REGISTRATION RIGHTS AGREEMENT
Exhibit 10.3
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
dated as of June 3, 2021, is made and entered into by and among
Liberated Syndication, Inc., a Nevada corporation
(“Company”) and
those stockholders listed on Exhibit A, as such exhibit may be
amended from time to time (each a “Holder” and
collectively, the “Holders”).
RECITALS
WHEREAS, the Company has authorized the
issuance of 2,083,334 shares (the “Shares”) of
the common stock of the Company, $.001 par value per share (the
“Common
Stock”) to certain investors pursuant to that certain
Membership Interest Purchase Agreement, dated as of March 29, 2021
(the “MIPA”), by and
among the Company, AdvertiseCast, LLC, a Wisconsin limited
liability company and the Holders;
WHEREAS, in connection with the
consummation of the transactions contemplated by the MIPA and
pursuant to the terms of the MIPA, the parties hereto desire to
enter into this Agreement in order to grant certain registration
rights to the Investors as set forth below.
NOW, THEREFORE, in consideration of the
representations, covenants and agreements contained herein, and
certain other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The terms defined
in this Article I
shall, for all purposes of this Agreement, have the respective
meanings set forth below:
“Adverse
Disclosure” shall mean any public disclosure of
material non-public information, which disclosure, in the good
faith judgment of the Chief Executive Officer of the Company or the
Board, after consultation with counsel to the Company,
(i) would be required to be made in any Registration Statement
or Prospectus in order for the applicable Registration Statement or
Prospectus not to contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
contained therein (in the case of any prospectus and any
preliminary prospectus, in the light of the circumstances under
which they were made) not misleading, (ii) would not be
required to be made at such time if the Registration Statement were
not being filed, declared effective or used, as the case may be,
and (iii) the Company has a bona fide business purpose for not
making such information public.
“Action” means
any claim, action, suit, audit, examination, assessment,
arbitration, mediation or inquiry, or any proceeding or
investigation, by or before any Governmental
Authority.
“Agreement”
shall have the meaning given in the Preamble hereto.
“Board” means
the board of directors of the Company.
“Block Trade”
shall have the meaning given in Section 2.4.1.
“Closing”
shall have the meaning given in the MIPA.
“Closing Date”
shall have the meaning given in the MIPA.
“Commission”
shall mean the Securities and Exchange Commission.
“Common Stock”
shall mean the common stock of the Company, par value $0.001 per
share.
“Company”
shall have the meaning given in the Preamble hereto and includes
the Company’s successors by recapitalization, merger,
consolidation, spin-off, reorganization or similar
transaction.
“Demanding
Holder” shall have the meaning given in Section 2.1.4.
“Exchange Act”
shall mean the Securities Exchange Act of 1934, as it may be
amended from time to time.
“FINRA” the
Financial Industry Regulatory Authority Inc.
“Form S-1
Shelf” shall have the meaning given in Section 2.1.1.
“Form S-3
Shelf” shall have the meaning given in Section 2.1.1.
“Governmental
Authority” means any federal, state, provincial,
municipal, local or foreign government, governmental authority,
regulatory or administrative agency (which for the purposes of this
Agreement shall include FINRA and the Commission), governmental
commission, department, board, bureau, agency or instrumentality,
court or tribunal.
“Governmental
Order” means any order, judgment, injunction, decree,
writ, stipulation, determination or award, in each case, entered by
or with any Governmental Authority.
“Holder
Information” shall have the meaning given in
Section
4.1.2.
“Holders”
shall have the meaning given in the Preamble hereto, for so long as
such person or entity holds any Registrable
Securities.
“Law” means any
statute, law, ordinance, rule, regulation or Governmental Order, in
each case, of any Governmental Authority.
“Maximum Number of
Securities” shall have the meaning given in
Section
2.1.5.
“Minimum Takedown
Threshold” shall have the meaning given in
Section
2.1.4.
“Misstatement”
shall mean an untrue statement of a material fact or an omission to
state a material fact required to be stated in a Registration
Statement or Prospectus or necessary to make the statements in a
Registration Statement or Prospectus (in the case of a Prospectus,
in the light of the circumstances under which they were made) not
misleading.
“MIPA” shall
have the meaning given in the Recitals hereto.
“Permitted
Transferees” shall mean any person or entity to whom a
Holder of Registrable Securities is permitted to transfer such
Registrable Securities prior to the expiration of the Lockup Period
pursuant to the Lockup Agreement.
