Exhibit 10.4

 

REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT this “Agreement”), dated as of MAY ___, 2018
(the “Effective Date”), is entered into by and between ATTIS INDUSTRIES, INC., a
New York corporation (“Company”) and GREENSHIFT CORPORTION, a Delaware
corporation (“GreenShift” or “Holder”).

 

RECITALS

 

A.       In connection with the SPA by and between, inter alia, Company and
GreenShift dated as of the date hereof (the “SPA”), the Company has agreed, upon
the terms and subject to the conditions of the SPA, to issue and sell to Holder
and/or its Permitted Designee(s) the Buyer Securities, consisting of certain
shares of Company’s Common Stock and Series G Stock, including, without
limitation, the Closing Common Shares, the Closing Series G Stock, the Earn-Out
Shares, and the Series G Conversion Shares.

 

B.       To induce GreenShift to consummate the transactions contemplated by the
SPA, 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.

 

AGREEMENT

 

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

 

1. Definitions.

 

Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the SPA. As used in this Agreement, the
following terms shall have the following meanings:

 

(a)       “Business Day” means any day other than Saturday, Sunday or any other
day on which commercial banks in New York, New York are authorized or required
by law to remain closed.

 

(b)       “Holder” has that meaning set forth in the preamble, along with any
transferee or assignee of any Registrable Securities or Series G Stock, as
applicable, to whom a Holder assigns its rights under this Agreement and who
agrees to become bound by the provisions of this Agreement in accordance with
Section 9 and any transferee or assignee thereof to whom a transferee or
assignee of any Registrable Securities, assigns its rights under this Agreement
and who agrees to become bound by the provisions of this Agreement in accordance
with Section 9.

 

(c)       “Closing Date” shall have the meaning set forth in the SPA.

 

(d)       “Company Counsel” means Lucosky Brookman LLP.

 

(e)       “Effective Date” means the date that the applicable Registration
Statement has been declared effective by the SEC.

 

(f)       “Effectiveness Deadline” means with respect to the initial
Registration Statement required to be filed pursuant to Section 2(a), September
1, 2018.

 

(g)       “Filing Deadline” means, with respect to the initial Registration
Statement required to be filed pursuant to Section 2(a), the 10th calendar day
after the first date on which the Company is permitted to file the initial
Registration Statement pursuant to the terms and conditions of the Preferred F
Registration Rights Agreement.

 

(h)       “Full Review” in respect of any Registration Statement shall mean an
instance where the staff of the SEC does not inform the Company either that the
Registration Statement will not be reviewed or that such review will be on a
limited, monitor or expedited (or other similar) basis.

 

(i)        “Person” means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization or a government or any department or agency thereof.

 

(j)       “Preferred F Registration Rights Agreement” means the Registration
Rights Agreement entered into by and among the Company and the investors in the
Company’s Offering of shares of Series F Preferred Stock, entered into on
February 21, 2018.

 

(k)        “register,” “registered,” and “registration” refer to a registration
effected by preparing and filing one or more Registration Statements in
compliance with the Securities Act and pursuant to Rule 415 and the declaration
of effectiveness of such Registration Statement(s) by the SEC.

 

 

 

 

(l)       “Registrable Securities” means (i) the Closing Common Shares, (ii) the
Closing Preferred Shares, and (iii) any capital stock of the Company issued or
issuable with respect to the Series G Stock, including without limitation, (1)
as a result of any stock split, stock dividend, recapitalization, exchange or
similar event or otherwise, and (2) shares of capital stock of the Company into
which the shares of Company’s Common Stock (otherwise referred to herein as
“Common Stock”) are converted or exchanged, without regard to any limitations on
exercise with respect to the Series G Stock; provided, however, that Registrable
Securities shall not include (A) any securities of the Company that have
previously been registered and remain subject to a currently effective
registration statement or which have been sold to the public either pursuant to
a registration statement or Rule 144, or which have been sold in a private
transaction in which the transferor’s rights under this Section 1 are not
assigned, or which may be sold immediately without registration under the
Securities Act and without volume restrictions pursuant to Rule 144, or (B) any
shares of Common Stock underlying shares of Series G Stock that have been
cancelled pursuant to a Redemption.

 

(m)       “Registration Statement” means a registration statement or
registration statements of the Company filed under the Securities Act covering
Registrable Securities.

 

(n)       “Required Holder” means the holders of at least a majority of the
Registrable Securities.

 

(o)       “Required Registration Amount” means the Registrable Securities
required to be registered hereunder.

 

(p)       “Response Deadline” means the date which is ten (10) calendar days
after receipt of a letter of comment or telephonic comments from the SEC.

 

(q)       “Rule 144” means Rule 144 promulgated by the SEC under the Securities
Act, as such rule may be amended from time to time, or any other similar or
successor rule or regulation of the SEC that may at any time permit the
Investors to sell securities of the Company to the public without registration.

 

(r)       “Rule 415” means Rule 415 promulgated by the SEC under the Securities
Act, as such rule may be amended from time to time, or any other similar or
successor rule or regulation of the SEC providing for offering securities on a
continuous or delayed basis.

 

(s)       “SEC” means the United States Securities and Exchange Commission or
any successor thereto.

