Two Rivers Water & Farming Company 8-K [turv-8k_091417.htm]

 

Exhibit 10.2

 

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of September 14,
2017, by and between TWO RIVERS WATER & FARMING COMPANY, a Colorado corporation
(the “Company”), and SPOTFIN FUNDING LLC, a Florida limited liability company
(together with it permitted assigns, the “Buyer”). Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings set forth in
the equity purchase agreement by and between the parties hereto, dated as of the
date hereof (the “Purchase Agreement”).

WHEREAS:

The Company has agreed, upon the terms and subject to the conditions of the
Purchase Agreement, to sell to the Buyer up to Five Million Dollars
($5,000,000.00) of Put Shares and to induce the Buyer to enter into the Purchase
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the “Securities
Act”), and applicable state securities laws.

NOW, THEREFORE, in consideration of the promises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Buyer hereby
agree as follows:

1.       

DEFINITIONS.

As used in this Agreement, the following terms shall have the following
meanings:

a.       

“Investor” means the Buyer, any transferee or assignee thereof to whom a Buyer
assigns its rights under this Agreement in accordance with Section 9 and who
agrees to become bound by the provisions of this Agreement, and any transferee
or assignee thereof to whom a transferee or assignee assigns its rights under
this Agreement in accordance with Section 9 and who agrees to become bound by
the provisions of this Agreement.

b.       

“Person” means any individual or entity including but not limited to any
corporation, a limited liability company, an association, a partnership, an
organization, a business, a Florida limited liability company, a governmental or
political subdivision thereof or a governmental agency.

c.       

“Register,” “registered,” and “registration” refer to a registration effected by
preparing and filing one or more registration statements of the Company in
compliance with the Securities Act and/or pursuant to Rule 415 under the
Securities Act or any successor rule providing for offering securities on a
continuous basis (“Rule 415”), and the declaration or ordering of effectiveness
of such registration statement(s) by the United States Securities and Exchange
Commission (the “SEC”).

d.       

“Registrable Securities” means all of the Put Shares which have been, or which
may, from time to time be issued, including without limitation all of the shares
of common stock which have been issued or will be issued to the Investor under
the Purchase Agreement (without regard to any limitation or restriction on
purchases), and any and all shares of capital stock issued or issuable with
respect to the Put Shares, Commitment Shares (as defined in the Purchase
Agreement) (the “Commitment Shares”), or shares of common stock issued to
Investor as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise, without regard to any limitation on
purchases under the Purchase Agreement.

e.       

“Registration Statement” means one or more registration statements of the
Company covering only the sale of the Registrable Securities.

 

 

  

2.       

REGISTRATION.

a.       

Mandatory Registration. The Company shall, within 15 calendar days of the date
hereof, file with the SEC an initial Registration Statement covering the maximum
number of Registrable Securities (beginning with the Commitment Shares) as shall
be permitted to be included thereon in accordance with applicable SEC rules,
regulations and interpretations so as to permit the resale of such Registrable
Securities by the Investor, including but not limited to under Rule 415 under
the Securities Act, at then prevailing market prices (and not fixed prices), as
mutually determined by both the Company and the Investor in consultation with
their respective legal counsel, subject to the aggregate number of authorized
shares of the Company’s Common Stock then available for issuance in its
Certificate of Incorporation. The initial Registration Statement shall register
only the Registrable Securities. The Investor and its counsel shall have a
reasonable opportunity to review and comment upon such Registration Statement
and any amendment or supplement to such Registration Statement and any related
prospectus prior to its filing with the SEC, and the Company shall give due
consideration to all reasonable comments. The Investor shall furnish all
information reasonably requested by the Company for inclusion therein. The
Company shall use its reasonable best efforts to have the Registration Statement
and any amendment declared effective by the SEC within 90 calendar days of the
date hereof (with the understanding that it is the intent of the Company and
Investor that such Registration Statement and any amendment be declared
effective by the SEC at the earliest possible date). The Company shall use
reasonable best efforts to keep the Registration Statement effective, including
but not limited to pursuant to Rule 415 promulgated under the Securities Act,
and available for the resale by the Investor of all of the Registrable
Securities covered thereby at all times until the earlier of (i) the date as of
which the Investor may sell all of the Registrable Securities without
restriction pursuant to Rule 144 promulgated under the Securities and (ii) the
date on which the Investor shall have sold all the Registrable Securities
covered thereby and no Available Amount remains under the Purchase Agreement
(the “Registration Period”). The Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading.

b.       