“Piggyback
Registration” shall have the meaning given in
Section
2.2.1.
“Prospectus”
shall mean the prospectus included in any Registration Statement,
as supplemented by any and all prospectus supplements and as
amended by any and all post-effective amendments and including all
material incorporated by reference in such prospectus.
“Registrable
Security” shall mean (a) any outstanding shares of
Common Stock held by a Holder immediately following the Closing
(including shares of Common Stock distributable pursuant to the
MIPA), (b) any shares of Common Stock that may be acquired by
Holders upon the exercise of a warrant or other right to acquire
Common Stock held by a Holder immediately following the Closing,
(c) any shares of Common Stock or warrants to purchase shares of
Common Stock (including any shares of Common Stock issued or
issuable upon the exercise of any such warrant) of the Company
otherwise acquired or owned by a Holder following the date hereof
to the extent that such securities are “restricted
securities” (as defined in Rule 144) or are otherwise held by
an “affiliate” (as defined in Rule 144) of the Company,
and (d) any other equity security of the Company or any of its
subsidiaries issued or issuable with respect to any securities
referenced in clause (a), (b) or (c) above by way of a stock
dividend or stock split or in connection with a recapitalization,
merger, consolidation, spin-off, reorganization or similar
transaction; provided, however, that, as to any
particular Registrable Security, such securities shall cease to be
Registrable Securities upon the earliest to occur of: (A) a
Registration Statement with respect to the sale of such securities
shall have become effective under the Securities Act and such
securities shall have been sold, transferred, disposed of or
exchanged in accordance with such Registration Statement by the
applicable Holder; (B) such securities shall have been
otherwise transferred, new certificates for such securities not
bearing a legend restricting further transfer shall have been
delivered by the Company and subsequent public distribution of such
securities shall not require registration under the Securities Act;
(C) such securities shall have ceased to be outstanding;
(D) such securities may be sold without registration pursuant
to Rule 144 or any successor rule promulgated under the Securities
Act (but with no volume or other restrictions or limitations
including as to manner or timing of sale); and (E) such
securities have been sold to, or through, a broker, dealer or
underwriter in a public distribution or other public securities
transaction.
“Registration”
shall mean a registrationeffected by preparing and filing a
registration statement, prospectus 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.
“Registration
Expenses” shall mean the expenses of a Registration,
including, without limitation, the following:
(A) all registration
and filing fees (including fees with respect to filings required to
be made with the Financial Industry Regulatory Authority, Inc.) and
any national securities exchange on which the Common Stock is then
listed;
(B) fees and expenses
of compliance with securities or blue sky laws (including
reasonable fees and disbursements of outside counsel for the
Underwriters in connection with blue sky qualifications of
Registrable Securities);
(C) printing,
messenger, telephone and delivery expenses;
(D) reasonable fees and
disbursements of counsel for the Company; and
(E) reasonable fees and
disbursements of all independent registered public accountants of
the Company incurred specifically in connection with such
Registration.
“Registration
Statement” shall mean any registration statement that
covers Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus included in such registration
statement, amendments (including post-effective amendments) and
supplements to such registration statement, and all exhibits to and
all material incorporated by reference in such registration
statement.
“Requesting
Holders” shall have the meaning given in Section 2.1.5.
“Securities
Act” shall mean the Securities Act of 1933, as amended
from time to time.
“Shelf” shall
mean the Form S-1 Shelf, the Form S-3 Shelf or any Subsequent Shelf
Registration, as the case may be.
“Shelf
Registration” shall mean a registration of securities
pursuant to a registration statement filed with the Commission in
accordance with and pursuant to Rule 415 promulgated under the
Securities Act (or any successor rule then in effect).
“Subsequent
Shelf Registration” shall have the meaning given in
Section
2.1.2.
“Transactions”
shall have the meaning given in the Recitals hereto.
“Transfer”
shall mean the (a) sale of, offer to sell, contract or agreement to
sell, hypothecate, pledge, grant of any option to purchase or
otherwise dispose of or agreement to dispose of, directly or
indirectly, or establishment or increase of a put equivalent
position or liquidation with respect to or decrease of a call
equivalent position within the meaning of Section 16 of the
Exchange Act with respect to, any security, (b) entry into any swap
or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of any
security, whether any such transaction is to be settled by delivery
of such securities, in cash or otherwise, or (c) public
announcement of any intention to effect any transaction specified
in clause (a) or (b).