 

2. Registration.

 

(a)       Mandatory Registration. The Company shall prepare and, as soon as
practicable, but in no event later than the Filing Deadline, file with the SEC
an initial Registration Statement on Form S-3 covering the resale of all of the
Registrable Securities, or the largest amount thereof permissible; provided that
such initial Registration Statement shall register for resale at least the
number of shares of Common Stock equal to the Required Registration Amount as of
the date such Registration Statement is initially filed with the SEC. Such
initial Registration Statement, and each other Registration Statement required
to be filed pursuant to the terms of this Agreement, shall contain (except if
otherwise directed by the Required Holder) the “Selling Stockholders” and “Plan
of Distribution” sections in substantially the form attached hereto as Exhibit
A. The Company shall use its best efforts to have such initial Registration
Statement, and each other Registration Statement required to be filed pursuant
to the terms of this Agreement, declared effective by the SEC as soon as
practicable.

 

(b)       [intentionally omitted]

 

(c)       Sufficient Number of Shares Registered. In the event the number of
shares available under any Registration Statement is insufficient to cover all
of the Registrable Securities required to be covered by such Registration
Statement or an Investor’s allocated portion of the Registrable Securities
pursuant to Section 2(f), the Company shall amend such Registration Statement
(if permissible), or file with the SEC a new Registration Statement (on the
short form available therefor, if applicable), or both, so as to cover at least
the Required Registration Amount as of the Trading Day immediately preceding the
date of the filing of such amendment or new Registration Statement, in each
case, as soon as practicable. The Company shall use its best efforts to cause
such amendment to such Registration Statement and/or such new Registration
Statement (as the case may be) to become effective as soon as practicable
following the filing thereof with the SEC. For purposes of the foregoing
provision, the number of shares available under a Registration Statement shall
be deemed “insufficient to cover all of the Registrable Securities” if at any
time the number of shares of Common Stock available for resale is insufficient.

 

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(d)       Effect of Failure to Obtain Prior to Effectiveness Deadline or
Maintain Effectiveness. If (i) a Registration Statement covering the resale of
all of the Registrable Securities required to be covered thereby (disregarding
any reduction pursuant to Section 2(e)) and required to be filed by the Company
pursuant to this Agreement is not declared effective by the SEC on or before the
Effectiveness Deadline for such Registration Statement (an “Effectiveness
Failure”), (ii) other than during an Allowable Grace Period (as defined below),
on any day after the Effective Date of a Registration Statement, sales of all of
the Registrable Securities required to be included on such Registration
Statement (disregarding any reduction pursuant to Section 2(e)) cannot be made
pursuant to such Registration Statement (including, without limitation, because
of a failure to keep such Registration Statement effective, a failure to
disclose such information as is necessary for sales to be made pursuant to such
Registration Statement, on or after the Closing Date a suspension or delisting
of (or a failure to timely list) the Common Stock on an Eligible Market (as
defined in the SPA), or a failure to register a sufficient number of shares of
Common Stock or by reason of a stop order) or the prospectus contained therein
is not available for use for any reason (a “Maintenance Failure”), or (iii) at
any time when a Registration Statement is not effective for any reason or the
prospectus contained therein is not available for use for any reason, the
Company fails to file with the SEC any required reports under Section 13 or
15(d) of the 1934 Act such that it is not in compliance with Rule 144(c)(1) (or
Rule 144(i)(2), if applicable) (a “Current Public Information Failure”) as a
result of which any of the Holders are unable to sell Registrable Securities
without restriction under Rule 144 (including, without limitation, volume
restrictions), then, as partial relief for the damages to any holder by reason
of any such delay in, or reduction of, its ability to sell the underlying shares
of Common Stock (which remedy shall not be exclusive of any other remedies
available at law or in equity), the Company shall pay penalties as follows: (1)
in the event of an Effectiveness Failure, by no later than the first day of the
month immediately following the date of the Effectiveness Failure, and on the
first day of each month thereafter for so long that the Effectiveness Failure is
continuing, each Holder will return to the Company for cancellation such
Holder’s pro rata portion (based on Holder’s percentage ownership of the
Registrable Securities relative to the total number of Registrable Securities)
of 1,000 shares of Series G Stock, and within five (5) Business Days of such
cancellation, the Company shall deliver to each Holder $100 in cash for each
share of Series G Stock cancelled (the “Redemption”), (2) in the event of a
Maintenance Failure or Current Public Information Failure, to each holder of
Registrable Securities relating to such Registration Statement an amount in cash
equal to one half of one percent (0.5%) of such Holder’s Purchase Price on the
Closing Date (1) on the date of such Maintenance Failure or Current Public
Information Failure, as applicable, and (2) on every thirty (30) day anniversary
or portion thereof of (I)) a Maintenance Failure until such Maintenance Failure
is cured; and (II) a Current Public Information Failure until the earlier of (i)
the date such Current Public Information Failure is cured and (ii) such time
that such public information is no longer required pursuant to Rule 144 (in each
case, pro rated for periods totaling less than thirty (30) days). The payments
to which a holder of Registrable Securities shall be entitled pursuant to this
Section 2(d) are referred to herein as “Registration Delay Payments.” Following
the initial Registration Delay Payment for any particular event or failure
(which shall be paid on the date of such event or failure, as set forth above),
without limiting the foregoing, if an event or failure giving rise to the
Registration Delay Payments is cured prior to any thirty (30) day anniversary of
such event or failure, then such Registration Delay Payment shall be made on the
third (3rd) Business Day after such cure. Notwithstanding the foregoing, no
Registration Delay Payments shall be owed to an Holder (other than with respect
to a Maintenance Failure resulting from a suspension of listing or quotation or
delisting of (or a failure to timely list or quote) the Common Stock on the
Principal Market) with respect to any period during which all of such Holder’s
Registrable Securities may be sold by such Holder without restriction under Rule
144 (including, without limitation, volume restrictions) and without the need
for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if
applicable). Notwithstanding the foregoing, the Company shall not be obligated
to pay any such liquidated damages pursuant to this Section 2(d) if the Company
is unable to fulfill its registration obligations as a result of rules,
regulations, positions or releases issued or actions taken by the Commission
pursuant to its authority with respect to Rule 415, and the Company registers at
such time the maximum number of shares of Common Stock permissible upon
consultation with the staff of the SEC (the “Staff”) or as contemplated pursuant
to Section 2(e) below. Penalties shall cease to accrue at such time as the
Registrable Securities may be sold under Rule 144 and the Company uses
commercially reasonable efforts to provide appropriate legal opinions.