Rule 424 Prospectus. The Company shall, as required by applicable securities
regulations, from time to time file with the SEC, pursuant to Rule 424
promulgated under the Securities Act, the prospectus and prospectus supplements,
if any, to be used in connection with sales of the Registrable Securities under
the Registration Statement. The Investor and its counsel shall have a reasonable
opportunity to review and comment upon such prospectus prior to its filing with
the SEC, and the Company shall give due consideration to all such comments. The
Investor shall use its reasonable best efforts to comment upon such prospectus
within one (1) Business Day from the date the Investor receives the final
pre-filing version of such prospectus.

c.       

Sufficient Number of Shares Registered. In the event the number of shares
available under the Registration Statement is insufficient to cover all of the
Registrable Securities, the Company shall amend the Registration Statement or
file a new Registration Statement (a “New Registration Statement”), so as to
cover all of such Registrable Securities (subject to the limitations set forth
in Section 2(a)) as soon as practicable, but in any event not later than ten
(10) Business Days after the necessity therefor arises, subject to any limits
that may be imposed by the SEC pursuant to Rule 415 under the Securities Act.
The Company shall use it reasonable best efforts to cause such amendment and/or
New Registration Statement to become effective as soon as practicable following
the filing thereof. In the event that any of the Commitment Shares are not
included in the Registration Statement, or have not been included in any New
Registration Statement and the Company files any other registration statement
under the Securities Act (other than on Form S-4, Form S-8, or with respect to
other employee related plans or rights offerings) (“Other Registration
Statement”) then the Company shall include in such Other Registration Statement
first all of such Commitment Shares that have not been previously registered,
second all of Put Shares that not have been previously registered, and third any
other securities the Company wishes to include in such Other Registration
Statement. The Company agrees that it shall not file any such Other Registration
Statement unless all of the Put Shares and Commitment Shares have been included
in such Other Registration Statement or otherwise have been registered for
resale as described above. 

 

 

  

d.       

Offering. If the staff of the SEC (the “Staff”) or the SEC seeks to characterize
any offering pursuant to a Registration Statement filed pursuant to this
Agreement as constituting an offering of securities that does not permit such
Registration Statement to become effective and be used for resales by the
Investor under Rule 415 at then-prevailing market prices (and not fixed prices),
or if after the filing of the initial Registration Statement with the SEC
pursuant to Section 2(a), the Company is otherwise required by the Staff or the
SEC to reduce the number of Registrable Securities included in such initial
Registration Statement, then the Company shall reduce the number of Registrable
Securities to be included in such initial Registration Statement (with the prior
consent, which shall not be unreasonably withheld, of the Investor and its legal
counsel as to the specific Registrable Securities to be removed therefrom) until
such time as the Staff and the SEC shall so permit such Registration Statement
to become effective and be used as aforesaid. In the event of any reduction in
Registrable Securities pursuant to this paragraph, the Company shall file one or
more New Registration Statements in accordance with Section 2(c) until such time
as all Registrable Securities have been included in Registration Statements that
have been declared effective and the prospectus contained therein is available
for use by the Investor. Notwithstanding any provision herein or in the Purchase
Agreement to the contrary, the Company’s obligations to register Registrable
Securities (and any related conditions to the Investor’s obligations) shall be
qualified as necessary to comport with any requirement of the SEC or the Staff
as addressed in this Section 2(d).

e.       

Suspension Period.