“Underwriter”
shall mean a securities dealer who purchases any Registrable
Securities as principal and not as part of such dealer’s
market-making activities.
“Underwritten
Offering” shall mean a Registration in which
securities of the Company are sold to an Underwriter in a firm
commitment underwriting for distribution to the
public.
“Withdrawal
Notice” shall have the meaning given in Section 2.1.6.
ARTICLE II
REGISTRATIONS AND OFFERINGS
2.1 Shelf
Registration.
2.1.1 Filing. If any Holder makes a
demand for registration, the Company shall file within 30 days (but
not sooner than August 15, 2021) , and use commercially reasonable
efforts to cause to be declared effective as soon as practicable
thereafter, a Registration Statement for a Shelf Registration on
Form S-1 (the “Form S-1
Shelf”) or, if the Company is eligible to use a
Registration Statement on Form S-3, a Shelf Registration on Form
S-3 (the “Form S-3
Shelf”), in each case, covering the resale of all the
Registrable Securities (determined as of two business days prior to
such filing) on a delayed or continuous basis. Such Shelf shall
provide for the resale of the Registrable Securities included
therein pursuant to any method or combination of methods legally
available to, and requested by, any Holder named therein. The
Company shall maintain a Shelf in accordance with the terms hereof,
and shall prepare and file with the SEC such amendments, including
post-effective amendments, and supplements as may be necessary to
keep a Shelf continuously effective, available for use and in
compliance with the provisions of the Securities Act until such
time as there are no longer any Registrable Securities. In the
event the Company files a Form S-1 Shelf, the Company shall use its
commercially reasonable efforts to convert the Form S-1 Shelf (and
any Subsequent Shelf Registration) to a Form S-3 Shelf as soon as
practicable after the Company is eligible to use Form
S-3.
2.1.2 Subsequent Shelf Registration.
If any Shelf ceases to be effective under the Securities Act for
any reason at any time while Registrable Securities are still
outstanding, the Company shall, subject to Section 3.4, use its
commercially reasonable efforts to as promptly as is reasonably
practicable cause such Shelf to again become effective under the
Securities Act (including obtaining the prompt withdrawal of any
order suspending the effectiveness of such Shelf), and shall use
its commercially reasonable efforts to as promptly as is reasonably
practicable amend such Shelf in a manner reasonably expected to
result in the withdrawal of any order suspending the effectiveness
of such Shelf or file an additional registration statement as a
Shelf Registration (a “Subsequent Shelf
Registration”) registering the resale of all
Registrable Securities (determined as of two business days prior to
such filing), and pursuant to any method or combination of methods
legally available to, and requested by, any Holder named therein.
If a Subsequent Shelf Registration is filed, the Company shall use
its commercially reasonable efforts to (i) cause such Subsequent
Shelf Registration to become effective under the Securities Act as
promptly as is reasonably practicable after the filing thereof (it
being agreed that the Subsequent Shelf Registration shall be an
automatic shelf registration statement (as defined in Rule 405
promulgated under the Securities Act) if the Company is a
well-known seasoned issuer (as defined in Rule 405 promulgated
under the Securities Act) at the most recent applicable eligibility
determination date) and (ii) keep such Subsequent Shelf
Registration continuously effective, available for use and in
compliance with the provisions of the Securities Act until such
time as there are no longer any Registrable Securities. Any such
Subsequent Shelf Registration shall be on Form S-3 to the extent
that the Company is eligible to use such form. Otherwise, such
Subsequent Shelf Registration shall be on another appropriate
form.
2.1.3 Additional Registerable
Securities. In the event that any Holder holds Registrable
Securities that are not registered for resale on a delayed or
continuous basis, the Company, upon request of a Holder that holds
at least five (5.0%) percent of the Registrable Securities, shall
promptly use its commercially reasonable efforts to cause the
resale of such Registrable Securities to be covered by either, at
the Company’s option, the Shelf (including by means of a
post-effective amendment) or a Subsequent Shelf Registration and
cause the same to become effective as soon as practicable after
such filing and such Shelf or Subsequent Shelf Registration shall
be subject to the terms hereof; provided, however, that the Company shall
only be required to cause such Registrable Securities to be so
covered twice per calendar year.
