EXHIBIT 10.4
R EGISTRATION R IGHTS A GREEMENT
B Y AND A MONG
T HE P ARENT C OMPANY ,
L AMINAR D IRECT C APITAL , L.L.C.
AND
J OHN C. T EXTOR
D ATED
J ULY 10, 2008
A MENDED AND R ESTATED
AS OF
O CTOBER 31, 2008
AMENDED AND RESTATED REGISTRATION
RIGHTS AGREEMENT
This Amended and Restated
Registration Rights Agreement (this “ Agreement
”) is made and entered into as of October 31, 2008, by
and among The Parent Company, a Colorado corporation (the “
Company ”), and Laminar Direct Capital, L.L.C., a
Delaware limited liability company (“ LDC ”),
and John C. Textor, a resident of the State of Florida (“
Textor ”), and amends and restates the Registration
Rights Agreement entered into as of July 10, 2008 among the
Company, LDC and Textor (the “ Prior Agreement
”).
This Agreement is made pursuant to
the Investment Agreement, dated as of July 10, 2008 by and
among the Company, LDC, and the other parties signatory thereto
(the “ Investment Agreement ”), and in
consideration of Textor’s execution and delivery of a
personal guaranty in favor of LDC in connection
therewith.
The Company, LDC and Textor hereby
agree as follows:
1. Definitions
Capitalized terms used and not
otherwise defined herein that are defined in the Investment
Agreement shall have the meanings given such terms in the
Investment Agreement. As used in this Agreement, the following
terms shall have the following meanings:
“ Advice ” shall
have the meaning set forth in Section 7(d)
hereof.
“ Capital Stock ”
means the Company’s Common Stock and any other class of
securities which the Company’s Common Stock is converted or
reclassified into or any other securities created by the Company in
the future.
“ Commission ”
means the Securities and Exchange Commission.
“ Cut Back Shares
” shall have the meaning set forth in
Section 2(c) .
“ Demand Date ”
means the date the Holders of a majority of the Registrable
Securities demand that the Company file a Registration Statement
pursuant to Section 2(a) .
“
Effectiveness Date ” means (i) the 90
th
calendar day
following the Demand Date, and, with respect to any additional
Registration Statements which may be required pursuant to
Section 3(b), (ii) the 45 th calendar day following the date
on which the Company first knows, or reasonably should have known,
that such additional Registration Statement is required hereunder;
provided , however , in the event the Company is
notified by the Commission that one of the above Registration
Statements will not be reviewed or is no longer subject to further
review and comments, the Effectiveness Date as to such Registration
Statement shall be the fifth Trading Day following the date on
which the Company is so notified if such date precedes the dates
required above.
“ Effectiveness Period
” shall have the meaning set forth in
Section 2(a) hereof.
“ Event ” shall
have the meaning set forth in Section 2(b)
hereof.
“ Event Date ”
shall have the meaning set forth in Section 2(b)
hereof.
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“ Holder ” or
“ Holders ” means the holder or holders, as the
case may be, from time to time of Registrable
Securities.
“ Indemnified Party
” shall have the meaning set forth in
Section 5(c) hereof.
“ Indemnifying Party
” shall have the meaning set forth in
Section 5(c) hereof.
“ Losses ” shall
have the meaning set forth in Section 5(a)
hereof.
“ Proceeding ”
shall mean any threatened, pending or completed claim, action,
suit, arbitration, alternate dispute resolution process,
investigation, administrative hearing, appeal, or any other
proceeding, whether civil, criminal, administrative or
investigative, whether formal or informal, including a proceeding
initiated by an Indemnified Party pursuant to Section 5
hereof to enforce such Indemnified Party’s rights
hereunder.
