REGISTRATION RIGHTS AGREEMENT by and among CRUMBS BAKE SHOP, INC. and JULIAN R. GEIGER Dated as of November 14, 2011

Exhibit 10.6
Execution Copy
by and among
CRUMBS BAKE SHOP, INC.
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Dated as of November 14, 2011

 

 

 

TABLE OF CONTENTS
         
    Page  
 
        
1. RESTRICTIONS AND DEFINITIONS
     1  
 
        
1.1 Certain Restrictions
     1  
1.2 Definitions
     1  
 
        
2. REGISTRATION RIGHTS
     4  
 
        
2.1 Demand Registration
     4  
2.2 Piggy-Back Registration
     6  
2.3 Shelf Registration
     8  
2.4 Underwritten Offerings
     10  
 
        
3. REGISTRATION PROCEDURES
     11  
 
        
3.1 Filings; Information
     11  
3.2 Obligation to Suspend Distribution
     15  
3.3 Registration Expenses
     15  
3.4 Information
     16  
 
        
4. INDEMNIFICATION AND CONTRIBUTION
     16  
 
        
4.1 Indemnification by the Company
     16  
4.2 Indemnification by the Selling Holder
     16  
4.3 Conduct of Indemnification Proceedings
     17  
4.4 Contribution
     17  
4.5 State Securities Laws
     18  
4.6 Non-Exclusivity
     18  
4.7 Survival
     18  
 
        
5. UNDERWRITING AND DISTRIBUTION
     18  
 
        
5.1 Rule 144
     18  
5.2 Due Diligence
     18  
 
        
6. MISCELLANEOUS
     19  
 
        
6.1 Other Registration Rights
     19  
6.2 Assignment; Assumption
     19  
6.3 Notices
     20  
6.4 Severability
     20  
6.5 Counterparts
     20  
6.6 Entire Agreement
     21  
6.7 Modification and Amendment; Further Assurances
     21  
6.8 Titles and Headings
     21  
6.9 Interpretation
     21  
6.10 Waivers and Extensions
     21  
6.11 Specific Performance; Remedies Cumulative
     21  
6.12 Governing Law
     21  
6.13 Waiver of Trial by Jury
     22  
6.14 Exchange Agreement Matters
     22  

 

i

 

THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is entered into as of November 14, 2011, between Crumbs Bake Shop, Inc., formerly known as ▇▇▇▇ ▇▇▇▇▇▇ General Acquisition Corp., a Delaware corporation (the “Company”), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the “Executive”).
WHEREAS, the Company, Crumbs Holdings LLC, a Delaware limited liability company and non-wholly owned subsidiary of the Company (“Crumbs”), and the Executive are entering into that certain Employment Agreement, dated as of the date hereof (the “Employment Agreement”);
WHEREAS, in connection with the Employment Agreement, the Company and the Executive are entering into that certain Securities Grant Agreement, dated as of the date hereof (the “Securities Grant Agreement”), pursuant to which the Executive is being issued (i) 799,000 New Crumbs Class B Exchangeable Units of Crumbs (the “Granted Class B Units”), (ii) 79,900 shares of Series A Voting Preferred Stock of the Company (the “Series A Preferred Stock”) and hereafter may be issued (iii) up to 901,000 Class B Exchangeable Units (the “Contingent Class B Units”, and together with the Granted Class B Units, the “Class B Exchangeable Units”) and up to 90,100 shares of Series A Preferred Stock, subject to the achievement of certain performance targets as described in the Securities Grant Agreement;
WHEREAS, pursuant to the Employment Agreement and Securities Grant Agreement, the Company has agreed to grant the Executive the registration rights and other rights set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. RESTRICTIONS AND DEFINITIONS.
1.1 Certain Restrictions. The rights set forth in this Agreement with respect to any Registrable Securities shall be subject to any lock-up agreements applicable to such Registrable Securities set forth in the Securities Grant Agreement.
1.2 Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings ascribed thereto in the Business Combination Agreement. The following capitalized terms used herein have the following meanings:
“Affiliate” means, with respect to any Person, any Person, directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with such Person,
“Agreement” means this Agreement, as it may be amended, restated, supplemented, or otherwise modified from time to time.
“Automatic Shelf Registration Statement” shall mean a Registration Statement filed by the Company when it is a WKSI and which shall become effective upon filing thereof pursuant to General Instruction I.D. of Form S-3.
“Business Combination Agreement” means that certain Business Combination Agreement, dated as of January 9, 2011, by and among the Company, ▇▇▇▇ ▇▇▇▇▇▇ Merger Sub LLC, a Delaware limited liability company, Crumbs, the members of Crumbs set forth on the signature pages thereto, and the representatives of Crumbs and the Members, as amended from time to time.

 

 

 

“Business Day” means any day on which the principal offices of the Commission in Washington, D.C. are open to accept filings, or, in the case of determining a date when any payment is due, any day on which banks are not required or authorized to close in the State of Delaware.
“Class B Exchangeable Units” is defined in the recitals.
“Commission” means the Securities and Exchange Commission, or any other Federal agency then administering the Securities Act or the Exchange Act.
“Common Stock” means the Common Stock, par value $0.0001 per share, of the Company.
“Company” is defined in the preamble.
“Contingent Class B Units” is defined in the recitals.
“Crumbs” is defined in the recitals.
“Demand Registration” is defined in Section 2.1.1.
“Demanding Holder” is defined in Section 2.1.5.
“Demand Notice” is defined in Section 2.1.1.
“Demand Shelf Takedown Notice” is defined in Section 2.3.4.
“Determination Date” is defined in Section 2.3.2.
“Employment Agreement” is defined in the recitals.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.
“Exchange Agreement” means the Exchange and Support Agreement, dated as of May 5, 2011, by and among the Company, Crumbs and the other parties signatory thereto.
“Executive” is defined in the preamble.
“Existing Registration Rights Agreement” means the Registration Rights Agreement dated May 5, 2011, by and among the Company, the Member Holders (as defined therein), the Sponsor (as defined therein), the Underwriter Holders (as defined therein) and the Expense Holders (as defined therein).
“FINRA” means the Financial Industry Regulatory Authority, Inc.
“Follow-On Registration Notice” is defined in Section 2.3.3.
“Follow-On Shelf” is defined in Section 2.3.3.
“Form S-3” is defined in Section 2.3.1.
“Granted Class B Units” is defined in the recitals.

 

2

 

“Holder” means the Executive and any Joining Stockholder permitted by Section 6.2 hereof.
“Holder Indemnified Party” is defined in Section 4.1.
“Indemnified Party” is defined in Section 4.3.
“Indemnifying Party” is defined in Section 4.3.
“Joining Stockholder” is defined in Section 6.2.1.
“Lock-Up Period” is defined in Section 2.4.1.
“Maximum Number of Shares” is defined in Section 2.1.5.
“New Issuer” is defined in Section 6.2.2.
“New Securities” is defined in Section 6.2.2.
“Notices” is defined in Section 6.3.
“Other Demand Holders” is defined in Section 2.1.5.
“Other Holders” is defined in Section 2.3.1.
“Participating Holder” is defined in Section 2.1.1.
“Person” means and includes an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an association, an unincorporated organization, a governmental authority and any other entity.
“Piggy-Back Registration” is defined in Section 2.2.1.
“Pro Rata” is defined in Section 2.1.5.
“Register,” “Registered” and “Registration” mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.
“Registrable Securities” means the following securities issued or issuable by the Company from time to time, namely: (i) any shares of Common Stock issued or issuable upon the exchange of any Granted Class B Units, (ii) upon their issuance pursuant to the provisions of the Securities Grant Agreement, any shares of Common Stock issued or issuable upon the exchange of any Contingent Class B Units and (iii) any securities issued or issuable with respect to such Registrable Securities by way of a split, dividend, or other division of securities, or in connection with a combination of securities, conversion, exchange, replacement, recapitalization, merger, consolidation, or other reorganization or otherwise, in each case held or beneficially owned by the Holder or any other Person or Persons; provided, that such Registrable Securities shall cease to be or shall not be considered Registrable Securities (a) upon the sale of such Registrable Securities pursuant to a Registration Statement or Rule 144 under the Securities Act (or any similar provision then in force) (“Rule 144”), (b) upon repurchase by the Company, (c) with respect to the Registrable Securities held by a Person, when such Person is permitted to sell such Registrable Securities under 144(b)(1), or (d) when they otherwise cease to be outstanding.