2.2 Market Stand-off. In connection
with any Underwritten Offering of equity securities of the Company
(other than a Block Trade), each Holder given an opportunity to
participate in the Underwritten Offering pursuant to the terms of
this Agreement that holds more than 10% of the issued and
outstanding Common Stock agrees that it shall not Transfer any
shares of Common Stock or other equity securities of the Company
(other than those included in such offering pursuant to this
Agreement), without the prior written consent of the Company,
during the 90-day period beginning on the date of pricing of such
offering or such shorter period during which the Company agrees not
to conduct an underwritten primary offering of Common Stock, except
in the event the Underwriters managing the offering otherwise agree
by written consent.
2.3 Block Trades.
2.3.1 Notwithstanding the
foregoing, at any time and from time to time when an effective
Shelf is on file with the Commission and effective, if a Demanding
Holder wishes to engage in an underwritten or other coordinated
registered offering not involving a “roadshow,” an
offer commonly known as a “block trade” (a
“Block
Trade”), with a total offering price reasonably
expected to exceed, in the aggregate, either (x) $5 million or (y)
all remaining Registrable Securities held by the Demanding Holder,
then such Demanding Holder need only to notify the Company of the
Block Trade at least five (5) business days prior to the day such
offering is to commence and the Company shall as expeditiously as
possible use its commercially reasonable efforts to facilitate such
Block Trade; provided that the Demanding
Holders representing a majority of the Registrable Securities
wishing to engage in the Block Trade shall use commercially
reasonable efforts to work with the Company and any Underwriters
prior to making such request in order to facilitate preparation of
the registration statement, prospectus and other offering
documentation related to the Block Trade.
2.3.2 Prior to the filing
of the applicable “red xxxxxxx” prospectus or
prospectus supplement used in connection with a Block Trade, a
majority-in-interest of the Demanding Holders initiating such Block
Trade shall have the right to submit a Withdrawal Notice to the
Company and the Underwriter or Underwriters (if any) of their
intention to withdraw from such Block Trade. Notwithstanding
anything to the contrary in this Agreement, the Company shall be
responsible for the Registration Expenses incurred in connection
with a block trade prior to its withdrawal under this Section 2.3.2.
2.3.3 The Demanding
Holder in a Block Trade shall have the right to select the
Underwriters for such Block Trade (which shall consist of one or
more reputable nationally recognized investment
banks).
ARTICLE III
COMPANY PROCEDURES
3.1 General
Procedures. In connection
with any Shelf, the Company shall use its commercially reasonable
efforts to effect such Registration to permit the sale of such
Registrable Securities in accordance with the intended plan of
distribution thereof, and pursuant thereto the Company shall, as
expeditiously as possible:
3.1.1 prepare and file
with the Commission as soon as practicable a Registration Statement
with respect to such Registrable Securities and use its reasonable
best efforts to cause such Registration Statement to become
effective and remain effective until all Registrable Securities
have ceased to be Registrable Securities;
3.1.2 prepare and file
with the Commission such amendments and post-effective amendments
to the Registration Statement, and such supplements to the
Prospectus, as may be reasonably requested by any Holder that holds
at least five (5.0%) percent of the Registrable Securities
registered on such Registration Statement or any Underwriter of
Registrable Securities or as may be required by the rules,
regulations or instructions applicable to the registration form
used by the Company or by the Securities Act or rules and
regulations thereunder to keep the Registration Statement effective
until all Registrable Securities covered by such Registration
Statement are sold in accordance with the intended plan of
distribution set forth in such Registration Statement or supplement
to the Prospectus;
3.1.3 prior to filing a
Registration Statement or Prospectus, or any amendment or
supplement thereto, furnish without charge to the Underwriters, if
any, and the Holders of Registrable Securities included in such
Registration, and such Holders’ 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 Underwriters and the Holders of Registrable Securities
included in such Registration or the legal counsel for any such
Holders may request in order to facilitate the disposition of the
Registrable Securities owned by such Holders;
3.1.4 prior to any public
offering of Registrable Securities (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 Holders of
Registrable Securities included in such Registration Statement (in
light of their intended plan of distribution) may request (or
provide evidence satisfactory to such Holders that the Registrable
Securities are exempt from such registration or qualification) 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 Holders of Registrable Securities included
in such Registration Statement 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 or
take any action to which it would be subject to general service of
process or taxation in any such jurisdiction where it is not then
otherwise so subject;
3.1.5 cause all such
Registrable Securities to be listed on each national securities
exchange on which similar securities issued by the Company are then
listed;
3.1.6 provide a transfer