(i)       

Notwithstanding anything herein to the contrary, subject to the provisions of
this Section 2(e) and a good faith determination by the Company that it is in
the best interests of the Company to suspend the use of any registration
statement, following the effectiveness of such registration statement (and the
filings with any federal or state securities commissions), the Company, by
written notice to the Investor, may direct the Investor to suspend sales of the
Registrable Securities pursuant to such registration statement for such times as
the Company reasonably may determine is necessary and advisable (but in no event
for more than 30 days in any 90-day period or 90 days in any 365-day period), if
any of the following events shall occur: (i) there is material non-public
information regarding the Company that (A) the Company determines not to be in
the Company’s best interest to disclose, (B) would, in the good faith
determination of the Company, require any revisions to the Registration
Statement so that 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 (C) the Company is not otherwise required to disclose,
(ii) there is a significant bone fide business opportunity (including the
acquisition or disposition of assets (other than in the ordinary course of
business), including any significant merger, consolidation, tender offer or
other similar transaction) available to the Company which the Company determines
not to be in the Company’s best interest to disclose, or (iii) the Company is
required to file a post-effective amendment to a Registration Statement to
incorporate the Company’s quarterly or annual reports or audited financial
statements on Forms 10-Q and 10-K; provided that no suspension period permitted
pursuant to this clause (iii) shall continue for more than 5 consecutive
business days.

(ii)       

Upon the earlier to occur of (A) the Company delivering to the Investor an End
of Suspension Notice (as defined below) and (B) the end of the maximum
permissible suspension period, the Company shall promptly amend or supplement
the registration statement on a post-effective basis, if necessary, or to take
such action as is necessary to make resumed use of the registration statement
compatible with the Company’s best interests, as applicable, so as to permit the
Investors to resume sales of the Registrable Securities as soon as possible.

(iii)       

In the case of an event that causes the Company to suspend the use of a
Registration Statement (a “Suspension Event”), the Company shall give written
notice (a “Suspension Notice”) to the Investor to suspend sales of the
Registrable Securities, and such notice shall state that such suspension shall
continue only for so long as the Suspension Event or its effect is continuing
and the Company is taking all reasonable steps to terminate suspension of the
effectiveness of the Registration Statement as promptly as possible. The
Investor shall not effect any sales of the Registrable Securities pursuant to
such Registration Statement (or such filings) at any time after it has received
a Suspension Notice from the Company and prior to receipt of an End of
Suspension Notice. If so directed by the Company, the Investor will deliver to
the Company (at the expense of the Company) all copies other than permanent file
copies then in such Investor’s possession of the prospectus covering the
Registrable Securities at the time of receipt of the Suspension Notice. The
Investor may recommence effecting sales of the Registrable Securities pursuant
to the registration statement (or such filings) following further notice to such
effect (an “End of Suspension Notice”) from the Company, which End of Suspension
Notice shall be given by the Company to the Investor in the manner described
above promptly following the conclusion of any Suspension Event and its effect. 

 

 

  

3.       

RELATED OBLIGATIONS.

With respect to the Registration Statement and whenever any Registrable
Securities are to be registered pursuant to Section 2 including on any New
Registration Statement, the Company shall use its reasonable best efforts to
effect the registration of the Registrable Securities in accordance with the
intended method of disposition thereof and, pursuant thereto, the Company shall
have the following obligations:

a.       

The Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to any registration statement and the
prospectus used in connection with such registration statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the Securities Act, as may
be necessary to keep the Registration Statement or any New Registration
Statement effective at all times during the Registration Period, and, during
such period, comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities of the Company covered by the
Registration Statement or any New Registration Statement until such time as all
of such Registrable Securities shall have been disposed of in accordance with
the intended methods of disposition by the seller or sellers thereof as set
forth in such registration statement.

b.       

The Company shall permit the Investor to review and comment upon the
Registration Statement or any New Registration Statement and all amendments and
supplements thereto at least two (2) Business Days prior to their filing with
the SEC, and not file any document in a form to which Investor reasonably
objects. The Investor shall use its reasonable best efforts to comment upon the
Registration Statement or any New Registration Statement and any amendments or
supplements thereto within two (2) Business Days from the date the Investor
receives the final version thereof. The Company shall furnish to the Investor,
without charge any correspondence from the SEC or the staff of the SEC to the
Company or its representatives relating to the Registration Statement or any New
Registration Statement.

c.       