 

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(e)       Offering. Notwithstanding anything to the contrary contained in this
Agreement, in the event 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 by, or on behalf of, the Company, or in
any other manner, such that the Staff or the SEC do not permit such Registration
Statement to become effective and used for resales in a manner that does not
constitute such an offering and that permits the continuous resale at the market
by the Holders participating therein (or as otherwise may be acceptable to each
Holder) without being named therein as an “underwriter,” then the Company shall
reduce the number of shares to be included in such Registration Statement by all
Holders until such time as the Staff and the SEC shall so permit such
Registration Statement to become effective as aforesaid. In making such
reduction, the Company shall reduce the number of shares to be included by all
Holders on a pro rata basis (based upon the number of Registrable Securities
otherwise required to be included for each Holder) unless the inclusion of
shares by a particular Holder or a particular set of Holders are resulting in
the Staff or the SEC’s “by or on behalf of the Company” offering position, in
which event the shares held by such Holder or set of Holders shall be the only
shares subject to reduction (and if by a set of Holders on a pro rata basis by
such Holder or on such other basis as would result in the exclusion of the least
number of shares by all such Holders).  In addition, in the event that the Staff
or the SEC requires any Holder seeking to sell securities under a Registration
Statement filed pursuant to this Agreement to be specifically identified as
an “underwriter” in order to permit such Registration Statement to become
effective, and such Holder does not consent to being so named as an underwriter
in such Registration Statement, then, in each such case, the Company shall
reduce the total number of Registrable Securities to be registered on behalf
of such Holder, until such time as the Staff or the SEC does not require such
identification or until such Holder accepts such identification and the manner
thereof. Any reduction pursuant to this paragraph will first reduce all
securities that are not Registrable Securities (including securities included in
such Registration Statement pursuant to a Permitted Registration (as defined in
the SPA)), if any such securities are permitted by the Required Holder to be
included in accordance with the terms of this Agreement. In the event of
any reduction in Registrable Securities pursuant to this paragraph, an affected
Holder shall have the right to require, upon delivery of a written request to
the Company signed by such Holder, the Company to file a registration statement
within thirty (30) calendar days of such request (subject to any restrictions
imposed by Rule 415 or required by the Staff or the SEC) for resale by such
Holder in a manner acceptable to such Holder, and the Company shall following
such request cause to be and keep effective such registration statement in the
same manner as otherwise contemplated in this Agreement for registration
statements hereunder, in each case, until such time as: (i) all Registrable
Securities held by such Holder have been registered and sold pursuant to an
effective Registration Statement in a manner acceptable to such Holder or (ii)
all Registrable Securities may be resold by such Holder without restriction
(including, without limitation, volume limitations) pursuant to Rule 144 (taking
account of any Staff position with respect to “affiliate” status) and without
the need for current public information required by Rule 144(c)(1) (or Rule
144(i)(2), if applicable) or (iii) such Holder agrees to be named as an
underwriter in any such Registration Statement in a manner acceptable to such
Holder as to all Registrable Securities held by such Holder and that have not
theretofore been included in a Registration Statement under this Agreement (it
being understood that the special demand right under this sentence may be
exercised by an Holder multiple times and with respect to limited amounts of
Registrable Securities in order to permit the resale thereof by such Holder as
contemplated above). Any reduction made to securities included in a Registration
Statement in accordance with this Section 2(e) shall not constitute an
Effectiveness Failure or a Maintenance Failure and shall not be subject to the
payment requirements under Section 2(d).

 

(f)       Allocation of Registrable Securities. The initial number of
Registrable Securities included in any Registration Statement and any increase
in the number of Registrable Securities included therein shall be allocated pro
rata among the Holders based on the number of Registrable Securities held by
each Holder at the time such Registration Statement covering such initial number
of Registrable Securities or increase thereof is declared effective by the SEC.
In the event that any Holder sells or otherwise transfers any of such Holder’s
Registrable Securities, each transferee or assignee (as the case may be) that
becomes an Holder shall be allocated a pro rata portion of the then-remaining
number of Registrable Securities included in such Registration Statement for
such transferor or assignee (as the case may be). Any shares of Common Stock
included in a Registration Statement and which remain allocated to any Person
which ceases to hold any Registrable Securities covered by such Registration
Statement shall be allocated to the remaining Holders, pro rata based on the
number of Registrable Securities then held by such Holder which are covered by
such Registration Statement.

