of this Agreement that may adversely affect the rights of the Holders
shall require the approval of each of the Holders so adversely affected,
respectively.
(c) No
provision of this Agreement may be waived except by an instrument in writing
executed by the party against whom the waiver is to be effective.
(d) Notwithstanding
anything herein to the contrary, the Company may amend this Agreement and the
Schedules hereto to (i) make any person who receives shares of Common Stock
in
connection with the transactions contemplated pursuant to the Merger Agreements,
the AAA Stock Purchase Agreement, the Ad Authority Stock Purchase Agreement
or
the Equity Financing a “Holder” under the terms of this Agreement, (ii)
designate each such Holder as “Acquisition Holder,” “Ad Authority Holder,”
“Investor Holder” or “Original Holder” in accordance with the terms of this
Agreement and (iii) amend Schedules A,
B,
C
and/or
D
to this
Agreement accordingly.
Section
3.3 Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL
SUBSTANTIVE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE
OF
LAW OR CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
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Section
3.4 Notices.
(a) Any
communication, demand or notice to be given hereunder will be duly given (and
shall be deemed to be received) when delivered in writing by hand or first
class
mail or by facsimile to a party at its address as indicated below:
If
to
the Company:
Morlex,
Inc.
c/▇
▇▇▇▇▇▇ Capital LLC
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
President
Telephone:
(▇▇▇)▇▇▇-▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
with
a
copy (which shall not constitute notice to the Company) to:
▇▇▇▇▇
Peabody LLP
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇▇, Esq. and ▇▇▇▇▇ ▇▇▇▇, Esq.
Telephone:
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇; and
If
to
a Holder:
to
the
address and facsimile set forth in the records of the Company.
(b) Unless
otherwise provided to the contrary herein, any notice which is required to
be
given in writing pursuant to the terms of this Agreement may be given by
facsimile.
Section
3.5 Severability.
If any
provision of this Agreement is finally held to be invalid, illegal or
unenforceable, (a) the remaining terms and provisions hereof shall be
unimpaired and (b) the invalid or unenforceable term or provision shall be
deemed replaced by 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.
Section
3.6 Specific
Performance.
Each
party hereto acknowledges that the remedies at law of the other parties for
a
breach or threatened breach of this Agreement would be inadequate and, in
recognition of this fact, any party to this Agreement, without posting any
bond,
and in addition to all other remedies that may be available, shall, subject
to
Section 3.3,
be
entitled to obtain equitable relief in the form of specific performance, a
temporary restraining order, a temporary or permanent injunction or any other
equitable remedy that may be then available.
Section
3.7 Assignment;
Successors.
This
Agreement shall be binding upon and inure to the benefit of the respective
legatees, legal representatives, successors and assigns of each Holder;
provided,
however,
that a
Holder may not assign this Agreement or any of his rights or obligations
hereunder, except pursuant to Section 2.15,
and any
purported assignment in breach hereof by a Holder shall be void; and provided
further that no assignment of this Agreement by the Company or to a successor
of
the Company (by operation of law or otherwise) shall be valid unless such
assignment is made to a person which succeeds to the business of such person
substantially as an entirety.
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19-
Section
3.8 No
Third-Party Rights.
Other
than as expressly provided herein, nothing in this Agreement will be construed
to give any person other than the parties to this Agreement any legal or
equitable right, remedy, or claim under or with respect to this Agreement or
any
provision of this Agreement. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this
Agreement and their successors and assigns.
Section
3.9 Section
Headings.
The
headings of sections in this Agreement are provided for convenience only and
will not affect its construction or interpretation.
Section
3.10 Execution
in Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed an original, but all such counterparts shall together constitute but
one
and the same instrument.
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20-
IN
WITNESS WHEREOF, the parties hereto have duly executed or caused to be duly
executed this Agreement as of the dates indicated.
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By:
|
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
|
|
Name:
|
|
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Title:
|
Chief
Executive Officer
|
Signature
Page to First Amended and Restated Registration Rights
Agreement
SCHEDULE
A
ACQUISITION
HOLDERS
Such
exhibit is on file with the Company’s records.
SCHEDULE
B
AD
AUTHORITY HOLDERS
Such
exhibit is on file with the Company’s records.
SCHEDULE
C
INVESTOR
HOLDERS
Such
exhibit is on file with the Company’s records.
SCHEDULE
D
ORIGINAL
HOLDERS
Such
exhibit is on file with the Company’s records.
SCHEDULE
E
HOLDERS
SIGNATORIES TO THE ORIGINAL REGISTRATION RIGHTS AGREEMENT
Such
exhibit is on file with the Company’s records.