 

3

 

“Registration Statement” means a registration statement filed by the Company with the Commission in compliance with the Securities Act and the rules and regulations promulgated thereunder for a public offering and sale of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities (other than a registration statement on Form S-4 or Form S-8, or their successors, or any registration statement covering only securities proposed to be issued in exchange for securities or assets of another entity).
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder, all as the same shall be in effect at the time.
“Securities Grant Agreement” is defined in the recitals.
“Selling Holder” is defined in Section 4.1.
“Series A Preferred Stock” is defined in the recitals.
“Shelf Demand Notice” is defined in Section 2.3.1.
“Shelf Registration” is defined in Section 2.3.1.
“Underwriter” means a securities dealer registered under the Exchange Act who purchases any Registrable Securities as principal in an underwritten offering and not as part of such dealer’s market-making activities.
“Underwritten Offering” is defined in Section 2.4.1.
“Underwritten Shelf Takedown” is defined in Section 2.3.4.
“WKSI” means a “well-known seasoned issuer” as defined in Rule 405 under the Securities Act.
2. REGISTRATION RIGHTS.
2.1 Demand Registration.
2.1.1 Request for Registration. At any time beginning six (6) months after the date hereof, the Holder may, subject to the provisions of this Agreement, the Employment Agreement and the Securities Grant Agreement, make a written demand (a “Demand Notice”) that the Company effect the registration under the Securities Act for resale of any or all of the Registrable Securities held or beneficially owned by the Holder (a “Demand Registration”), which Demand Notice shall specify (i) the type and number of Registrable Securities proposed to be registered; (ii) the intended method or methods and plan of disposition thereof, including whether such requested registration is to involve an underwritten offering; and (iii) the proposed date that such registration shall be effective; provided, however, that such proposed date shall be at least ninety (90) days after the date such notice has been delivered to the Company unless the Company permits a shorter notice period. The Company will notify all holders of Registrable Securities who have piggyback registration rights that are then exercisable under the Existing Registration Rights Agreement of the demand initiated by the Holder, and each such holder who wishes to include all or a portion of its Registrable Securities in the Demand Registration (each such holder including Registrable Securities in such registration, a “Participating Holder”) shall so notify the Company within fifteen (15) days after the receipt by the holder of the notice from the Company. Upon any such request, the Participating Holders shall be entitled to have their Registrable Securities included in the Demand Registration, subject to Section 2.1.5. and the provisos set forth in Section 3.1.1.

 

4

 

2.1.2 Number of Demand Registrations. The Company shall not be obligated to effect more than two (2) Demand Registrations (not counting Shelf Registrations (except for Underwritten Shelf Takedowns) or Piggyback Registrations) at the request of the Holder in accordance with Section 2.1.
2.1.3 Effective Registration. A registration will not count as a Demand Registration until the Registration Statement filed with the Commission with respect to such Demand Registration has been declared effective and the Company has complied with all of its obligations under this Agreement with respect thereto; provided, however, that if, after such Registration Statement has been declared effective, the offering of Registrable Securities pursuant to a Demand Registration is interfered with by any stop order or injunction of the Commission or any other governmental agency or court, the Registration Statement with respect to such Demand Registration will be deemed not to have been declared effective, unless and until (i) such stop order or injunction is removed, rescinded or otherwise terminated, and (ii) the Holder thereafter elects to continue the offering; provided, further, that the Company shall not be obligated to file a second Registration Statement until a Registration Statement that has been filed is counted as a Demand Registration or is terminated.
2.1.4 Underwritten Offering. With respect to a Demand Registration, if the Holder so elects and so advises the Company as part of its Demand Notice, the offering of such Registrable Securities pursuant to such Demand Registration shall be in the form of an underwritten offering. In such event, the right of the Holder to include its Registrable Securities in such registration shall be conditioned upon the Holder’s participation in such underwriting and the inclusion of the Holder’s Registrable Securities in the underwriting. If the Holder proposes to distribute its Registrable Securities through such underwriting, the Holder shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such underwriting by the Holder.
2.1.5 Reduction of Offering. If the managing Underwriter or Underwriters for a Demand Registration that is to be an underwritten offering advises the Company and the Holder in writing that the dollar amount or number of shares of Registrable Securities which the Holder and the Participating Holders desire to sell, taken together with all securities which the Company desires to sell and the securities, if any, as to which registration has been requested pursuant to written contractual piggy-back registration rights held by other stockholders of the Company who desire to sell, exceeds the maximum dollar amount or maximum number of shares that can be sold in such offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of shares, as applicable, the “Maximum Number of Shares”), then the Company shall include in such registration: (i) first, the Registrable Securities as to which Demand Registration has been requested by the Holder (the “Demanding Holder”) and any other holder of Registrable Securities who has demand registration rights that are then exercisable pursuant to the Existing Registration Rights Agreement (the “Other Demand Holders”) (as determined pro rata in accordance with the number of Registrable Securities that the Demanding Holder and the Other Demand Holders have requested be included in such registration, regardless of the number of shares held or beneficially owned by each of the Demanding Holder and the Other Demand Holders (such proportion is referred to herein as “Pro Rata”)), (ii) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (i), the Sponsor Shares, Insider Shares and Expense Shares (each as defined in the Existing Registration Rights Agreement) that the holders of such shares desire to include in such offering that can be sold without exceeding the Maximum Number of Shares (determined Pro Rata); (iii) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (i) and (ii), the securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; and (iv) fourth, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (i), (ii) and (iii), the securities for the account of other Persons that the Company is obligated to register pursuant to written contractual piggy-back registration rights held by other stockholders of the Company (other than the Sponsor (as defined in the Existing Registration Rights Agreement)) and that can be sold without exceeding the Maximum Number of Shares.

 

5

 

2.1.6 Withdrawal. Pursuant to a written request, the Demanding Holder may, at any time prior to the effective date of the Registration Statement relating to any requested registration, withdraw its Registrable Securities from a requested registration, without liability to the withdrawing Demanding Holder. If all Registrable Securities are so withdrawn, the Company shall cease all efforts to effect such registration upon such request, without liability to the Demanding Holder. If the Demanding Holder withdraws from a proposed offering relating to a Demand Registration, then such registration shall not count as a Demand Registration for the purposes of Section 2.1. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the Demanding Holder in connection with such Demand Registration as provided in Section 3.3.
2.2 Piggy-Back Registration.
2.2.1 Piggy-Back Rights. If at any time the Company proposes to file a Registration Statement under the Securities Act with respect to any offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into, equity securities, by the Company for its own account or for security holders of the Company for their account (or by the Company and by security holders of the Company including, without limitation, pursuant to Sections 2.1 or 2.3), other than a Registration Statement filed on Forms S-4 or S-8, or successor forms, and other than an amendment to, or replacement registration statement covering the securities registered on, the Registration Statement on Form S-3 filed by the Company on July 8, 2011, and as thereafter amended, registering shares for issuance in acquisitions or pursuant to equity incentive plans, then the Company shall (x) give written notice of such proposed filing to the Holder as soon as practicable but in no event less than ten (10) Business Days before the anticipated filing date, which notice shall describe the amount and type of securities to be included in such offering, the intended method(s) of distribution, and the name of the proposed managing Underwriter or Underwriters, if any, of the offering, and (y) offer to the Holder in such notice the opportunity to register the sale of such number of shares of Registrable Securities as the Holder may request in writing within five (5) Business Days following receipt of such notice (a “Piggy-Back Registration”). The Company shall cause such Registrable Securities to be included in such registration and shall cause the managing Underwriter or Underwriters of a proposed underwritten offering to offer the Registrable Securities requested to be included in a Piggy-Back Registration on the same terms and conditions as the Common Stock or any similar securities of the Company and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. If the Holder proposes to distribute its securities through a Piggy-Back Registration that involves an Underwriter or Underwriters, the Holder shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such Piggy-Back Registration.
2.2.2 Reduction of Offering. If the managing Underwriter or Underwriters for a Piggy-Back Registration that is to be an underwritten offering advises the Company and the Holder in writing that it has determined in good faith that the dollar amount or number of securities which the Company desires to sell, taken together with the Registrable Securities as to which registration has been requested under this Section 2.2, and the securities, if any, as to which registration has been requested pursuant to the written contractual piggy-back registration rights of other stockholders of the Company, exceeds the Maximum Number of Shares, then the Company shall include in any such registration:
(a) If the registration is undertaken for the Company’s account: (i) first, the securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; (ii) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (i), the Common Stock or other securities, if any, comprised of Registrable Securities held by the Holder and Other Demand Holders as to which registration has been requested, that can be sold without exceeding the Maximum Number of Shares (as determined Pro Rata); (iii) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (i) and (ii), the Registrable Securities held by other holders of Registrable Securities (as determined Pro Rata); and (iv) fourth, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (i), (ii) and (iii), the Common Stock or other securities for the account of other Persons that the Company is obligated to register pursuant to written contractual piggy-back registration rights with such Persons and that can be sold without exceeding the Maximum Number of Shares.