 

(g)       Inclusion of Other Securities. Other than as set forth in this
Agreement or in the SPA, in no event shall the Company include any securities
other than Registrable Securities on any Registration Statement without the
prior written consent of the Required Holder. Until the Expiration Date (as
defined in the SPA), the Company shall not enter into any agreement providing
any registration rights to any of its security holders that have any priority to
any of Holder’s rights contained in this Agreement or adversely affect any
Holder’s rights under this Agreement.

 

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3. Related Obligations.

 

The Company shall use its 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 a Registration
Statement with respect to all the Registrable Securities (but in no event later
than the applicable Filing Deadline) and use its best efforts to cause such
Registration Statement to become effective as soon as practicable after such
filing (but in no event later than the Effectiveness Deadline). Subject to
Allowable Grace Periods, the Company shall keep each Registration Statement
effective (and the prospectus contained therein available for use) pursuant to
Rule 415 for resales by the Holder on a delayed or continuous basis at
then-prevailing market prices (and not fixed prices) at all times until the
earlier of (i) the date as of which all of the Holders may sell all of the
Registrable Securities required to be covered by such Registration Statement
(disregarding any reduction pursuant to Section 2(e)) without restriction
pursuant to Rule 144 (including, without limitation, volume restrictions) and
without the need for current public information required by Rule 144(c)(1) (or
Rule 144(i)(2), if applicable) or (ii) the date on which the Holders shall have
sold all of the Registrable Securities covered by such Registration Statement
(the “Registration Period”). Notwithstanding anything to the contrary contained
in this Agreement, the Company shall ensure that, when filed and at all times
while effective, each Registration Statement (including, without limitation, all
amendments and supplements thereto) and the prospectus (including, without
limitation, all amendments and supplements thereto) used in connection with such
Registration Statement (1) 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 the case of prospectuses, in the
light of the circumstances in which they were made) not misleading and (2) will
disclose (whether directly or through incorporation by reference to other SEC
filings to the extent permitted) all material information regarding the Company
and its securities.

 

(b)       Subject to Section 3(o) of this Agreement, the Company shall prepare
and file with the SEC such amendments (including, without limitation,
post-effective amendments) and supplements to each Registration Statement and
the prospectus used in connection with each such Registration Statement, which
prospectus is to be filed pursuant to Rule 424 promulgated under the Securities
Act, as may be necessary to keep each such Registration Statement effective at
all times during the Registration Period for such Registration Statement, and,
during such period, comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities of the Company required
to be covered by such 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; provided, however, by 9:30 a.m. (New York time) no
later than the second Business Day immediately following each Effective Date,
the Company shall file with the SEC in accordance with Rule 424(b) under the
Securities Act the final prospectus to be used in connection with sales pursuant
to the applicable Registration Statement (whether or not such a prospectus is
technically required by such rule). In the case of amendments and supplements to
any Registration Statement which are required to be filed pursuant to this
Agreement (including, without limitation, pursuant to this Section 3(b)) by
reason of the Company filing a report on Form 10-K, Form 10-Q, Form 8-K or any
analogous report under the Securities Exchange Act of 1934, as amended (the
“1934 Act”), the Company shall have incorporated such report by reference into
such Registration Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the 1934 Act report is filed
which created the requirement for the Company to amend or supplement such
Registration Statement.

 

(c)       The Company shall (A) permit the Required Holder to review and provide
comments to the Company and Company Counsel, with respect to (i) each
Registration Statement at least two (2) Business Days prior to its filing with
the SEC and (ii) all amendments and supplements to each Registration Statement
(including, without limitation, the prospectus contained therein) (except for
Reports on Form 10-K, Form 10-Q, Form 8-K, and any similar or successor reports)
within a reasonable number of days prior to their filing with the SEC, and (B)
not file any Registration Statement or amendment or supplement thereto in a form
to which the Required Holder reasonably objects.

 

(d)       The Company shall promptly furnish to each Holder whose Registrable
Securities are included in any Registration Statement, without charge, (i) after
the same is prepared and filed with the SEC, at least one (1) copy of each
Registration Statement and any amendment(s) and supplement(s) thereto,
including, without limitation, financial statements and schedules, all documents
incorporated therein by reference, if requested by an Holder, all exhibits and
each preliminary prospectus (unless such Registration Statement is available on
EDGAR), (ii) upon the effectiveness of each Registration Statement, ten (10)
copies of the prospectus included in such Registration Statement and all
amendments and supplements thereto (unless such Registration Statement is
available on EDGAR) and (iii) such other documents, including, without
limitation, copies of any preliminary or final prospectus, as such Holder may
reasonably request from time to time (unless such document is available on
EDGAR) in order to facilitate the disposition of the Registrable Securities
owned by such Holder.