“ Prospectus ”
means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any
information previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented
by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to
the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
“ Registrable
Securities ” means (i) any Capital Stock issued or
issuable to LDC or Textor pursuant to any Warrant (ii) any
Capital Stock issued or issuable with respect to the Capital Stock
referred to in clause (i) above by way of a stock dividend or
stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization and
(iii) all other shares of Capital Stock held by (or issued
pursuant to clause (ii) above, to) LDC, Textor and each entity
controlled by Textor.
“ Registration
Statement ” means the registration statements required to
be filed hereunder and any additional registration statements
contemplated by Section 3(b) , including (in each case)
the Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by
reference or deemed to be incorporated by reference in such
registration statement.
“ Rule 415 ”
means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“ Rule 424 ”
means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission
having substantially the same purpose and effect as such
Rule.
“ Trading Day ”
means, a day on which the Company’s Common Stock is traded on
the Principal Market.
“ Warrant ” means
any of: (i) the common stock purchase warrant, of even date
herewith, issued by the Company to LDC, initially to acquire 12.0%
of the Company’s Common Stock on a fully-diluted basis; and
(ii) each of the two common stock purchase warrants, of even
date
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herewith, issued by the Company to
Textor, initially to acquire an aggregate of 300,000 shares of the
Company’s Common Stock.
2. Shelf
Registration
(a) Upon written request of the
Holders of a majority of the Registrable Securities, the Company
shall prepare and file with the Commission a “Shelf”
Registration Statement covering the resale of the Registrable
Securities outstanding as of the date of such request for an
offering to be made on a continuous basis pursuant to Rule 415. The
Registration Statement shall be on Form S-3 (unless the Company is
not then eligible to register the Registrable Securities for resale
on Form S-3, in which case such registration shall be on another
appropriate form in accordance herewith) and shall contain (unless
otherwise directed by the Holders and except to the extent the
Company determines that modifications thereto are required under
applicable law) substantially the “Plan of
Distribution” attached hereto as Annex A , subject to
any changes provided by such Holders. Subject to the terms of this
Agreement, the Company shall use its best efforts to cause the
Registration Statement to be declared effective under the
Securities Act as promptly as possible after the filing thereof,
but in any event prior to the applicable Effectiveness Date, and
shall use its best efforts to keep such Registration Statement
continuously effective under the Securities Act until the date
which is two years after the date that such Registration Statement
is declared effective by the Commission or such earlier date when
all Registrable Securities covered by such Registration Statement
have been sold or may be sold without volume restrictions pursuant
to Rule 144 as determined by the counsel to the Company pursuant to
a written opinion letter to such effect, addressed and acceptable
to the Company’s transfer agent and the affected Holders (the
“ Effectiveness Period ”).
(b) If: (i) a Registration
Statement is not filed on or prior to 45 days after the Demand Date
(if the Company files a Registration Statement without affording
the Holders the opportunity to review and comment on the same as
required by Section 3(a) , the Company shall not be
deemed to have satisfied clause (i)), or (ii) the Company
fails to file with the Commission a request for acceleration in
accordance with Rule 461 promulgated under the Securities Act,
within five Trading Days of the date that the Company is notified
(orally or in writing, whichever is earlier) by the Commission that
a Registration Statement will not be “reviewed,” or not
subject to further review, or (iii) prior to its Effectiveness
Date, the Company fails to file a pre-effective amendment and
otherwise respond in writing to comments made by the Commission in
respect of such Registration Statement within 15 Trading Days after
the receipt of comments by or notice from the Commission that such
amendment is required in order for a Registration Statement to be
declared effective, or (iv) a Registration Statement filed or
required to be filed hereunder is not declared effective by the