Upon request of the Investor, the Company shall furnish to the Investor, (i)
promptly after the same is prepared and filed with the SEC, at least one copy of
such registration statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits, (ii) upon the effectiveness of any registration statement, a copy
of the prospectus included in such registration statement and all amendments and
supplements thereto (or such other number of copies as the Investor may
reasonably request) and (iii) such other documents, including copies of any
preliminary or final prospectus, as the Investor may reasonably request from
time to time in order to facilitate the disposition of the Registrable
Securities owned by the Investor. For the avoidance of doubt, any filing
available to the Investor via the SEC’s live EDGAR system shall be deemed
“furnished to the Investor” hereunder.

d.       

The Company shall use reasonable best efforts to (i) register and qualify the
Registrable Securities covered by a registration statement under such other
securities or “blue sky” laws of such jurisdictions in the United States as the
Investor reasonably requests, (ii) prepare and file in those jurisdictions, such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications in
effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (x) qualify to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d), (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of process in any such
jurisdiction. The Company shall promptly notify the Investor who holds
Registrable Securities of the receipt by the Company of any notification with
respect to the suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or “blue sky” laws of any
jurisdiction in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such purpose. 

 

 

  

e.       

As promptly as practicable after becoming aware of such event or facts, the
Company shall notify the Investor in writing of the happening of any event or
existence of such facts as a result of which the prospectus included in any
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a 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 promptly prepare a supplement or
amendment to such registration statement to correct such untrue statement or
omission, and deliver a copy of such supplement or amendment to the Investor (or
such other number of copies as the Investor may reasonably request). The Company
shall also promptly notify the Investor in writing (i) when a prospectus or any
prospectus supplement or post-effective amendment has been filed, and when a
registration statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to the Investor by
electronic mail or facsimile on the same day of such effectiveness and by
overnight mail), (ii) of any request by the SEC for amendments or supplements to
any registration statement or related prospectus or related information, and
(iii) of the Company’s reasonable determination that a post-effective amendment
to a registration statement would be appropriate.

f.       

The Company shall use its reasonable best efforts to prevent the issuance of any
stop order or other suspension of effectiveness of any registration statement,
or the suspension of the qualification of any Registrable Securities for sale in
any jurisdiction and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest practicable time and to
notify the Investor of the issuance of such order and the resolution thereof or
its receipt of actual notice of the initiation or threat of any proceeding for
such purpose.

g.       

The Company shall (i) cause all the Registrable Securities to be listed on each
securities exchange on which securities of the same class or series issued by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii) secure
designation and quotation of all the Registrable Securities on the Principal
Market. The Company shall pay all fees and expenses in connection with
satisfying its obligation under this Section.

h.       

The Company shall cooperate with the Investor to facilitate the timely
preparation and delivery of certificates (not bearing any restrictive legend)
representing the Registrable Securities to be offered pursuant to any
registration statement and enable such certificates to be in such denominations
or amounts as the Investor may reasonably request and registered in such names
as the Investor may request.

i.       

The Company shall at all times provide a transfer agent and registrar with
respect to its Common Stock.

j.       

If reasonably requested by the Investor, the Company shall (i) as promptly as
practicable incorporate in a prospectus supplement or post-effective amendment
such information as the Investor believes should be included therein relating to
the sale and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities
being sold, the purchase price being paid therefor and any other terms of the
offering of the Registrable Securities; (ii) make all required filings of such
prospectus supplement or post-effective amendment as soon as practicable upon
notification of the matters to be incorporated in such prospectus supplement or
post-effective amendment; and (iii) supplement or make amendments to any
registration statement.

k.       

The Company shall use its reasonable best efforts to cause the Registrable
Securities covered by any registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to consummate the disposition of such Registrable Securities.

l.       

Within one (1) Business Day after any registration statement which includes the
Registrable Securities is ordered effective by the SEC, the Company shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investor)
confirmation that such registration statement has been declared effective by the
SEC in the form attached hereto as Exhibit A. Thereafter, if requested by the
Buyer at any time, the Company shall require its counsel to deliver to the Buyer
a written confirmation whether or not the effectiveness of such registration
statement has lapsed at any time for any reason (including, without limitation,
the issuance of a stop order) and whether or not the registration statement is
current and available to the Buyer for sale of all of the Registrable
Securities. 