 

6

 

(b) If the registration is undertaken for the Holder’s account other than pursuant to a Demand Registration as to which Section 2.1.5 applies: (i) first, the securities that the Holder and the Other Demand Holders desire to sell that can be sold without exceeding the Maximum Number of Shares (as determined Pro Rata); (ii) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (i), the Common Stock or other securities, if any, comprised of Registrable Securities as to which registration has been requested by the Company, that can be sold without exceeding the Maximum Number of Shares and (iii) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (i) and (ii), the Common Stock or other securities for the account of other Persons that the Company is obligated to register pursuant to written contractual piggy-back registration rights with such Persons and that can be sold without exceeding the Maximum Number of Shares.
(c) If the registration is a “demand” registration undertaken at the demand of Persons other than the Holder, (i) first, among the Common Stock or other securities, if any, comprised of such securities pursuant to the applicable demand registration, all the Registrable Securities held by the Holder and the Other Demand Holders as to which registration has been requested pursuant to the applicable written contractual piggy-back registration rights of such security holders that can be sold without exceeding the Maximum Number of Shares (determined Pro Rata); (ii) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (i), the securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; and (iii) third to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (i) and (ii), the securities for the account of other Persons that the Company is obligated to register pursuant to written contractual piggy-back registration rights with such Persons and that can be sold without exceeding the Maximum Number of Shares.
2.2.3 Withdrawal. The Holder may elect to withdraw the Holder’s request for inclusion of Registrable Securities in any Piggy-Back Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness of the Registration Statement. The Company (whether on its own determination or as the result of a withdrawal by Persons making a demand pursuant to written contractual obligations) may withdraw a Registration Statement with respect to a Piggy Back Registration at any time prior to the effectiveness of such Registration Statement upon giving written notice to the participating holders of Registrable Securities; provided, that such withdrawal will be without prejudice to the right of the Holder to immediately request that such registration be effected as a Demand Registration under Section 2.1 to the extent permitted thereunder. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the Holder in connection with such Piggy-Back Registration as provided in Section 3.3.

 

7

 

2.3 Shelf Registration.
2.3.1 Shelf Registration Rights. At any time beginning six (6) months after the date hereof, the Holder may request in writing (the “Shelf Demand Notice”) that the Company register for resale any or all of Registrable Securities held or beneficially owned by the Holder in an offering to be made pursuant to Rule 415 under the Securities Act (or any similar rule that may be adopted by the SEC covering such Registrable Securities) (a “Shelf Registration”) by filing a shelf registration statement on Form S-3 or any similar short-form registration which may be available at such time (“Form S-3”) or, if Form S-3 is not available, on any other appropriate form. If Form S-3 is not available, the Company shall use its commercially reasonable efforts to convert any Shelf Registration that is on a Form S-1 (including any Follow-On Shelf) to a Registration Statement on Form S-3 as soon as practicable after the Company is eligible to use Form S-3. Upon receiving a Shelf Demand Notice, the Company will promptly give written notice of the proposed Shelf Registration to all holders of Registrable Securities with piggyback rights which allow such holder to include securities on such registration statement (“Other Holders”), and each such Other Holder who wishes to include all or a portion of such holder’s Registrable Securities in the Shelf Registration shall so notify the Company within ten (10) Business Days after the receipt by such Other Holder of the notice from the Company. The Company shall use commercially reasonable efforts to effect such Shelf Registration by filing a Form S-3 or such other appropriate form, if applicable, as soon as practicable, and effect the registration of all or such portion of the Holder’s Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities or other securities of the Company, if any, or any Other Holders joining in such request as are specified in a written request given within thirty (30) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to effect any such registration pursuant to this Section 2.3.1 if the holders of the Registrable Securities, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to register Registrable Securities and such other securities (if any) at any aggregate price to the public of less than $1,000,000. Except for Underwritten Shelf Takedowns effected pursuant to Section 2.3.4 as provided below, Shelf Registrations shall not be counted as Demand Registrations effected pursuant to Section 2.1. If any Registrable Securities remain issued and outstanding after three (3) years following the initial effective date of such Shelf Registration, the Company shall, prior to the expiration of such Shelf Registration, file a new Shelf Registration covering such Registrable Securities and shall thereafter use its commercially reasonable efforts to cause to be declared effective as promptly as practical, such new Shelf Registration. The Company shall use its commercially reasonable efforts to maintain the effectiveness of the Shelf Registration in accordance with the terms hereof for so long as any Registrable Securities remain issued and outstanding.
2.3.2 Automatic Shelf Registration. Upon the Company becoming a WKSI, the Company shall (i) give written notice to the Holder as promptly as practicable but in no event later than twenty (20) days thereafter, and such notice shall describe, in reasonable detail, the basis on which Company has become a WKSI, and (ii) use commercially reasonable efforts to register, under an Automatic Shelf Registration Statement, the sale of all of the Registrable Securities in accordance with the terms of this Agreement. The Company shall use commercially reasonable efforts to file such Automatic Shelf Registration Statement as promptly as practicable and to cause such Automatic Shelf Registration Statement to remain effective thereafter until there are no longer any Registrable Securities registered on such Automatic Shelf Registration Statement. At any time after the filing of an Automatic Shelf Registration Statement by the Company, if the Company is no longer a WKSI (the “Determination Date”), within twenty (20) days after such Determination Date, the Company shall (A) give written notice thereof to the Holder and (B) file a Registration Statement on an appropriate form (or a post-effective amendment converting the Automatic Shelf Registration Statement to an appropriate form) covering all of the Registrable Securities in accordance with the terms of this Agreement, and use commercially reasonable efforts to have such Registration Statement declared effective as promptly as practicable after the date the Automatic Shelf Registration Statement is no longer useable by the Holder to sell its Registrable Securities.