agent or warrant agent, as applicable, and registrar for all such
Registrable Securities no later than the effective date of such
Registration Statement;
3.1.7 advise each seller
of such Registrable Securities, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop
order by the Commission suspending the effectiveness of such
Registration Statement or the initiation or threatening of any
proceeding for such purpose and promptly use its reasonable best
efforts to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued;
3.1.8 at least five (5)
days prior to the filing of any Registration Statement or
Prospectus or any amendment or supplement to such Registration
Statement or Prospectus (or such shorter period of time as may be
necessary in order to comply with the Securities Act, the Exchange
Act, and the rules and regulations promulgated under the Securities
Act or Exchange Act, as applicable), furnish a copy thereof to each
seller of such Registrable Securities or its counsel (excluding any
exhibits thereto and any filing made under the Exchange Act that is
to be incorporated by reference therein);
3.1.9 notify the Holders
at any time when a Prospectus relating to such Registration
Statement is required to be delivered under the Securities Act, of
the happening of any event as a result of which the Prospectus
included in such Registration Statement, as then in effect,
includes a Misstatement, and then to correct such Misstatement as
set forth in Section
3.4 hereof;
3.1.10 permit a
representative of the Holders, the Underwriters, if any, and any
attorney or accountant retained by such Holders or Underwriter to
participate, at each such person’s own expense, in the
preparation of the Registration Statement, and cause the
Company’s officers, directors and employees to supply all
information reasonably requested by any such representative,
Underwriter, attorney or accountant in connection with the
Registration; provided, however, that such
representatives or Underwriters agree to confidentiality
arrangements reasonably satisfactory to the Company, prior to the
release or disclosure of any such information;
3.1.11 on the date the
Registrable Securities are delivered for sale pursuant to such
Registration, obtain an opinion, dated such date, of counsel
representing the Company for the purposes of such Registration,
addressed to the Holders, the placement agent or sales agent, if
any, and the Underwriters, if any, covering such legal matters with
respect to the Registration in respect of which such opinion is
being given as the Holders, placement agent, sales agent, or
Underwriter may reasonably request and as are customarily included
in such opinions and negative assurance letters, and reasonably
satisfactory to a majority-in-interest of the participating
Holders;
3.1.12 make available to
its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least twelve (12)
months beginning with the first day of the Company’s first
full calendar quarter after the effective date of the Registration
Statement which satisfies the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any successor rule then
in effect);
3.1.13 otherwise, in good
faith, cooperate reasonably with, and take such customary actions
as may reasonably be requested by the Holders, in connection with
such Registration.
3.2 Registration
Expenses. The Registration
Expenses of all Registrations shall be borne by the Company. It is
acknowledged by the Holders that the Holders shall bear all
incremental selling expenses relating to the sale of Registrable
Securities, such as Underwriters’ or agents’
commissions and discounts, brokerage fees, Underwriter marketing
costs and, other than as set forth in the definition of
“Registration
Expenses,” all reasonable fees and expenses of any
legal counsel representing the Holders.
3.3 Requirements
for Participation in Registration Statement. Notwithstanding
anything in this Agreement to the contrary, if any Holder does not
provide the Company with its requested Holder Information, the
Company may exclude such Holder’s Registrable Securities from
the applicable Registration Statement or Prospectus if the Company
determines, based on the advice of counsel, that such information
is necessary to effect the registration and such Holder continues
thereafter to withhold such information. No person may participate
in any Underwritten Offering or other coordinated offering for
equity securities of the Company pursuant to a Registration
initiated by the Company hereunder unless such person (i) agrees to
sell such person’s securities on the basis provided in any
arrangements approved by the Company and (ii) completes and
executes all customary questionnaires, powers of attorney,
indemnities, lock-up agreements, underwriting or other agreements
and other customary documents as may be reasonably required under
the terms of such arrangements. The exclusion of a Holder’s
Registrable Securities as a result of this Section 3.3 shall not
affect the registration of the other Registrable Securities to be
included in such Registration.
3.4 Suspension of Sales; Adverse
Disclosure; Restrictions on Registration
Rights.
3.4.1 Upon receipt of
written notice from the Company that a Registration Statement or
Prospectus contains a Misstatement, each of the Holders shall
forthwith discontinue disposition of Registrable Securities until
it has received copies of a supplemented or amended Prospectus
correcting the Misstatement (it being understood that the Company
hereby covenants to prepare and file such supplement or amendment
as soon as practicable after the time of such notice), or until it
is advised in writing by the Company that the use of the Prospectus
may be resumed.