 

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(e)       The Company shall use its reasonable best efforts to (i) register and
qualify, unless an exemption from registration and qualification applies, the
resale by Holder of the Registrable Securities covered by a Registration
Statement under such other securities or “blue sky” laws of all applicable
jurisdictions in the United States, (ii) prepare and file in those
jurisdictions, such amendments (including, without limitation, 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, 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(e), (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 each Holder
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.

 

(f)       The Company shall either notify each Holder in writing or file a
current Report on Form 8-K with the SEC providing disclosure of the happening of
any event, as promptly as practicable after becoming aware of such event, as a
result of which the prospectus included in a Registration Statement, as then in
effect, includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (provided that in no event shall such notice contain any material,
non-public information regarding the Company or any of its Subsidiaries), and,
subject to Section 3(o), promptly prepare a supplement or amendment to such
Registration Statement and such prospectus contained therein to correct such
untrue statement or omission and deliver ten (10) copies of such supplement or
amendment to each Holder (or such other number of copies as such Holder may
reasonably request) (unless such supplements or amendments are available on
EDGAR). The Company shall also promptly notify each Holder in writing (i) when a
prospectus or any prospectus supplement or post-effective amendment has been
filed, when a Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to each Holder
by facsimile or e-mail on the same day of such effectiveness and by overnight
mail), and when the Company receives written notice from the SEC that a
Registration Statement or any post-effective amendment will be reviewed by the
SEC, (ii) of any request by the SEC for amendments or supplements to a
Registration Statement or related prospectus or related information, (iii) of
the Company’s reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate; and (iv) of the receipt of any
request by the SEC or any other federal or state governmental authority for any
additional information relating to the Registration Statement or any amendment
or supplement thereto or any related prospectus. The Company shall respond as
promptly as practicable to any comments received from the SEC with respect to
each Registration Statement or any amendment thereto (it being understood and
agreed that the Company’s response to any such comments shall be delivered to
the SEC no later than ten (10) Business Days after the receipt thereof).

 

(g)       The Company shall (i) use its reasonable best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of each
Registration Statement or the use of any prospectus contained therein, or the
suspension of the qualification, or the loss of an exemption from qualification,
of any of the 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 possible moment and (ii) notify each Holder who holds
Registrable Securities 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.

 

(h)       [RESERVED]

 

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(i)       If any Holder may be required under applicable securities law to be
described in any Registration Statement as an underwriter and such Holder
consents to so being named an underwriter, upon the written request of such
Holder, the Company shall make available for inspection by (i) such Holder, (ii)
legal counsel for such Holder and (iii) one (1) firm of accountants or other
agents retained by such Holder (collectively, the “Inspectors”), all pertinent
financial and other records, and pertinent corporate documents and properties of
the Company (collectively, the “Records”), as shall be reasonably deemed
necessary by each Inspector, and cause the Company’s officers, directors and
employees to supply all information which any Inspector may reasonably request;
provided, however, each Inspector shall agree in writing to hold in strict
confidence and not to make any disclosure (except to such Holder) or use of any
Record or other information which the Company’s board of directors determines in
good faith to be confidential, and of which determination the Inspectors are so
notified, unless (1) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement or is otherwise
required under the Securities Act, (2) the release of such Records is ordered
pursuant to a final, non-appealable subpoena or order from a court or government
body of competent jurisdiction, or (3) the information in such Records has been
made generally available to the public other than by disclosure in violation of
this Agreement or any other Transaction Document (as defined in the SPA). Such
Holder agrees that it shall, upon learning that disclosure of such Records is
sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt notice to the Company and allow the Company, at
its expense, to undertake appropriate action to prevent disclosure of, or to
obtain a protective order for, the Records deemed confidential. Nothing herein
(or in any other confidentiality agreement between the Company and such Holder,
if any) shall be deemed to limit any Holder’s ability to sell Registrable
Securities in a manner which is otherwise consistent with applicable laws and
regulations.

 

(j)       The Company shall hold in confidence and not make any disclosure of
information concerning an Holder provided to the Company unless (i) disclosure
of such information is necessary to comply with federal or state securities
laws, (ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement or is otherwise required
to be disclosed in such Registration Statement pursuant to the Securities Act,
(iii) the release of such information is ordered pursuant to a subpoena or other
final, non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
Transaction Document. The Company agrees that it shall, upon learning that
disclosure of such information concerning an Holder is sought in or by a court
or governmental body of competent jurisdiction or through other means, give
prompt written notice to such Holder and allow such Holder, at such Holder’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.

 

(k)       Without limiting any obligation of the Company under the SPA, on and
after the Closing Date, the Company shall use its best efforts either to (i)
cause all of the Registrable Securities covered by each Registration Statement
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, (ii)
secure designation and quotation of all of the Registrable Securities covered by
each Registration Statement on the OTC Bulletin Board, or (iii) if, despite the
Company’s best efforts to satisfy the preceding clauses (i) or (ii) the Company
is unsuccessful in satisfying the preceding clauses (i) or (ii), without
limiting the generality of the foregoing, to use its best efforts to arrange for
at least two market makers to register with the Financial Industry Regulatory
Authority, Inc. (“FINRA”) as such with respect to such Registrable Securities.
In addition, the Company shall cooperate with each Holder and any broker or
dealer through which any such Holder proposes to sell its Registrable Securities
in effecting a filing with FINRA pursuant to FINRA Rule 5110 as requested by
such Holder. The Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section 3(k).