 

8

 

2.3.3 Additional Selling Stockholders and Additional Registrable Securities.
(a) If the Company is not a WKSI within twenty (20) days after a written request by the Holder to register for resale any additional Registrable Securities held or beneficially owned by the Holder, the Company shall file a Registration Statement substantially similar to the Shelf Registration then effective, if any (each, a “Follow-On Shelf”), to register for resale such Registrable Securities. The Company shall give written notice (the “Follow-On Registration Notice”) of the filing of the Follow-On Shelf at least seven (7) days prior to filing the Follow-On Shelf to the Holder, if its Registrable Securities are not already the subject of a Shelf Registration, and shall include in such Follow-On Shelf all Registrable Securities with respect to which Company has received written requests for inclusion therein within ten (10) days after sending the Follow-On Registration Notice. Notwithstanding the foregoing, the Company shall not be required to file a Follow-On Shelf if (x) the aggregate amount of Registrable Securities requested to be registered on such Follow-On Shelf by the Holder that have not yet been registered represents less than $1,000,000, or (y) the Company has filed a Follow-On Shelf in the prior ninety (90) days. The Company shall use commercially reasonable efforts to cause such Follow-On Shelf to be declared effective as promptly as practicable and in any event within sixty (60) days of filing such Follow-On Shelf. Any Registrable Securities requested to be registered pursuant to this Section 2.3.3 that have not been registered on a Shelf Registration at the time the Follow-On Shelf is filed shall be registered pursuant to such Follow-On Shelf.
(b) If the Company is a WKSI, within five (5) Business Days after a written request by the Holder to register for resale any additional Registrable Securities owned by the Holder, the Company shall make all necessary filings to include such Registrable Securities in the Automatic Shelf Registration Statement filed pursuant to Section 2.3.2.
(c) If a Shelf Registration pursuant to Form S-3 or Automatic Shelf Registration Statement filed pursuant to Section 2.3 is effective, within five (5) Business Days after written request therefor by the Holder, the Company shall file a prospectus supplement or current report on Form 8-K to add the Holder as a selling stockholder in such Shelf Registration pursuant to Form S-3 or Automatic Shelf Registration Statement to the extent permitted under the rules and regulations promulgated by the Commission.
2.3.4 Requests for Underwritten Shelf Takedowns. At any time and from time to time after a Shelf Registration filed pursuant to Section 2.3 has been declared effective by the Commission, the Holder may, if participating in any Shelf Registration, request to sell all or any portion of its Registrable Shares 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, the Holder will be entitled to make such demand only if the total offering price of the Registrable Securities to be sold in such offering (including piggyback shares and before deduction of underwriting discounts) is reasonably expected to exceed, in the aggregate, $1,000,000. An Underwritten Shelf Takedown shall count against the allocation of Demand Registrations set forth in Section 2.1.2. All requests for Underwritten Shelf Takedowns shall be made by giving written notice to the Company (the “Demand Shelf Takedown Notice”) at least 15 days prior to the proposed date of such Underwritten Shelf Takedown. Each Demand Shelf Takedown Notice shall specify (i) the type and number of Registrable Securities proposed to be sold in the Underwritten Shelf Takedown; and (ii) the intended method or methods and plan of disposition thereof. In such event, the right of any holder to include its Registrable Securities in such Underwritten Shelf Takedown shall be conditioned upon such holder’s participation in such underwriting and the inclusion of such holder’s Registrable Securities in the underwriting. All holders proposing to distribute their Registrable Securities through such Underwritten Shelf Takedown shall enter into an underwriting agreement in customary form with the Underwriter or Underwriters selected for such underwriting by the Holder.

 

9

 

2.3.5 Reduction of Offering. If the managing Underwriter or Underwriters for an Underwritten Shelf Takedown advise the Company and the Holder in writing that the dollar amount or number of shares of Registrable Securities which the Holder desires to sell, taken together with all securities which the Company desires to sell and the securities, if any, as to which registration has been requested pursuant to written contractual piggy-back registration rights held by other stockholders of the Company who desire to sell, exceeds the Maximum Number of Shares then the Company shall include in such Underwritten Shelf Takedown: (i) first, the Registrable Securities as to which an Underwritten Shelf Takedown has been requested by the Holder or any Other Demand Holder that can be sold without exceeding the Maximum Number of Shares (as determined Pro Rata); (ii) second, to the extent that the Maximum Number of Shares has not been reached under the foregoing clause (i), the securities that the Company desires to sell that can be sold without exceeding the Maximum Number of Shares; and (iii) third, to the extent that the Maximum Number of Shares has not been reached under the foregoing clauses (i) and (ii), the securities for the account of other Persons that the Company is obligated to register pursuant to written contractual piggy-back registration rights held by other stockholders of the Company and that can be sold without exceeding the Maximum Number of Shares.
2.3.6 Withdrawal. The Holder may elect to withdraw its request for inclusion of Registrable Securities in any Shelf Registration or Underwritten Shelf Takedown, by giving written notice to the Company of such request to withdraw prior to the effectiveness of the Registration Statement. If holders of Registrable Securities holding or beneficially owning at least a majority in interest of the Registrable Securities included in a Shelf Registration withdraw from the Shelf Registration, the Company shall cease all efforts to effect such registration upon such request, without liability to the Holder. If holders of Registrable Securities requesting an Underwritten Shelf Takedown holding or beneficially owning at least a majority in interest of the Registrable Securities included in a such Underwritten Shelf Takedown withdraw from the Underwritten Shelf Takedown then such registration shall not count as a Demand Registration for the purposes of Section 2.1.2. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the Holder in connection with such Shelf Registration as provided in Section 3.3.
2.4 Underwritten Offerings.
2.4.1 Holders of Registrable Securities. In connection with any underwritten public offering of equity securities of the Company (an “Underwritten Offering”) as to which the Holder is included as a selling holder, if requested by the managing Underwriter for such Underwritten Offering, the Holder agrees to enter into a lock-up agreement, in addition to any other lock-up agreement then in effect with respect to Registrable Securities, containing customary restrictions on transfers of equity securities of the Company (except with respect to such securities as are proposed to be offered pursuant to the Underwritten Offering), or any securities convertible into or exchangeable or exercisable for such securities, for a period not greater than seven (7) days prior to and ninety (90) days after the date of pricing of such Underwritten Offering (subject to extension in connection with any earnings release or other release of material information pursuant to FINRA Rule 2711(f) to the extent applicable) (the “Lock-Up Period”); provided, that the Holder shall not be subject to the provisions hereof unless the Company’s directors, officers, and any other Persons participating in such offering shall have signed lock-up agreements containing substantially similar terms with the managing Underwriter and if any such Person shall be subject to a shorter lock-up period, receives more advantageous terms relating to the Lock-Up Period or receives a waiver of its lock-up period from the Company or an Underwriter, then the Lock-Up Period shall be such shorter period, on such more advantageous terms and shall receive the benefit of that waiver; provided, further, that nothing herein will prevent (i) the Holder, to the extent that it is a partnership, limited liability company or corporation, from making a distribution of Registrable Securities to the partners, members or stockholders thereof or a transfer to an Affiliate that is otherwise in compliance with the applicable securities laws, so long as such distributees or transferees agree to be bound by the restrictions set forth in this Section 2.4, (ii) the exercise, exchange or conversion of any security exercisable or exchangeable for, or convertible into, Common Stock; provided, that the Common Stock issued upon such exercise or conversion shall be subject to the restrictions set forth in this Section 2.4. The provisions of this Section 2.4 will no longer apply to the Holder once such Person ceases to hold Registrable Securities.

 

10

 