3.4.2 If the filing,
initial effectiveness or continued use of a Registration Statement
in respect of any Registration at any time would (a) require
the Company to make an Adverse Disclosure, (b) require the
inclusion in such Registration Statement of financial statements
that are unavailable to the Company for reasons beyond the
Company’s control, or (c) in the good faith judgment of
the majority of the Board such Registration, be seriously
detrimental to the Company and the majority of the Board concludes
as a result that it is essential to defer such filing, initial
effectiveness or continued use at such time, the Company may, upon
giving prompt written notice of such action to the Holders, delay
the filing or initial effectiveness of, or suspend use of, such
Registration Statement for the shortest period of time determined
in good faith by the Company to be necessary for such purpose. In
the event the Company exercises its rights under this Section 3.4.2, the Holders
agree to suspend, immediately upon their receipt of the notice
referred to above, their use of the Prospectus relating to any
Registration in connection with any sale or offer to sell
Registrable Securities.
3.5 Reporting
Obligations. As long as any
Holder shall own Registrable Securities, the Company, at all times
while it shall be a reporting company under the Exchange Act,
covenants to file timely (or obtain extensions in respect thereof
and file within the applicable grace period) all reports required
to be filed by the Company after the date hereof pursuant to
Sections 13(a) or 15(d) of the Exchange Act and to promptly furnish
the Holders with true and complete copies of all such filings;
provided that any
documents publicly filed or furnished with the Commission pursuant
to the Electronic Data Gathering, Analysis and Retrieval System
shall be deemed to have been furnished or delivered to the Holders
pursuant to this Section
3.5. The Company further covenants that it shall take such
further action as any Holder may reasonably request, all to the
extent required from time to time to enable such Holder to sell
shares of Common Stock held by such Holder without registration
under the Securities Act within the limitation of the exemptions
provided by Rule 144 promulgated under the Securities Act (or any
successor rule then in effect). Upon the request of any Holder, the
Company shall deliver to such Holder a written certification of a
duly authorized officer as to whether it has complied with such
requirements.
ARTICLE IV
INDEMNIFICATION
AND CONTRIBUTION
4.1 Indemnification.
4.1.1 The Company agrees
to indemnify, to the extent permitted by law, each Holder of
Registrable Securities, its officers, directors and agents and each
person who controls such Holder (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities
and out-of-pocket expenses (including without limitation reasonable
outside attorneys’ fees) resulting from any untrue or alleged
untrue statement of material fact contained in any Registration
Statement, Prospectus or preliminary Prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as the
same are caused by or contained in any information or affidavit so
furnished in writing to the Company by such Holder expressly for
use therein.
4.1.2 In connection with
any Registration Statement in which a Holder of Registrable
Securities is participating, such Holder shall furnish to the
Company in writing such information and affidavits as the Company
reasonably requests for use in connection with any such
Registration Statement or Prospectus (the “Holder
Information”) and, to the extent permitted by law,
shall indemnify the Company, its directors, officers and agents and
each person who controls the Company (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities
and out-of-pocket expenses (including without limitation reasonable
outside attorneys’ fees) resulting from any untrue or alleged
untrue statement of material fact contained in any Registration
Statement, Prospectus or preliminary Prospectus or any amendment
thereof or supplement thereto or any omission or alleged omission
of a material fact required to be stated therein or necessary to
make the statements therein not misleading, but only to the extent
that such untrue statement or omission is contained in any
information or affidavit so furnished in writing by such Holder
expressly for use therein; provided, however, that the obligation
to indemnify shall be several, not joint and several, among such
Holders of Registrable Securities, and the liability of each such
Holder of Registrable Securities shall be in proportion to and
limited to the net proceeds received by such Holder from the sale
of Registrable Securities pursuant to such Registration Statement.
The Holders of Registrable Securities shall indemnify the
Underwriters, their officers, directors and each person who
controls such Underwriters (within the meaning of the Securities
Act) to the same extent as provided in the foregoing with respect
to indemnification of the Company.