 

(l)       To the extent that any registration statement filed pursuant to this
Agreement has been declared effective by the SEC or restricted legends have been
removed pursuant to Section 5 of the SPA, then the Company shall cooperate with
the Holder who hold Registrable Securities being offered and, to the extent
applicable, facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such certificates to be
in such denominations or amounts (as the case may be) as the Holder may
reasonably request from time to time and registered in such names as the Holder
may request, or, if requested by an Holder and the Common Stock is traded
through the facilities of the DTC (as defined below), credit such aggregate
number of Registrable Securities to be offered by such Holder to such Holder’s
or its designee’s balance account with The Depository Trust Company (“DTC”)
through its Deposit/Withdrawal at Custodian system.

 

(m)       If reasonably requested by an Holder, the Company shall as soon as
practicable after receipt of notice from such Holder and subject to Section 3(o)
hereof, (i) incorporate in a prospectus supplement or post-effective amendment
such information as an Holder reasonably requests to be included therein, but
only as to which information the Company Counsel agrees (which agreement shall
not be unreasonably withheld), relating to the sale and distribution of
Registrable Securities, including, without limitation, information with respect
to the number of Registrable Securities being offered or sold, the purchase
price being paid therefor and any other terms of the offering of the Registrable
Securities to be sold in such offering; (ii) make all required filings of such
prospectus supplement or post-effective amendment after being notified of the
matters to be incorporated in such prospectus supplement or post-effective
amendment; and (iii) supplement or make amendments to any Registration Statement
or prospectus contained therein if reasonably requested by an Holder holding any
Registrable Securities.

 

 7 

 

 

(n)       The Company shall otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any registration
hereunder.

 

(o)       Notwithstanding anything to the contrary herein (but subject to the
last sentence of this Section 3(o)), at any time after the Effective Date of a
particular Registration Statement, the Company may delay the disclosure of
material, non-public information concerning the Company or any of its
Subsidiaries the disclosure of which at the time is not, in the good faith
opinion of the board of directors of the Company, in the best interest of the
Company and, in the opinion of Company Counsel, otherwise required (a “Grace
Period”), provided that the Company shall promptly notify the Holder in writing
of the (i) existence of material, non-public information giving rise to a Grace
Period (provided that in each such notice the Company shall not disclose the
content of such material, non-public information to any of the Holder) and the
date on which such Grace Period will begin and (ii) date on which such Grace
Period ends, provided further that (I) no Grace Period shall exceed twenty (20)
consecutive days and during any three hundred sixty five (365) day period all
such Grace Periods shall not exceed an aggregate of forty-five (45) days, (II)
the first day of any Grace Period must be at least five (5) Trading Days after
the last day of any prior Grace Period and (III) no Grace Period may exist
during the thirty (30) Trading Day period immediately following the Effective
Date of such Registration Statement (provided that such thirty (30) Trading Day
period shall be extended by the number of Trading Days during such period and
any extension thereof contemplated by this proviso during which such
Registration Statement is not effective or the prospectus contained therein is
not available for use) (each, an “Allowable Grace Period”). For purposes of
determining the length of a Grace Period above, such Grace Period shall begin on
and include the date the Holder receive the notice referred to in clause (i)
above and shall end on and include the later of the date the Holder receive the
notice referred to in clause (ii) above and the date referred to in such notice.
The provisions of the first sentence of Section 3(f) and the provisions of
Section 3(g) hereof shall not be applicable during the period of any Allowable
Grace Period. Upon expiration of each Grace Period, the Company shall again be
bound by the first sentence of Section 3(f) and the provisions of Section 3(g)
with respect to the information giving rise thereto unless such material,
non-public information is no longer applicable. Notwithstanding anything to the
contrary contained in this Section 3(o), the Company shall cause its transfer
agent to deliver unlegended shares of Common Stock to a transferee of an Holder
in accordance with the terms of the SPA in connection with any sale of
Registrable Securities with respect to which such Holder has entered into a
contract for sale, and delivered a copy of the prospectus included as part of
the particular Registration Statement (unless an exemption from such prospectus
delivery requirement exists), prior to such Holder’s receipt of the notice of a
Grace Period and for which Holder has not yet settled.

 

4. Obligations of the Holder.

 

(a)       At least five (5) Business Days prior to the first anticipated filing
date of each Registration Statement, the Company shall notify each Holder in
writing of the information the Company requires from each such Holder with
respect to such Registration Statement. It shall be a condition precedent to the
obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Holder that
such Holder 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 and
maintain the effectiveness of the registration of such Registrable Securities
and shall execute such documents in connection with such registration as the
Company may reasonably request.

 

(b)       Each Holder, by such Holder’s acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of each Registration
Statement hereunder, unless such Holder has notified the Company in writing of
such Holder’s election to exclude all of such Holder’s Registrable Securities
from such Registration Statement.