2.4.2 Company. In connection with any Underwritten Offering filed pursuant to this Agreement which includes the Holder as a selling holder (other than an Underwritten Offering under Section 2.2 as to which Registration was initiated by the Company and in which the Company sells any of its securities), if requested by the managing Underwriter for such Underwritten Offering, the Company shall not effect any public sale or distribution of its equity securities, or any securities convertible into or exchangeable or exercisable for such securities (except with respect to such securities as are proposed to be offered pursuant to such Underwritten Offering or pursuant to registrations on Form S-8 or Form S-4 under the Securities Act), during the seven (7) days prior to and the ninety (90) day period beginning on the date of pricing of such Underwritten Offering or such shorter period as is requested by such managing Underwriter (subject to extension in connection with any earnings release or other release of material information pursuant to FINRA Rule 2711(f) to the extent applicable).
3. REGISTRATION PROCEDURES.
3.1 Filings; Information. Whenever the Company is required to effect the registration of any Registrable Securities pursuant to Section 2, the Company shall use commercially reasonable efforts to effect the registration and sale of such Registrable Securities in accordance with the intended method(s) of distribution thereof as expeditiously as practicable, and in connection with any such request:
3.1.1 Filing Registration Statement. The Company shall use commercially reasonable efforts to, within forty-five (45) days after receipt of a request for a Demand Registration pursuant to Section 2, prepare and file with the Commission a Registration Statement on any form, for which the Company then qualifies and which counsel for the Company shall deem appropriate (to the extent that the Registration Statement is a Form S-1, Company shall use its commercially reasonable efforts to convert such Registration Station to a Registration Statement on Form S-3 as soon as practicable after the Company is eligible to use Form S-3) and which form shall be available for the sale of all Registrable Securities to be registered thereunder in accordance with the intended method(s) of distribution thereof, and shall use its commercially reasonable efforts to cause such Registration Statement to become effective as of the proposed date of effectiveness or as soon as practical thereafter and use its commercially reasonable efforts to keep it effective until all Registrable Securities to which such Demand Registration relates have been disposed, up to a maximum of 180 days (extended by any period during which a stop order or injunction of the Commission or any other governmental agency or court is in effect); provided, however, that the Company shall have the right to defer any Demand Registration for the shortest possible period of time (which such period may not be extended or renewed), up to sixty (60) days and any Piggy-Back Registration for such period as may be applicable to deferment of any demand registration to which such Piggy-Back Registration relates, in each case if the Company shall furnish to the Holder a certificate signed by the Chairman of the Board of Company stating that, in the good faith judgment of the Board of Directors of the Company, it would be materially detrimental to the Company and its stockholders for such Registration Statement to be effected prior to the expiration of such period. The combined postponement periods relating to all Demand Registrations in any twelve (12)-month period shall not exceed ninety (90) days. In determining whether the combined postponement periods have exceeded ninety (90) days pursuant to the preceding sentence, the postponement periods of all Demand Registrations shall be counted separately, even if they overlap.

 

11

 

3.1.2 Copies. The Company shall, as far in advance as practicable but at least five (5) days prior to filing a Registration Statement or prospectus, or any amendment or supplement thereto, furnish without charge to the Holder and the Holder’s legal counsel, copies of such Registration Statement as proposed to be filed, each amendment and supplement to such Registration Statement (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 such other documents as the Holder or the Holder’s legal counsel may request in order to facilitate the disposition of the Registrable Securities owned by the Holder.
3.1.3 Amendments and Supplements. The Company shall, as promptly as practicable, prepare and file with the Commission such amendments, including post-effective amendments, and supplements to such Registration Statement and the prospectus used in connection therewith as may be necessary to keep such Registration Statement effective and in compliance with the provisions of the Securities Act until all Registrable Securities and other securities covered by such Registration Statement have been disposed of in accordance with the intended method(s) of distribution set forth in such Registration Statement or such securities have been withdrawn or for any other reason, including but not limited to the filing of a post-effective amendment or supplement to conduct any underwritten shelf takedown.
3.1.4 Notification. After the filing of a Registration Statement, the Company shall promptly, and in no event more than two (2) Business Days after such filing, notify the Holder of such filing, and shall further notify the Holder promptly and confirm such advice in writing in all events within two (2) Business Days of the occurrence of any of the following: (i) when such Registration Statement becomes effective; (ii) when any post-effective amendment to such Registration Statement becomes effective; (iii) the issuance or threatened issuance by the Commission of any stop order (and the Company shall take all actions required to prevent the entry of such stop order or to remove it if entered); and (iv) any request by the Commission for any amendment or supplement to such Registration Statement or any prospectus relating thereto or for additional information or 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 the securities covered by such Registration Statement, 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 make available to the Holder any such supplement or amendment. In the case where the Company, in its sole discretion, believes that a confidentiality agreement is reasonably necessary, the Company shall not be obligated to provide to the Holder any information under this Section 3.1.4 until it receives an executed copy of a confidentiality agreement, in form reasonably requested by the Company, from the Holder.
3.1.5 State Securities Laws Compliance. The Company shall use its commercially reasonable efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holder (in light of its intended plan of distribution) may request, and promptly notify the Holder of the receipt of any notification with respect to the suspension of the qualification of Registrable Securities for sale or offer in any such jurisdiction, and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental 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 necessary or advisable to enable the Holder to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph or subject itself to taxation in any such jurisdiction.

 

12

 

3.1.6 Underwriting. The Company shall (i) enter into customary agreements (including, if applicable, an underwriting agreement in customary form), which agreements may contain such representations and warranties and covenants by the Company and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, including indemnification and contribution provisions substantially to the effect and to the extent provided in Section 4, and agreements as to the provision of opinions of counsel and accountants’ letters to the effect and to the extent provided in Section 3.1.9, and (ii) take such other actions as are reasonably required in order to expedite or facilitate the disposition of such Registrable Securities. The holders of Registrable Securities on whose behalf the Registrable Securities are to be distributed by such Underwriters shall be parties to any such underwriting agreement, the representations, warranties and covenants of the Company in any underwriting agreement which are made to or for the benefit of any Underwriters, to the extent applicable, shall also be made to and for the benefit of the holders of Registrable Securities included in such registration statement, and any or all of the conditions precedent to the obligations of such Underwriters under such underwriting agreement shall be conditions precedent to the obligations of such holders of Registrable Securities. The Holder shall not be required in any such underwriting agreement to make any representations or warranties to or agreements with the Company or the Underwriters other than representations, warranties or agreements regarding the Holder’s intended method of distribution and any other representations required by law.
3.1.7 Cooperation. The principal executive officer of the Company, the principal financial officer of the Company, the principal accounting officer of the Company and all other officers and members of the management of the Company shall cooperate fully in any offering of Registrable Securities hereunder, which cooperation shall include, without limitation, the preparation of the Registration Statement with respect to such offering and all other offering materials and related documents, and participation in meetings with Underwriters, attorneys, accountants and potential investors. In the case of an underwritten offering, the Company shall use its commercially reasonable efforts to have the senior executive officers of the Company available to participate in the customary “road show” presentations that may be reasonably requested by the managing Underwriter or Underwriters in any such underwritten offering at mutually agreeable times and locations and otherwise to facilitate, cooperate with, and participate in each proposed offering contemplated herein and customary selling efforts related thereto.
3.1.8 Records. The Company shall make available for inspection by the Holder, any Underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other professional retained by the Holder or any Underwriter, all financial and other records, pertinent corporate documents and properties of the Company, as shall be necessary to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors and employees to supply all information requested by any of them in connection with such Registration Statement.
3.1.9 Opinions and Comfort Letters. The Company shall furnish to the Holder in the event that it holds Registrable Securities included in any Registration Statement and, in an underwritten public offering, to any Underwriter, a signed counterpart, addressed to the Holder and such Underwriter (if any), of (i) any opinion of counsel to the Company dated the date of the closing under the underwriting agreement (if any) (or if such offering is not underwritten, dated the effective date of the Registration Statement) and (ii) any “cold comfort” letters dated as of the effective date of the Registration Statement and brought down to the date of closing under the underwriting agreement addressed to such underwriter and the Holder and signed by the independent public accountants who have audited the financial statements of the Company included in such Registration Statement, in each such case covering substantially the same matters with respect to such Registration Statement (and the prospectus included therein) as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in connection with the consummation of underwritten public offerings of securities and such other matters as the Holder may reasonably request and, in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements. In the event no legal opinion is delivered to any Underwriter, the Company shall furnish to the Holder in the event that it holds Registrable Securities included in such Registration Statement, at any time that the Holder elects to use a prospectus, an opinion of counsel to the Company consistent with the foregoing, including an opinion to the effect that the Registration Statement containing such prospectus has been declared effective and that no stop order is in effect.