 

 

  

m.       

The Company shall take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of Registrable Securities pursuant to any
registration statement.

4.       

OBLIGATIONS OF THE INVESTOR.

a.       

The Company shall notify the Investor in writing of the information the Company
reasonably requires from the Investor in connection with any registration
statement hereunder. The Investor shall furnish to the Company such information
regarding itself, the Registrable Securities held by it and the intended method
of disposition of the Registrable Securities held by it as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.

b.       

The Investor agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any registration
statement hereunder.

c.       

The Investor agrees that, upon receipt of any notice from the Company of the
happening of any event or existence of facts of the kind described in Section
3(f) or the first sentence of 3(e), the Investor will immediately discontinue
disposition of Registrable Securities pursuant to any registration statement(s)
covering such Registrable Securities until the Investor’s receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3(f) or the
first sentence of 3(e). Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to promptly deliver shares of Common Stock
without any restrictive legend in accordance with the terms of the Purchase
Agreement in connection with any sale of Registrable Securities with respect to
which an Investor has entered into a contract for sale prior to the Investor’s
receipt of a notice from the Company of the happening of any event of the kind
described in Section 3(f) or the first sentence of Section 3(e) and for which
the Investor has not yet settled.

5.       

EXPENSES OF REGISTRATION.

All reasonable expenses, other than sales or brokerage commissions and transfer
taxes, if any, relating to the sale or disposition of Registrable Securities by
the Investor and fees and disbursements of counsel for the Investor, incurred in
connection with registrations, filings or qualifications pursuant to Sections 2
and 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, and fees and disbursements of
counsel for the Company, shall be paid by the Company. 

 

 

  

6.       

INDEMNIFICATION.

a.       

To the fullest extent permitted by law, the Company will, and hereby does,
indemnify, hold harmless and defend the Investor, each Person, if any, who
controls the Investor, the members, the directors, officers, partners,
employees, agents, representatives of the Investor and each Person, if any, who
controls the Investor within the meaning of the Securities Act or the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) (each, an “Investor
Indemnified Person”), against any losses, claims, damages, liabilities,
judgments, fines, penalties, charges, costs, attorneys’ fees, amounts paid in
settlement or expenses, joint or several (“Indemnified Damages”), incurred in
investigating, preparing or defending any action, claim, suit, inquiry,
proceeding, investigation or appeal taken from the foregoing by or before any
court or governmental, administrative or other regulatory agency, body or the
SEC, whether pending or threatened, whether or not an indemnified party is or
may be a party thereto(collectively, “Claims”), to which any of them may become
subject insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement of a material fact in the Registration
Statement, any New Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other “blue sky” laws of any jurisdiction in
which Registrable Securities are offered (“Blue Sky Filing”), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in the final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading or (iii) any violation or alleged violation by the Company
of the Securities Act, the Exchange Act, any other law, including, without
limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to the
Registration Statement or any New Registration Statement or ); or any material
violation by the Company of this Agreement (the matters in the foregoing clauses
(i) through (iv) being, collectively, “Violations”). The Company shall reimburse
each Investor Indemnified Person promptly as such expenses are incurred and are
due and payable, for any reasonable legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 7(a): (i) shall not apply to a Claim by an
Investor Indemnified Person arising out of or based upon a Violation which
occurs in reliance upon and in conformity with information about the Investor
furnished in writing to the Company by such Investor Indemnified Person
expressly for use in connection with the preparation of the Registration
Statement, any New Registration Statement or any such amendment thereof or
supplement thereto, or any final prospectus or amendment or supplement thereto;
(ii) with respect to any superseded prospectus, shall not inure to the benefit
of any such person from whom the person asserting any such Claim purchased the
Registrable Securities that are the subject thereof (or to the benefit of any
person controlling such person) if the untrue statement or omission of material
fact contained in the superseded prospectus was corrected in the revised
prospectus, as then amended or supplemented, if such revised prospectus was
timely made available by the Company pursuant to Section 3(c) or Section 3(e),
and the Investor Indemnified Person was promptly advised in writing not to use
the incorrect prospectus prior to the use giving rise to a violation; (iii)
shall not be available to the extent such Claim is based on a failure of the
Investor to deliver or to cause to be delivered the prospectus made available by
the Company, if such prospectus was timely made available by the Company
pursuant to Section 3(c) or Section 3(e); and (iv) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior
written consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person and shall survive
the transfer of the Registrable Securities by the Investor pursuant to Section
10. 