 

(c)       Each Holder agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3(g) or the first
sentence of 3(f), such Holder will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until such Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(g) or the first
sentence of Section 3(f) or receipt of notice that no supplement or amendment is
required. Notwithstanding anything to the contrary in this Section 4(c), the
Company shall cause its transfer agent to deliver unlegended shares of Common
Stock to a transferee of an Holder in accordance with the terms of the SPA in
connection with any sale of Registrable Securities with respect to which such
Holder has entered into a contract for sale prior to Holder’s receipt of a
notice from the Company of the happening of any event of the kind described in
Section 3(g) or the first sentence of Section 3(f) and for which such Holder has
not yet settled.

 

 8 

 

 

(d)       Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of Registrable Securities pursuant to a Registration
Statement.

 

5. Expenses of Registration.

 

All reasonable expenses, other than underwriting discounts and commissions,
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, FINRA filing fees (if any),
blue sky fees and fees and disbursements of counsel for the Company shall be
paid by the Company. The Company shall have no obligation to pay the expenses of
any Holder incurred in connection with any registration, filing or qualification
pursuant to Sections 2 and 3 of this Agreement.

 

6. Indemnification.

 

(a)       To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend each Holder and each of its directors,
officers, shareholders, members, partners, employees, agents, advisors,
representatives (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding the lack of such title or any other
title) and each Person, if any, who controls such Holder within the meaning of
the Securities Act or the 1934 Act and each of the directors, officers,
shareholders, members, partners, employees, agents, advisors, representatives
(and any other Persons with a functionally equivalent role of a Person holding
such titles notwithstanding the lack of such title or any other title) of such
controlling Persons (each, an “Indemnified Person”), against any losses,
obligations, claims, damages, liabilities, contingencies, judgments, fines,
penalties, charges, costs (including, without limitation, court costs,
reasonable attorneys’ fees and costs of defense and investigation), amounts paid
in settlement or expenses, joint or several, (collectively, “Claims”) 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 (“Indemnified Damages”), 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 of a material fact in a 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
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) any untrue statement of a material fact
contained in any preliminary prospectus if used prior to the effective date of
such Registration Statement, or 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 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 by the
Company of the Securities Act, the 1934 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 a
Registration Statement (the matters in the foregoing clauses (i) through (iii)
being, collectively, “Violations”). Subject to Section 6(c), the Company shall
reimburse the Indemnified Persons, promptly as such expenses are incurred and
are due and payable, for any 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 6(a): (i) shall not apply to a Claim by an
Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person for such Indemnified Person expressly for use
in connection with the preparation of such Registration Statement or any such
amendment thereof or supplement thereto and (ii) shall not be available to a
particular Holder to the extent such Claim is based on a failure of such Holder
to deliver or to cause to be delivered the prospectus made available by the
Company (to the extent applicable), including, without limitation, a corrected
prospectus, if such prospectus or corrected prospectus was timely made available
by the Company pursuant to Section 3(d) and then only if, and to the extent
that, following the receipt of the corrected prospectus no grounds for such
Claim would have existed; and (iii) 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 or
delayed. 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 any of the Registrable Securities by any of the Holder pursuant
to Section 9.

 

 9 

 

 

(b)       In connection with any Registration Statement in which an Holder is
participating, such Holder agrees to severally and not jointly indemnify, hold
harmless and defend, to the same extent and in the same manner as is set forth
in Section 6(a), the Company, each of its directors, each of its officers who
signs the Registration Statement and each Person, if any, who controls the
Company within the meaning of the Securities Act or the 1934 Act (each, an
“Indemnified Party”), against any Claim or Indemnified Damages to which any of
them may become subject, under the Securities Act, the 1934 Act or otherwise,
insofar as such Claim or Indemnified Damages arise out of or are based upon any
Violation, in each case, to the extent, and only to the extent, that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Holder expressly for use in connection with
such Registration Statement; and, subject to Section 6(c) and the below provisos
in this Section 6(b), such Holder will reimburse an Indemnified Party any legal
or other expenses reasonably incurred by such Indemnified Party in connection
with investigating or defending any such Claim; provided, however, the indemnity
agreement contained in this Section 6(b) and the agreement with respect to
contribution contained in Section 7 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such Holder, which consent shall not be unreasonably withheld or
delayed, provided further that such Holder shall be liable under this Section
6(b) for only that amount of a Claim or Indemnified Damages as does not exceed
the net proceeds to such Holder as a result of the applicable sale of
Registrable Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Indemnified Party and shall survive the transfer of any of the
Registrable Securities by any of the Holder pursuant to Section 9.

 