4.1.3 Any person entitled
to indemnification herein shall (i) give prompt written notice to
the indemnifying party of any claim with respect to which it seeks
indemnification (provided that the failure to give prompt notice
shall not impair any person’s right to indemnification
hereunder to the extent such failure has not materially prejudiced
the indemnifying party) and (ii) unless in such indemnified
party’s reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to
such claim, permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified
party. If such defense is assumed, the indemnifying party shall not
be subject to any liability for any settlement made by the
indemnified party without its consent (but such consent shall not
be unreasonably withheld). An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim shall
not be obligated to pay the fees and expenses of more than one
counsel for all parties indemnified by such indemnifying party with
respect to such claim, unless in the reasonable judgment of any
indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with
respect to such claim. No indemnifying party shall, without the
consent of the indemnified party, consent to the entry of any
judgment or enter into any settlement which cannot be settled in
all respects by the payment of money (and such money is so paid by
the indemnifying party pursuant to the terms of such settlement) or
which settlement does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect to such claim or
litigation.
4.1.4 The indemnification
provided for under this Agreement shall remain in full force and
effect regardless of any investigation made by or on behalf of the
indemnified party or any officer, director or controlling person of
such indemnified party and shall survive the transfer of
securities. The Company and each Holder of Registrable Securities
participating in an offering also agrees to make such provisions as
are reasonably requested by any indemnified party for contribution
to such party in the event the Company’s or such
Holder’s indemnification is unavailable for any
reason.
4.1.5 If the
indemnification provided under Section 4.1 hereof from the
indemnifying party is unavailable or insufficient to hold harmless
an indemnified party in respect of any losses, claims, damages,
liabilities and out-of-pocket expenses referred to herein, then the
indemnifying party, in lieu of indemnifying the indemnified party,
shall contribute to the amount paid or payable by the indemnified
party as a result of such losses, claims, damages, liabilities and
out-of-pocket expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and the
indemnified party, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and
indemnified party shall be determined by reference to, among other
things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, was made by, or relates to
information supplied by, such indemnifying party or indemnified
party, and the indemnifying party’s and indemnified
party’s relative intent, knowledge, access to information and
opportunity to correct or prevent such action; provided, however, that the liability of
any Holder under this Section 4.1.5 shall be limited
to the amount of the net proceeds received by such Holder in such
offering giving rise to such liability. The amount paid or payable
by a party as a result of the losses or other liabilities referred
to above shall be deemed to include, subject to the limitations set
forth in Sections
4.1.1, 4.1.2 and 4.1.3 above, any legal or
other fees, charges or out-of-pocket expenses reasonably incurred
by such party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 4.1.5 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 this Section 4.1.5. No person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution pursuant to this Section 4.1.5 from any person
who was not guilty of such fraudulent
misrepresentation.
ARTICLE V
MISCELLANEOUS
5.1 Notices.
All notices and other communications among the parties shall be in
writing and shall be deemed to have been duly given (i) when
delivered in person, (ii) when delivered after posting in the
United States mail having been sent registered or certified mail
return receipt requested, postage prepaid, (iii) when delivered by
FedEx or other nationally recognized overnight delivery service or
(iv) when e-mailed during normal business hours (and otherwise as
of the immediately following Business Day), addressed as follows.
Any notice or communication under this Agreement must be addressed,
if to the Company, to 0000 Xxxx Xxxx., Xxxxx #000, Xxxxxxxxxx XX
00000, Attention: Xxxxxx Xxxx, Email: xxxxxx@xxxxxx.xxx, and, if to
any Holder, at such Holder’s address or facsimile number as
set forth in the Company’s books and records. Any party may
change its address for notice at any time and from time to time by
written notice to the other parties hereto, and such change of
address shall become effective thirty (30) days after delivery of
such notice as provided in this Section 5.1.
5.2 Assignment;
No Third-Party Beneficiaries.
5.2.1 This Agreement and
the rights, duties and obligations of the Company hereunder may not
be assigned or delegated by the Company in whole or in
part.
5.2.2 A Holder may assign
or delegate such Holder’s rights, duties or obligations under
this Agreement, in whole or in part, to any person to whom it
transfers Registrable Securities; provided that such Registrable
Securities remain Registrable Securities following such transfer
and such person agrees to become bound by the terms and provisions
of this Agreement.
5.2.3 No assignment by
any party hereto of such party’s rights, duties and
obligations hereunder shall be binding upon or obligate the Company
unless and until the Company shall have received (i) written notice
of such assignment as provided in Section 5.1 hereof and (ii) the
written agreement of the assignee, in a form reasonably
satisfactory to the Company, to be bound by the terms and
provisions of this Agreement (which may be accomplished by an
addendum or certificate of joinder to this Agreement).