 

13

 

3.1.10 Earnings Statement. The Company shall comply with all applicable rules and regulations of the Commission and the Securities Act, and make available to its stockholders, as soon as practicable, an earnings statement covering a period of twelve (12) months, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
3.1.11 Other Registration Procedures. The Company shall also:
(a) ensure that at the time of pricing the offering of any Registrable Securities, the Registration Statement, the prospectus or prospectus supplement included in such Registration Statement, as then in effect, and any free writing prospectus related thereto, includes all information reasonably necessary such that a seller of such Registrable Securities would not be liable under Section 12(a)(2) of the Securities Act, and such offering and the sale of such Registrable Securities in connection therewith would not constitute a violation of Section 17(a)(2) of the Securities Act;
(b) take all reasonable action to ensure that any free writing prospectus utilized in connection with any registration covered by this Agreement 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 and any free writing 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;
(c) use commercially reasonable efforts to obtain all appropriate registrations, permits and consents in connection therewith, and do any and all other acts and things (including, without limitation, commercially reasonable efforts to promptly remove any such suspension) which may be necessary or advisable to enable the Holder or other holders or any such underwriter to consummate the disposition in such jurisdictions of the Registrable Securities covered by such Registration Statement as reasonably requested;
(d) if requested by the Holder or the managing underwriter(s), use its commercially reasonable efforts to list all such Registrable Securities covered by such registration on each securities exchange and automated inter-dealer quotation system on which shares of Common Stock are then listed;
(e) furnish for delivery in connection with the closing of any offering of Registrable Securities pursuant to a registration effected pursuant to this Agreement unlegended certificates representing ownership of the Registrable Securities being sold in such denominations as shall be requested by the Holder or the underwriters, subject to receipt of undertakings by the Holder regarding compliance with the terms hereof;

 

14

 

(f) not later than the effective date of the applicable Registration Statement, provide (i) a transfer agent and registrar (if the Company does not already have such an agent), (ii) a CUSIP number for all Registrable Securities included in such Registration Statement and (iii) the applicable transfer agent with printed certificates for the Registrable Securities which are in a form eligible for deposit with the Depository Trust Company or other applicable clearing agency; and
(g) otherwise use its commercially reasonable efforts to comply with all applicable securities laws, including the rules and regulations of the Commission.
3.2 Obligation to Suspend Distribution. Upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.1.4(iii) or (iv), or, in the case of a resale registration on Form S-3 pursuant to Section 2.3 hereof or upon any suspension by the Company, pursuant to a written ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ compliance program adopted by the Company’s Board of Directors, of the ability of all “insiders” covered by such program to transact in the Company’s securities because of the existence of material non-public information, the Holder shall immediately discontinue disposition of such Registrable Securities pursuant to the Registration Statement covering such Registrable Securities until the Holder receives the supplemented or amended prospectus contemplated by Section 3.1.4(iv), or until the Holder is advised in writing by the Company that the then current prospectus may be used and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such prospectus or the restriction on the ability of “insiders” to transact in the Company’s securities is removed, as applicable. The Company shall provide the Holder and/or the managing underwriter, if any, with any such supplemented or amended prospectuses or additional or supplemental filings, as the case may be. Notwithstanding anything to the contrary in this Agreement, the Company shall not exercise its rights under this Section 3.2 to suspend sales of Registrable Securities for a period in excess of sixty (60) days consecutively or ninety (90) days in any three hundred sixty five (365)-day period unless the suspension is required by law (including the rules and regulations of the Commission) in the opinion of counsel to the Company.
3.3 Registration Expenses. Other than as set forth in the last sentence of this paragraph, the Company shall bear all costs, expenses and fees incurred in connection with all registrations under this Agreement (including any takedowns related thereto), and all costs, expenses and fees incurred in performing or complying with its other obligations under this Agreement, whether or not the Registration Statement becomes effective or whether the Holder withdraws from any such registration, including, without limitation: (i) all registration and filing fees; (ii) fees and expenses of compliance with securities or “blue sky” laws (including fees and disbursements of counsel in connection with blue sky qualifications of the Registrable Securities); (iii) printing expenses; (iv) the Company’s internal expenses (including, without limitation, all salaries and expenses of its officers and employees); (v) the fees and expenses incurred in connection with the listing of the Registrable Securities as required by Section 3.1.11(d); (vi) FINRA fees; (vii) fees and disbursements of counsel for the Company and fees and expenses for independent certified public accountants retained by the Company (including the expenses or costs associated with the delivery of any opinions or comfort letters requested pursuant to Section 3.1.9); (viii) the fees and expenses of any special experts retained by the Company in connection with such registration; (ix) fees and expenses incurred in compliance with Section 3.1.11; and (x) the fees and expenses of legal counsel selected by the Holder, to the extent a majority of its Registrable Securities are included in such registration. In an underwritten offering, the Company shall have no obligation to pay any underwriting discounts or selling commissions attributable to the Registrable Securities being sold by the holders thereof, which underwriting discounts or selling commissions shall be borne by such holders (for the sake of clarity, with respect to any other holder, brokers’ commissions or similar fees will not be borne by Company).

 

15

 

3.4 Information. The Holder shall provide such information as may reasonably be requested by the Company, or the managing Underwriter, if any, in connection with the preparation of any Registration Statement, including amendments and supplements thereto, in order to effect the registration of any Registrable Securities under the Securities Act pursuant to Section 2 and in connection with the Company’s obligation to comply with Federal and applicable state securities laws.
4. INDEMNIFICATION AND CONTRIBUTION.
4.1 Indemnification by the Company. The Company agrees to indemnify and hold harmless the Holder in the event that it holds Registrable Securities included in a registration statement filed pursuant to this Agreement (the “Selling Holder”), and each of its respective officers, employees, affiliates, directors, partners, members, attorneys and agents, and each Person(s), if any, who controls the Selling Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a “Holder Indemnified Party”), from and against any expenses, losses, judgments, claims, damages or liabilities, whether joint or several, arising out of or based upon (a) any untrue statement (or allegedly untrue statement) of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary prospectus, final prospectus, free writing prospectus or summary prospectus contained in the Registration Statement, (b) or any amendment or supplement to such Registration Statement, or arising out of or based upon any omission (or alleged omission) to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act or any rule or regulation promulgated thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration or (c) any other information provided by the Company, either directly or through the Underwriters, to any purchaser of Registrable Securities in connection with or at the time of sale of such Registrable Securities or any omissions of material facts that any purchaser of Registrable Securities lacked at the time of sale of such Registrable Securities and the Company shall promptly reimburse the Holder Indemnified Party for any legal and any other expenses reasonably incurred by such Holder Indemnified Party in connection with investigating and defending any such expense, loss, judgment, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such expense, loss, claim, damage or liability arises out of or is based upon any untrue statement or allegedly untrue statement or omission or alleged omission made in such Registration Statement, preliminary prospectus, final prospectus, free writing prospectus or summary prospectus, or any such amendment or supplement, in reliance upon and in conformity with information furnished to the Company, in writing, by the Holder expressly for use therein. If applicable, the Company also shall indemnify any Underwriter, their officers, affiliates, directors, partners, members and agents and each Person who controls such Underwriter on substantially the same basis as that of the indemnification provided above in this Section 4.1.
4.2 Indemnification by the Selling Holder. The Selling Holder will, in the event that any registration is being effected under the Securities Act pursuant to this Agreement of any Registrable Securities held or beneficially owned by the Selling Holder, indemnify and hold harmless the Company, each of its directors and officers and each Underwriter (if any), and each other Person, if any, who controls such Underwriter within the meaning of the Securities Act, against any losses, claims, judgments, damages or liabilities, whether joint or several, insofar as such losses, claims, judgments, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or allegedly untrue statement of a material fact contained in any Registration Statement under which the sale of such Registrable Securities was registered under the Securities Act, any preliminary prospectus, final prospectus, free writing prospectus, or summary prospectus contained in the Registration Statement, or any amendment or supplement to the Registration Statement, or arise out of or are based upon any omission or the alleged omission to state a material fact required to be stated therein or necessary to make the statement therein not misleading, if the statement or omission was made in reliance upon and in conformity with information regarding the Selling Holder furnished in writing to the Company by the Selling Holder expressly for use therein, and shall reimburse the Company, its directors and officers, and each controlling Person for any legal or other expenses reasonably incurred by any of them in connection with investigation or defending any such loss, claim, damage, liability or action. The Selling Holder’s indemnification obligations hereunder shall be limited to the amount of any net proceeds actually received by the Selling Holder.