Commission by its Effectiveness Date, or (v) after the
Effectiveness Date, a Registration Statement ceases for any reason
to remain continuously effective as to all Registrable Securities
for which it is required to be effective, or the Holders are not
permitted to utilize the Prospectus therein to resell such
Registrable Securities for 5 consecutive Trading Days or in any
individual case an aggregate of 15 Trading Days during any 12 month
period (which need not be consecutive Trading Days) (any such
failure or breach being referred to as an “ Event
”, and for purposes of clause (i) or (iv) the date
on which such Event occurs, or for purposes of clause (ii) the
date on which such five Trading Day period is exceeded, or for
purposes of clause (iii) the date on which such 15 Trading Day
period is exceeded, or for purposes of clause (v) the date on
which such 5 or 15 Trading Day period, as applicable, is exceeded,
being referred to as “ Event Date ”), then, on
each such Event Date and every monthly anniversary thereof until
the applicable Event is cured, the Company shall pay to each Holder
an amount in cash, as liquidated damages and not as a penalty,
equal to 2.0% per month of the product of (x) the
Aggregate Number (as defined in the applicable Warrant) multiplied
by (y) the
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Exercise Price (as defined in the
applicable Warrant). If the Company fails to pay any liquidated
damages pursuant to this Section 2(b) in full within
seven days after the date payable, the Company will pay interest
thereon at a rate of 18% per annum (or such lesser maximum
amount that is permitted to be paid by applicable law) to the
Holder, accruing daily from the date such liquidated damages are
due until such amounts, plus all such interest thereon, are paid in
full. The liquidated damages pursuant to the terms hereof shall
apply on a pro-rata basis for any portion of a month prior to the
cure of an Event. The Holders hereby waive any provisions of the
Prior Agreement with respect to liquidated damages.
(c) If at any time the Commission
takes the position that the offering of some or all of the
Registrable Securities is not eligible to be made on a delayed or
continuous basis under the provisions of Rule 415 as a result of a
characterization by the Commission of the transaction described by
a Registration Statement as a primary offering by the Company, the
Company shall use its reasonable best efforts to persuade the
Commission that the offering contemplated by such Registration
Statement is a valid secondary offering and not an offering
“by or on behalf of the registrant” as defined in Rule
415. If, despite the Company’s reasonable best efforts and
compliance with the terms of this Section 2(c) the
Commission refuses to alter its position, the Company shall
(i) remove from such Registration Statement such portion of
the Registrable Securities (the “ Cut Back Shares
”) and/or (ii) agree to such restrictions and
limitations on the registration and resale of the Registrable
Securities as the Commission may require to assure the
Company’s compliance with the requirements of Rule 415. The
Company agrees that the Cut Back Shares shall be comprised of
(i) first, any securities of the Company held by persons other
than the Holders that are then included in the Registration
Statement, (ii) second, Registrable Securities of each Holder,
other than any Capital Stock issued or issuable to LDC or Textor
pursuant to any Warrant, pro-rata based on the number of such
Registrable Securities held by each Holder, and (iii) third,
Registrable Securities of each Holder consisting of any Capital
Stock issued or issuable to LDC or Textor pursuant to any Warrant,
pro-rata based on the number of such Registrable Securities held by
each Holder. The Company shall have no liability to any Holder
pursuant to Section 2(b) or otherwise as a result of
such Registration Statement covering less than all of the
Registrable Securities under the circumstances described in this
Section 2(c) . Within six (6) months, or such
earlier time as permitted by the Commission, of the initial
registration filed under Section 2(a) being declared
effective, the Company shall file an additional Registration
Statement containing the Cut Back Shares. With regard to the
additional Registration Statement, all of the provisions of this
Section 2(c) shall again be applicable to the Cut Back
Shares. The new registration statement shall be on Form S-3 (except
if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration
shall be on another appropriate form in accordance with the
Securities Act and the Exchange Act) and shall contain the
“Plan of Distribution” in substantially the form
attached hereto as Annex A , subject to any changes provided
by such Holders.