 

 

  

b.       

To the fullest extent permitted by law, the Investor will, and hereby does,
indemnify, hold harmless and defend the Company, each Person, if any, who
controls the Company, the directors, officers, partners, employees, agents,
representatives of the Company and each Person, if any, who controls the Company
within the meaning of the Securities Act or the Exchange Act (each, a “Company
Indemnified Person” and, together with “Investor Indemnified Person, an
“Indemnified Person”), against any reasonable Indemnified Damages incurred in
investigating, preparing or defending any Claims, to which any of them may
become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon: (i)
any untrue statement or alleged untrue statement of a material fact in the
Registration Statement, any post-effective amendment thereto or in any Blue Sky
Filing, or the omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not misleading, or
(ii) any untrue statement or alleged untrue statement of a material fact
contained in the final prospectus (as amended or supplemented, if the Company
files any amendment thereof or supplement thereto with the SEC) or the omission
or alleged omission to state therein any material fact necessary to make the
statements made therein, in light of the circumstances under which the
statements therein were made, not misleading or (iii) any material violation by
the Investor of this Agreement (the matters in the foregoing clauses (i) through
(iii) being, collectively, “Investor Violations”), provided (A) such Claim
arises out of or is based upon an Investor Violation which occurs in reliance
upon and in conformity with information about the Investor furnished in writing
to the Company by such Investor expressly for use in connection with the
preparation of the Registration Statement, any New Registration Statement or any
such amendment thereof or supplement thereto, or any final prospectus or
amendment or supplement thereto; (B) such Claim with respect to any superseded
prospectus, is made by any such person from whom the person asserting any such
Claim purchased the Registrable Securities that are the subject thereof (or to
the benefit of any person controlling such person) if the untrue statement or
omission of material fact contained in the superseded prospectus was corrected
in the revised prospectus, as then amended or supplemented, if such revised
prospectus was timely made available by the Company pursuant to Section 3(c) or
Section 3(e), and the Investor was promptly advised in writing not to use the
incorrect prospectus prior to the use giving rise to a violation; and (C) such
Claim is based on a failure of the Investor to deliver or to cause to be
delivered the prospectus made available by the Company, if such prospectus was
timely made available by the Company pursuant to Section 3(c) or Section 3(e).
The Investor shall reimburse each Company Indemnified Person within a reasonable
amount of time, for any reasonable legal fees or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.

c.       

Promptly after receipt by an Indemnified Person under this Section 7 of notice
of the commencement of any action or proceeding (including any governmental
action or proceeding) involving a Claim, such Indemnified Person shall, if a
Claim in respect thereof is to be made against any indemnifying party under this
Section 7, deliver to the indemnifying party a written notice of the
commencement thereof, and the indemnifying party shall have the right to
participate in, and, to the extent the indemnifying party so desires, jointly
with any other indemnifying party similarly noticed, to assume control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person; provided, however, that an Indemnified Person shall have
the right to retain its own counsel with the fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel retained by the
indemnifying party, the representation by such counsel of the Indemnified Person
and the indemnifying party would be inappropriate due to actual differing
interests between such Indemnified Person and any other party represented by
such counsel in such proceeding. The Indemnified Person shall cooperate fully
with the indemnifying party in connection with any negotiation or defense of any
such action or claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the Indemnified Party
or Indemnified Person which relates to such action or claim. The indemnifying
party shall keep the Indemnified Person fully apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. No
indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its written consent, provided, however, that the
indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the consent of the Indemnified
Person, consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such claim or litigation. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Person with respect to all third
parties, firms or corporations relating to the matter for which indemnification
has been made. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall not
relieve such indemnifying party of any liability to the Indemnified Person under
this Section 6, except to the extent that the indemnifying party is prejudiced
in its ability to defend such action. 

 

 

  

d.       

