|
EXHIBIT
10.5
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
REGISTRATION RIGHTS
AGREEMENT
This Registration Rights
Agreement (this “ Agreement ”) is made and
entered into as of July 10, 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
”).
This Agreement is made
pursuant to the Investment Agreement, dated as of the date hereof
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.
“ Effectiveness
Date ” means (i) the 90 th calendar day following the Closing 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.
“ Filing Date
” means the 45 th calendar day following the Closing Date and, with respect to
any additional Registration Statements which may be required
pursuant to Section 3(b) , the 10 th day following the date on which the
Company first knows, or reasonably should have known, that such
additional Registration Statement is required hereunder.
2
“ 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 herewith, issued by the Company to
Textor, initially to acquire an aggregate of 300,000 shares of the
Company’s Common Stock.
3
2. Shelf
Registration
(a) On or prior to each
Filing Date, the Company shall prepare and file with the Commission
a “Shelf” Registration Statement covering the resale of
the Registrable Securities outstanding on such Filing Date 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
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 its Filing 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 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
4
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.
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 Filing Date
and 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
5
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 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 that, in the determination of
the Company, makes it not in the best interests of the Company to
allow continued availability or the Registration Statement or
Prospectus.
(d) Promptly deliver to each
Holder, without charge, an electronic copy of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment
or supplement thereto. Filing on the Commission’s EDGAR
system shall be deemed to satisfy such delivery requirement.
Subject to the terms of this Agreement, the Company hereby consents
to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such
Prospectus and any amendment or supplement thereto.
(e) Use commercially
reasonable efforts to register or qualify the resale of such
Registrable Securities as required under applicable securities or
Blue Sky laws of each State within the United States as any Holder
requests in writing, and to keep each such registration or
qualification (or exemption therefrom) effective during the
Effectiveness Period; provided, that the Company shall not be
required to qualify generally to do business in any jurisdiction
where it is not then so qualified or subject the
| 