5.2.4 Subject to the
foregoing, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective permitted
successors and assigns. Any attempted assignment in violation of
the terms of this Section 5.02 shall be null and void, ab
initio.
5.2.5 This Agreement
shall not confer any rights or benefits on any persons that are not
parties hereto, other than as expressly set forth in this Agreement
and Section 5.2
hereof.
5.3 Captions;
Counterparts. The captions in
this Agreement are for convenience only and shall not be considered
a part of or affect the construction or interpretation of any
provision of this Agreement. This Agreement may be executed in two
(2) or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
5.4 Governing
Law. THIS AGREEMENT,
AND ALL CLAIMS OR CAUSES OF ACTION BASED UPON, ARISING OUT OF, OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY,
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEVADA, WITHOUT GIVING EFFECT TO PRINCIPLES OR RULES
OF CONFLICT OF LAWS TO THE EXTENT SUCH PRINCIPLES OR RULES WOULD
REQUIRE OR PERMIT THE APPLICATION OF LAWS OF ANOTHER
JURISDICTION.
5.5 Jurisdiction; Waiver of Jury
Trial.
5.5.1 Each party
irrevocably submits to the exclusive jurisdiction of (a) the state
courts in Carson City, Nevada and (b) the United States District
Court for the District of Nevada, for the purposes of any Action
arising out of this Agreement, the other Transaction Documents or
any transaction contemplated hereunder or thereunder. Each Party
agrees to commence any such Action either in the United States
District Court for the District of Nevada, or if such Action may
not be brought in such court for jurisdictional reasons, in the
state courts in New Castle County, Delaware. Each Party further
agrees that service of any process, summons, notice or document by
U.S. registered mail to such Party’s respective address set
forth above shall be effective service of process for any Action in
state or Federal court with respect to any matters to which it has
submitted to jurisdiction in this Section 5.5.1. Each Party
irrevocably and unconditionally waives any objection to the laying
of venue of any Action arising out of this Agreement or the
transactions contemplated by this Agreement in (i) the state courts
in Carson City, Nevada, or (ii) the United States District Court
for the District of Nevada, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such
court that any such Action brought in any such court has been
brought in an inconvenient forum.
5.5.2 EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION BASED UPON, ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
5.6 Amendments
and Modifications. Upon the written
consent of (a) the Company and (b) the Holders of a majority
of the total Registrable Securities, compliance with any of the
provisions, covenants and conditions set forth in this Agreement
may be waived, or any of such provisions, covenants or conditions
may be amended or modified; provided, however, that in the event any
such waiver, amendment or modification would be adverse in any
material respect to the material rights or obligations hereunder of
any Holder, the written consent of such Holder will also be
required; provided
further that in the event any such waiver, amendment or
modification would be disproportionate and adverse in any material
respect to the material rights or obligations hereunder of a
Holder, the written consent of such Holder will also be required.
No course of dealing between any Holder or the Company and any
other party hereto or any failure or delay on the part of a Holder
or the Company in exercising any rights or remedies under this
Agreement shall operate as a waiver of any rights or remedies of
any Holder or the Company. No single or partial exercise of any
rights or remedies under this Agreement by a party shall operate as
a waiver or preclude the exercise of any other rights or remedies
hereunder or thereunder by such party.
5.7 Term.
This Agreement shall terminate with respect to any Holder on the
date that such Holder no longer holds any Registrable Securities.
The provisions of Section 3.5 and Article IV shall survive any
termination.
5.8 Holder Information. Each Holder
agrees, if requested in writing, to represent to the Company the
total number of Registrable Securities held by such Holder in order
for the Company to make determinations hereunder.
[SIGNATURE PAGES FOLLOW]
IN
WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first written above.
COMPANY:
Liberated
Syndication, Inc.
a
Nevada corporation
By:/s/ Xxxxxx Xxx
Xxxx
Name:
Xxxxxx Xxx Xxxx
Title: President and
COO
HOLDERS:
/s/ Xxxxx Xxxxxxxx
Xxxxx
Xxxxxxxx
Techwhale,
LLC
By:
/s/ Xxxxx
Xxxxxx
Name:
Xxxxx Xxxxxx
Title:
Member
Schedule A
Xxxxx
Xxxxxxxx
Techwhale,
LLC