The indemnification required by this Section 6 shall be made by periodic
payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or Indemnified Damages are incurred.

e.       

The indemnity agreements contained herein shall be in addition to (i) any cause
of action or similar right of the Indemnified Person against the indemnifying
party or others, and (ii) any liabilities the indemnifying party may be subject
to pursuant to the law.

7.       

CONTRIBUTION.

To the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section
6 to the fullest extent permitted by law; provided, however, that: (i) no seller
of Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any seller of Registrable Securities who was not guilty of
fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by
such seller from the sale of such Registrable Securities.

8.       

REPORTS AND DISCLOSURE UNDER THE SECURITIES ACTS.

With a view to making available to the Investor the benefits of Rule 144
promulgated under the Securities Act or any other similar rule or regulation of
the SEC that may at any time permit the Investor to sell securities of the
Company to the public without registration (“Rule 144”), the Company agrees, at
the Company’s sole expense, to:

a.       

make and keep public information available, as those terms are understood and
defined in Rule 144;

b.       

file with the SEC in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act so long as the Company
remains subject to such requirements and the filing of such reports and other
documents is required for the applicable provisions of Rule 144;

c.       

furnish to the Investor so long as the Investor owns Registrable Securities,
promptly upon request, (i) a written statement by the Company that it has
complied with the reporting and or disclosure provisions of Rule 144, the
Securities Act and the Exchange Act, (ii) a copy of the most recent annual or
quarterly report of the Company and such other reports and documents so filed by
the Company, and (iii) such other information as may be reasonably requested to
permit the Investor to sell such securities pursuant to Rule 144 without
registration; and

d.       

take such additional action as is requested by the Investor to enable the
Investor to sell the Registrable Securities pursuant to Rule 144, including,
without limitation, delivering all such legal opinions, consents, certificates,
resolutions and instructions to the Company’s Transfer Agent as may be requested
from time to time by the Investor and otherwise fully cooperate with Investor
and Investor’s broker to effect such sale of securities pursuant to Rule 144.

The Company agrees that damages may be an inadequate remedy for any breach of
the terms and provisions of this Section 8 and that Investor shall, whether or
not it is pursuing any remedies at law, be entitled to equitable relief in the
form of a preliminary or permanent injunctions, without having to post any bond
or other security, upon any breach or threatened breach of any such terms or
provisions. 

 

 

  

9.       

ASSIGNMENT OF REGISTRATION RIGHTS.

The Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Investor. The Investor may
not assign its rights under this Agreement without the written consent of the
Company.

10.       

AMENDMENT OF REGISTRATION RIGHTS.

No provision of this Agreement may be amended or waived by the parties from and
after the date that is one Business Day immediately preceding the initial filing
of the Registration Statement with the SEC. Subject to the immediately preceding
sentence, no provision of this Agreement may be (i) amended other than by a
written instrument signed by both parties hereto or (ii) waived other than in a
written instrument signed by the party against whom enforcement of such waiver
is sought. Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

11.       

MISCELLANEOUS.

a.       

A Person is deemed to be a holder of Registrable Securities whenever such Person
owns or is deemed to own of record such Registrable Securities. If the Company
receives conflicting instructions, notices or elections from two or more Persons
with respect to the same Registrable Securities, the Company shall act upon the
basis of instructions, notice or election received from the registered owner of
such Registrable Securities.

b.       

All notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be transmitted by email as a PDF, as set forth below or
to such other email address as such party shall have specified most recently by
written notice given in accordance herewith. Any notice or other communication
required or permitted to be given hereunder shall be deemed effective (upon
delivery by email at the email address designated below (if delivered on a
business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received).
The addresses for such communications shall be:

If to the Company:

TWO RIVERS WATER & FARMING COMPANY

E-mail: bgregorak@2riverswater.com and wharding@2riverswater.com

If to the Investor:

SPOTFIN FUNDING LLC

Email: sean@spotfinfunding.com and gavan@spotfinfunding.com

With a copy to (which shall not constitute notice or service of process):

  Legal & Compliance, LLC   330 Clematis Street   Suite 217   West Palm Beach,
FL 33401   Telephone:   561-514-0936   Facsimile: 561-514-0832   E-mail:
CFriend@legalandcompliance.com   Attention:   Chad Friend, Esq., LL.M.