 

16

 

4.3 Conduct of Indemnification Proceedings. Promptly after receipt by any Person of any notice of any loss, claim, damage or liability or any action in respect of which indemnity may be sought pursuant to Section 4.1 or 4.2, such Person (the “Indemnified Party”) shall, if a claim in respect thereof is to be made against any other Person for indemnification hereunder, notify such other Person (the “Indemnifying Party”) in writing of the loss, claim, judgment, damage, liability or action; provided, however, that the failure by the Indemnified Party to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability which the Indemnifying Party may have to such Indemnified Party hereunder, except and solely to the extent the Indemnifying Party is actually prejudiced by such failure. If the Indemnified Party is seeking indemnification with respect to any claim or action brought against the Indemnified Party, then the Indemnifying Party shall be entitled to participate in such claim or action, and, to the extent that it wishes, jointly with all other Indemnifying Parties, to assume control of the defense thereof with counsel satisfactory to the Indemnified Party. After notice from the Indemnifying Party to the Indemnified Party of its election to assume control of the defense of such claim or action, the Indemnifying Party shall not be liable to the Indemnified Party for any legal or other expenses subsequently incurred by the Indemnified Party in connection with the defense thereof other than reasonable costs of investigation; provided, however, that in any action in which both the Indemnified Party and the Indemnifying Party are named as defendants, the Indemnified Party shall have the right to employ separate counsel (but no more than one such separate counsel) to represent the Indemnified Party and its controlling Persons who may be subject to liability arising out of any claim in respect of which indemnity may be sought by the Indemnified Party against the Indemnifying Party, with the fees and expenses of such counsel to be paid by such Indemnifying Party if, based upon the written opinion of counsel of such Indemnified Party, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, consent to entry of judgment or effect any settlement of any claim or pending or threatened proceeding in respect of which the Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such judgment or settlement includes an unconditional release of such Indemnified Party from all liability arising out of such claim or proceeding.
4.4 Contribution.
4.4.1 If the indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3 is unavailable to any Indemnified Party in respect of any loss, claim, damage, liability or action referred to herein, then each such 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 loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnified Parties and the Indemnifying Parties in connection with the actions or omissions which resulted in such loss, claim, damage, liability or action, as well as any other relevant equitable considerations. The relative fault of any Indemnified Party and any Indemnifying Party 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 relates to information supplied by such Indemnified Party or such Indemnifying Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

17

 

4.4.2 The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 4.4 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 Section 4.4.1.
4.4.3 The amount paid or payable by an Indemnified Party as a result of any loss, claim, damage, liability or action referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 4.4, the Holder shall not be required to contribute any amount in excess of the dollar amount of the net proceeds (after payment of any underwriting fees, discounts, commissions or taxes) actually received by the Holder from the sale of Registrable Securities which gave rise to such contribution obligation. 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.
4.5 State Securities Laws. Indemnification and contribution similar to that specified in the preceding paragraphs of this Section 4 (with appropriate modifications) shall be given by the Company, the selling holders of Registrable Securities and the Underwriters with respect to any required registration or other qualification of securities under any state law or regulation.
4.6 Non-Exclusivity. The obligations of the parties under this Section 4 shall be in addition to any liability which any party may otherwise have to any other party.
4.7 Survival. The rights and obligations of the Company and the Holder under this Section 4 shall survive the termination of this Agreement.
5. UNDERWRITING AND DISTRIBUTION.
5.1 Rule 144. The Company covenants that it shall use its reasonable best efforts to file any reports required to be filed by it under the Securities Act and the Exchange Act and shall take such further action as the Holder may reasonably request, all to the extent required from time to time to enable the Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 under the Securities Act, as such Rules may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission.
5.2 Due Diligence. In connection with the preparation and filing of each Registration Statement registering Registrable Securities under the Securities Act pursuant to Section 2, but not during any suspension period pursuant to Section 3.1.1 and Section 3.2, the Company shall give the Holder and the Underwriters, if any, and their respective counsel and accountants such reasonable and customary access to its books, records and properties and such opportunities to discuss the business and affairs of Company with its officers and the independent public accountants who have certified the financial statements of the Company as shall be necessary, in the opinion of the Holder and such Underwriters or their respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act and to establish a due diligence defense thereunder; provided, that the Holder and the Underwriters and their respective counsel and accountants shall use their commercially reasonable efforts to coordinate any such investigation of the books, records and properties of the Company and, if requested by Company, in its sole discretion, will enter into confidentiality agreements in a form reasonably requested by Company.

 

18

 

6. MISCELLANEOUS.
6.1 Other Registration Rights.
6.1.1 The Company represents and warrants that (i) other than pursuant to this Agreement and the Existing Registration Rights Agreement, no Person has any right to require the Company to register any shares of the Company’s capital stock for sale or to include shares of the Company’s capital stock in any registration filed by the Company for the sale of shares of capital stock for its own account or for the account of any other Person, and (ii) none of the execution and delivery by the Company of this Agreement, the consummation of the transactions contemplated hereby or the compliance by the Company with any of the provisions hereof will conflict with, result in any violation of or default (with or without notice or lapse of time, or both) under, give rise to a right of termination or cancellation under, require a consent or waiver under, require the payment of a penalty or increased liabilities or fees or the loss of a benefit under or result in the imposition of any lien under, any provision of (x) any contract or agreement to which the Company or any of its affiliates or subsidiaries is a party, including the Existing Registration Rights Agreement, or (y) any applicable law or court order.
6.1.2 From and after the date hereof, the Company agrees and covenants that it shall not enter into any agreement pursuant to which any Person will be granted any right to require the Company to register any shares of its capital stock for sale or to include shares of the Company’s capital stock in any registration filed by the Company for the sale or shares of capital stock for its own account or for the account of any other Person, without the consent of the Holder.
6.2 Assignment; Assumption.
6.2.1 Assignment; No Third Party Beneficiaries. Except as provided in this Section 6.2, this Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company or the Holder in whole or in part. Provided that the proposed permitted transferee agrees to execute a Joinder Agreement in substantially the form attached hereto as Exhibit A (to the extent such party executes and delivers a Joinder Agreement, a “Joining Stockholder”), this Agreement and the rights, duties and obligations of the Holder may be freely assigned or delegated by the Holder in conjunction with and to the extent of any transfer by the Holder of Registrable Securities, securities of Company or any subsidiary exchangeable, convertible or exercisable for Registrable Securities, securities issued in connection with a combination of securities, conversion, exchange, replacement, recapitalization, merger, consolidation, or other reorganization or otherwise in exchange for Registrable Securities or that would otherwise represent beneficial ownership of Registrable Securities, including without limitation the Class B Exchangeable Units. This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the Holder or of any assignee of the Holder. This Agreement is not intended to confer any rights or benefits on any Persons that are not party hereto other than as expressly set forth in Article 4 and this Section 6.2.
6.2.2 Assumption of Obligation Upon Certain Fundamental Changes. In the event of any merger, sale of all or substantially all the assets of Company, reorganization, reclassification, exchange offer, or consolidation of or involving Company that results in the reclassification, exchange or conversion of the Registrable Securities into or for, inter alia, securities (“New Securities”) of an issuer other than Company (the “New Issuer”), Company shall cause the New Issuer to assume, and the New Issuer shall assume, by executing a written instrument, the obligations of Company under this Agreement as they relate to the New Securities. In addition, the New Issuer shall acknowledge in such written instrument that this Section 6.2.2. shall similarly apply to successive mergers, sales, reorganizations, reclassifications, exchange offers, or consolidations.