(d) Notwithstanding the foregoing,
the Company agrees use its best efforts to cause its Registration
Statement on Form S-3, No. 153160, to include all Registrable
Securities held by Textor (other than Registrable Securities
consisting of any Capital Stock issued or issuable to Textor
pursuant to any Warrant or any other derivative security held by
Textor), and to be declared effective under the Securities Act as
promptly as possible after the date of this Agreement and also use
its best efforts to keep such Registration Statement continuously
effective under the Securities Act until the date which is two
years after the date that such Registration Statement is declared
effective by the Commission or such earlier date when all
Registrable Securities covered by such Registration Statement have
been sold or may be sold without volume restrictions pursuant to
Rule 144 as determined by the counsel to the Company
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pursuant to a written opinion letter
to such effect, addressed and acceptable to the Company’s
transfer agent and Textor.
3. Registration
Procedures
In connection with the
Company’s registration obligations hereunder, the Company
shall:
(a) Not less than five Trading Days
prior to the filing of each Registration Statement or any related
Prospectus or any amendment or supplement thereto (excluding any
document that would be incorporated or deemed incorporated therein
by reference), (i) furnish to each Holder copies of all such
documents proposed to be filed, which documents (other than those
incorporated or deemed to be incorporated by reference) will be
subject to the review of such Holders, and (ii) cause its
officers and directors, counsel and independent certified public
accountants to respond to such inquiries as shall be necessary, in
the reasonable opinion of respective counsel to conduct a
reasonable investigation within the meaning of the Securities Act.
The Company shall not file the Registration Statement or any such
Prospectus or any amendments or supplements thereto to which the
Holders of a majority of the Registrable Securities shall
reasonably and in good faith object, provided, the Company is
notified of such objection in writing no later than 5 Trading Days
after the Holders have been so furnished copies of such documents.
In the event of any such objection, the Effectiveness Date shall be
extended on a day by day basis until such objection has been
resolved.
(b)(i) Prepare and file with the
Commission such amendments, including post-effective amendments, to
a Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep a Registration Statement
continuously effective as to the applicable Registrable Securities
for the Effectiveness Period and prepare and file with the
Commission such additional Registration Statements as may be
necessary in order to register for resale under the Securities Act
all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus
supplement (subject to the terms of this Agreement), and as so
supplemented or amended to be filed pursuant to Rule 424;
(iii) respond as promptly as reasonably possible, and in any
event within 15 Trading Days, to any comments received from the
Commission with respect to a Registration Statement or any
amendment thereto and as promptly as reasonably possible provide
the Holders true and complete copies of all correspondence from and
to the Commission relating to a Registration Statement; and
(iv) comply in all material respects with the provisions of
the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration
Statement during the applicable period in accordance (subject to
the terms of this Agreement) with the intended methods of
disposition by the Holders thereof set forth in such Registration
Statement as so amended or in such Prospectus as so
supplemented.
(c) Notify the Holders of
Registrable Securities to be sold (which notice shall, pursuant to
clauses (ii) through (vi) hereof be accompanied by an
instruction to suspend the use of the Prospectus until the
requisite changes have been made) as promptly as reasonably
possible (and, in the case of (i)(A) below, not less than five
Trading Days prior to such filing) and (if requested by any such
Person) confirm such notice in writing no later than one Trading
Day following the day (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to a Registration Statement
is proposed to be filed; (B) when the Commission notifies the
Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in
writing on such Registration Statement (the Company shall provide
true and complete copies thereof and all written responses thereto
to each of the Holders); and (C) with respect to a
Registration Statement or any post-effective amendment, when the
same has
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become effective; (ii) of any
request by the Commission or any other Federal or state
governmental authority for amendments or supplements to a
Registration Statement or Prospectus or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of a Registration Statement covering
any or all of the Registrable Securities or the initiation of any
Proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose;
(v) of the occurrence of any event or passage of time that
makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a
Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to a Registration
Statement, Prospectus or other documents so that, in the case of a
Registration Statement or the Prospectus, as the case may be, it
will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading; and (vi) the occurrence
or existence of any pending corporate development with respect to
the Company that the Company believes may be material and
t