 

Either party hereto may from time to time change its email for notices under
this Section 11 by giving at least ten (10) days’ prior written notice of such
changed address to the other party hereto. 

 

 

  

c.       

The laws of the State of Colorado shall govern all issues concerning this
Agreement. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of Colorado, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of Colorado or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of Colorado. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting
the State of Colorado, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY.

d.       

This Agreement and the Purchase Agreement constitute the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement and the Purchase
Agreement supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.

e.       

Subject to the requirements of Section 9, this Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties hereto.

f.       

The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.

g.       

This Agreement may be executed in identical counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same agreement.
This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile transmission or by e-mail in a “.pdf” format data file of a
copy of this Agreement bearing the signature of the party so delivering this
Agreement.

h.       

Each party shall do and perform, or cause to be done and performed, all such
further acts and things, and shall execute and deliver all such other
agreements, certificates, instruments and documents, as the other party may
reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.

i.       

The language used in this Agreement will be deemed to be the language chosen by
the parties to express their mutual intent and no rules of strict construction
will be applied against any party.

j.       

This Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns, and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person.

* * * * * *

 

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of day and year first above written.

 

  THE COMPANY:       TWO RIVERS WATER & FARMING COMPANY           By:     Name:
Bill Gregorak   Title: Chief Financial Officer           INVESTOR:       SPOTFIN
FUNDING LLC           By:     Name: Sean Wright   Title: Managing Member

 

 

 

 

EXHIBIT A

TO REGISTRATION RIGHTS AGREEMENT

FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT

______, 2017

Broadridge Financial Solutions, Inc.

1717 Arch Street, Suite 1300

Philadelphia, PA 19103

Re: [__________]

Ladies and Gentlemen:

We are counsel to TWO RIVERS WATER & FARMING COMPANY, a Colorado corporation
(the “Company”). In connection with that certain Purchase Agreement, dated as of
September 14, 2017 (the “Purchase Agreement”), entered into by and between the
Company and Spotfin Funding LLC (the “Buyer”), the Company has agreed to issue
to the Buyer shares of the Company’s Common Stock, $0.001 par value (the “Common
Stock”), in an amount up to Five Million Dollars ($5,000,000.00) (the “Put
Shares”), in accordance with the terms of the Purchase Agreement. In connection
with the transactions contemplated by the Purchase Agreement, the Company has
registered with the U.S. Securities & Exchange Commission the following shares
of Common Stock:

(1)       

__________ Put Shares to be issued to the Buyer upon purchase from the Company
by the Buyer from time to time; and

(2)       

__________ shares of Common Stock that were issued as a commitment fee pursuant
to the Purchase Agreement (the “Commitment Shares”).

Pursuant to the Purchase Agreement, the Company also has entered into a
registration rights agreement, of even date with the Purchase Agreement with the
Buyer (the “Registration Rights Agreement”) pursuant to which the Company
agreed, among other things, to register the Put Shares and the Commitment Shares
under the Securities Act of 1933, as amended (the “Securities Act”). In
connection with the Company’s obligations under the Purchase Agreement and the
Registration Rights Agreement, on _______, 2017, the Company filed a
Registration Statement (File No. 333-[________]) (the “Registration Statement”)
with the Securities and Exchange Commission (the “SEC”) relating to the resale
of the Put Shares and the Commitment Shares.

In connection with the foregoing, we advise you that a member of the SEC’s staff
has advised us by telephone that the SEC has entered an order declaring the
Registration Statement effective under the Securities Act at [_______]
[A.M./P.M.] on [____________], 2017 and we have no knowledge, after review of
the list of stop orders included on
https://www.sec.gov/litigation/stoporders.shtml, that any stop order suspending
its effectiveness has been issued or that any proceedings for that purpose are
pending before, or threatened by, the SEC and the Put Shares and the Commitment
Shares are available for resale under the Securities Act pursuant to the
Registration Statement and may be issued without any restrictive legend.

 

  Very truly yours,   [Company Counsel]       By: ____________________

 

cc: Spotfin Funding LLC