 

19

 

6.3 Notices. All notices, demands, requests, consents, approvals or other communications (collectively, “Notices”) required or permitted to be given hereunder or which are given with respect to this Agreement shall be in writing and shall be personally served, delivered by reputable air courier service with charges prepaid, or transmitted by hand delivery, addressed as set forth below, or to such other address as such party shall have specified most recently by written notice. Notice shall be deemed given on the date of service or transmission if personally served or transmitted by telegram, telex or facsimile; provided, that if such service or transmission is not on a business day or is after normal business hours, then such notice shall be deemed given on the next business day. Notice otherwise sent as provided herein shall be deemed given on the next business day following timely delivery of such notice to a reputable air courier service with an order for next-day delivery.
If to Company, to:
Crumbs Bake Shop, Inc.
c/o Crumbs Holdings LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Chairman of the Board
with a copy (which shall not constitute notice) to:
Ellenoff ▇▇▇▇▇▇▇▇ & Schole LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
If to the Holder, to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy, to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
6.4 Severability. This Agreement shall be deemed severable, and the invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of this Agreement or of any other term or provision hereof. Furthermore, in lieu of any such invalid or unenforceable term or provision, the parties hereto intend that there shall be added as a part of this Agreement a provision as similar in terms to such invalid or unenforceable provision as may be possible that is valid and enforceable.
6.5 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument.

 

20

 

6.6 Entire Agreement. This Agreement (including all agreements entered into pursuant hereto and all certificates and instruments delivered pursuant hereto and thereto) constitute the entire agreement of the parties with respect to the subject matter hereof and supersede all prior and contemporaneous agreements, representations, understandings, negotiations and discussions between the parties, whether oral or written.
6.7 Modification and Amendment; Further Assurances.
6.7.1 Amendment. The provisions of this Agreement (including the provisions of this sentence) applicable to the rights, duties and obligations of the Holder may not be amended, modified or supplemented, without the written consent of the Company and the Holder. The provisions of this Agreement (including the provisions of this sentence) applicable to the rights, duties and obligations of the Holder may not be amended, modified or supplemented, without the written consent of the Company and the Holder.
6.7.2 Further Assurances. Each of the parties hereto shall execute all such further instruments and documents and take all such further action as any other party hereto may reasonably require in order to effectuate the terms and purposes of this Agreement.
6.8 Titles and Headings. Titles and headings of sections of this Agreement are for convenience only and shall not affect the construction of any provision of this Agreement.
6.9 Interpretation. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein,” “hereby” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The parties have participated jointly in the negotiation and drafting of this Agreement. Consequently, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.
6.10 Waivers and Extensions. Any party to this Agreement may waive any right, breach or default which such party has the right to waive; provided, that such waiver will not be effective against the waiving party unless it is in writing, is signed by such party, and specifically refers to this Agreement. Waivers may be made in advance or after the right waived has arisen or the breach or default waived has occurred. Any waiver may be conditional. No waiver of any breach of any agreement or provision herein contained shall be deemed a waiver of any preceding or succeeding breach thereof nor of any other agreement or provision herein contained. No waiver or extension of time for performance of any obligations or acts shall be deemed a waiver or extension of the time for performance of any other obligations or acts.
6.11 Specific Performance; Remedies Cumulative. In the event that the Company fails to observe or perform any covenant or agreement to be observed or performed under this Agreement, the Holder may proceed to protect and enforce its rights by suit in equity or action at law, whether for specific performance of any term contained in this Agreement or for an injunction against the breach of any such term or in aid of the exercise of any power granted in this Agreement or to enforce any other legal or equitable right, or to take any one or more of such actions, without being required to post a bond. None of the rights, powers or remedies conferred under this Agreement shall be mutually exclusive, and each such right, power or remedy shall be cumulative and in addition to any other right, power or remedy, whether conferred by this Agreement or now or hereafter available at law, in equity, by statute or otherwise.
6.12 Governing Law. This Agreement shall be governed by, interpreted under, and construed in accordance with the internal laws of the State of Delaware applicable to agreements made and to be performed within the State of Delaware, without giving effect to any choice-of-law provisions thereof that would compel the application of the substantive laws of any other jurisdiction.

 

21

 

6.13 Waiver of Trial by Jury. Each party hereby irrevocably and unconditionally waives the right to a trial by jury in any action, suit, counterclaim or other proceeding (whether based on contract, tort or otherwise) arising out of, connected with or relating to this Agreement or the transactions contemplated hereby.
6.14 Exchange Agreement Matters. For purposes of this Agreement and notwithstanding anything to the contrary, the Holder, as a holder of Class B Exchangeable Units, shall be deemed to beneficially own and/or hold the shares of Common Stock issuable upon exchange of such Class B Exchangeable Units and shall not be required to exchange such units in order to exercise any rights hereunder except in conjunction with the timely delivery of any shares of Common Stock required to be delivered to complete a transfer contemplated by a Registration Statement. The Company shall use commercially reasonable efforts to ensure that the settlement procedures related to any Registration Statement, including those set forth in any underwriting agreement to which the Company is a party, provide sufficient time for the Holder to provide notice in accordance with the Exchange Agreement after the relevant settlement date has been definitively determined and cause such shares of Common Stock to be timely delivered to the recipient of such shares.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

22

 

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.
             
    CRUMBS BAKE SHOP, INC.    
 
            
 
  By:   /s/ ▇▇▇▇ ▇. Ireland
 
Name: ▇▇▇▇ ▇. Ireland 		   
 
      Title: CFO    
 
            
    ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇    
 
            
    /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇    
         

 

23

 

Exhibit A
FORM OF JOINDER AGREEMENT
This JOINDER AGREEMENT to the Registration Rights Agreement (the “Joinder Agreement”) is made and entered into as of  _____  by and among Crumbs Bake Shop, Inc., a Delaware corporation (the “Company”), and the undersigned (the “Joining Stockholder(s)”), and relates to that certain Registration Rights Agreement dated as of November 14, 2011 (as amended from time to time, the “Registration Rights Agreement”), by and among the Company and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the “Holder”). Capitalized terms used and not defined herein shall have the meanings ascribed to such terms in the Registration Rights Agreement.
WHEREAS, the Joining Stockholder(s) [is][are] acquiring Class B Exchangeable Units, shares of Common Stock of the Company into which such Class B Exchangeable Units have been converted or other Registrable Securities, and in connection therewith, the Company has agreed to grant certain registration rights to such Joining Stockholder(s) as provided for in the Registration Rights Agreement; and
WHEREAS, the Joining Stockholder(s) [has][have] agreed to become a party to the Registration Rights Agreement on the terms set forth herein.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1. Agreement to be Bound. [Each][The] Joining Stockholder agrees that, upon the execution of this Joinder Agreement, such Joining Stockholder shall become a party to the Registration Rights Agreement and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the Registration Rights Agreement and such Joining Stockholder(s) shall be deemed a “Joining Stockholder” thereunder for all purposes.
2. Notices. The address, facsimile number and email address to which notices delivered pursuant to the Registration Rights Agreement may be sent to the Joining Stockholder(s) is as follows:
[•]
3. Binding Effect. This Joinder Agreement shall be binding upon and shall inure to the benefit of, and be enforceable by, the Company, the Holder and the Joining Stockholder(s) and their respective heirs, personal representatives, successors and assigns.
4. Severability. The invalidity or unenforceability of any particular provision of this Joinder Agreement shall not affect the other provisions hereof or thereof, and this Joinder Agreement shall be construed in all respects as if such invalid or unenforceable provision was omitted. In the case of any such invalidity or unenforceability, the parties hereto agree to use all commercially reasonable efforts to achieve the purpose of such provisions by a new legally valid and enforceable stipulation.
5. Captions. This Joinder Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

 

 

6. Counterparts. This Joinder Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
7. Governing Law. This Joinder Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, all rights and remedies being governed by such laws, without regard to its conflicts of law rules.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

IN WITNESS WHEREOF, the parties have caused this Joinder Agreement to be executed and delivered by their duly authorized representatives as of the date first written above.
             
    CRUMBS BAKE SHOP, INC.    
 
            
 
  By:        
 
     
 
Name: 		   
 
      Title:    
 
            
    [THE JOINING STOCKHOLDER]    
 
            
 
  By:        
 
     
 
Name: 		   
 
      Title:    

 

 

Document Metadata

Filed: November 16th, 2011