(c)       Promptly after receipt by an Indemnified Person or Indemnified Party
(as the case may be) under this Section 6 of notice of the commencement of any
action or proceeding (including, without limitation, any governmental action or
proceeding) involving a Claim, such Indemnified Person or Indemnified Party (as
the case may be) shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, 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 or the Indemnified Party (as the
case may be); provided, however, an Indemnified Person or Indemnified Party (as
the case may be) shall have the right to retain its own counsel with the fees
and expenses of such counsel to be paid by the indemnifying party if: (i) the
indemnifying party has agreed in writing to pay such fees and expenses; (ii) the
indemnifying party shall have failed promptly to assume the defense of such
Claim and to employ counsel reasonably satisfactory to such Indemnified Person
or Indemnified Party (as the case may be) in any such Claim; or (iii) the named
parties to any such Claim (including, without limitation, any impleaded parties)
include both such Indemnified Person or Indemnified Party (as the case may be)
and the indemnifying party, and such Indemnified Person or such Indemnified
Party (as the case may be) shall have been advised by counsel that a conflict of
interest is likely to exist if the same counsel were to represent such
Indemnified Person or such Indemnified Party and the indemnifying party (in
which case, if such Indemnified Person or such Indemnified Party (as the case
may be) notifies the indemnifying party in writing that it elects to employ
separate counsel at the expense of the indemnifying party, then the indemnifying
party shall not have the right to assume the defense thereof and such counsel
shall be at the expense of the Indemnifying Party, provided further that in the
case of clause (iii) above the indemnifying party shall not be responsible for
the reasonable fees and expenses of more than one (1) separate legal counsel for
such Indemnified Person or Indemnified Party (as the case may be). The
Indemnified Party or Indemnified Person (as the case may be) shall reasonably
cooperate 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 (as the case may be) which relates to
such action or Claim. The indemnifying party shall keep the Indemnified Party or
Indemnified Person (as the case may be) reasonably 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 prior written consent; provided, however, the
indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person (as the case may be), 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 (as the case may be) of a
release from all liability in respect to such Claim or litigation, and such
settlement shall not include any admission as to fault on the part of the
Indemnified Party. Following indemnification as provided for hereunder, the
indemnifying party shall be subrogated to all rights of the Indemnified Party or
Indemnified Person (as the case may be) 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 or Indemnified
Party (as the case may be) under this Section 6, except to the extent that the
indemnifying party is materially and adversely prejudiced in its ability to
defend such action.

 

 10 

 

 

(d)       No Person involved in the sale of Registrable Securities who is guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) in connection with such sale shall be entitled to
indemnification from any Person involved in such sale of Registrable Securities
who is not guilty of fraudulent misrepresentation.

 

(e)       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.

 

(f)       The indemnity and contribution agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified Party or
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: (i) no contribution
shall be made under circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in Section 6 of this
Agreement, (ii) no Person involved in the sale of Registrable Securities which
Person is guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) in connection with such sale shall be entitled to
contribution from any Person involved in such sale of Registrable Securities who
was not guilty of fraudulent misrepresentation; and (iii) contribution by any
seller of Registrable Securities shall be limited in amount to the amount of net
proceeds received by such seller from the applicable sale of such Registrable
Securities pursuant to such Registration Statement. Notwithstanding the
provisions of this Section 7, no Holder shall be required to contribute, in the
aggregate, any amount in excess of the amount by which the net proceeds actually
received by such Holder from the applicable sale of the Registrable Securities
subject to the Claim exceeds the amount of any damages that such Holder has
otherwise been required to pay, or would otherwise be required to pay under
Section 6(b), by reason of such untrue statement or omission. Notwithstanding
the foregoing, the contribution agreement contained in this Section 7 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 or delayed

 

8. Reports Under the 1934 Act.

 

With a view to making available to the Holder the benefits of Rule 144, on and
after the Closing Date, the Company agrees 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 1934 Act so long as the
Company remains subject to such requirements (it being understood and agreed
that nothing herein shall limit any obligations of the Company under the SPA)
and the filing of such reports and other documents is required for the
applicable provisions of Rule 144; and

 

(c)       furnish to each Holder so long as such Holder owns Registrable
Securities, promptly upon request, (i) a written statement by the Company, if
true, that it has complied with the reporting, submission and posting
requirements of Rule 144 and the 1934 Act, (ii) a copy of the most recent Form
20-F of the Company and such other reports and documents so filed by the Company
with the SEC if such reports are not publicly available via EDGAR, and (iii)
such other information as may be reasonably requested to permit the Holder to
sell such securities pursuant to Rule 144 without registration.

 

 11 

 

 

9. Assignment of Registration Rights.

 

The rights to cause the Company to register Registrable Securities pursuant to
this Section 1 may be transferred or assigned, but only with all related
obligations, by an Holder to a transferee or assignee.

 

10. Amendment of Registration Rights.

 

Provisions of this Agreement may be amended only with the written consent of the
Company and the Required Holder. Any amendment effected in accordance with this
Section 10 shall be binding upon each Holder and the Company, provided that no
such amendment shall be effective to the extent that it (1) applies to less than
all of the holders of the holders of Registrable Securities, (2) imposes any
obligation or liability on any Holder without such Holder’s prior written
consent (which may be granted or withheld in such Holder’s sole discretion) or
(3) applies retroactively. No waiver shall be effective unless it is in writing
and signed by an authorized representative of the waiving party, provided that
the Required Holder (in a writing signed by all of the Required Holder) may
waive any provision of this Agreement, and any waiver of any provision of this
Agreement made in conformity with the provisions of this Section 10 shall be
binding on each Holder, provided that no such waiver shall be effective to the
extent that it (1) applies to less than all the Holders (unless a party gives a
waiver as to itself only) or (2) imposes any obligation or liability on any
Holder without such Holder’s prior written consent (which may be granted or
withheld in such Holder’s sole discretion). No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any
provision of this Agreement unless the same consideration also is offered to all
of the parties to this Agreement.

  

11. Miscellaneous.

 

(a)       Solely for purposes of this Agreement, 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 such record owner of such
Registrable Securities.

 

(b)       Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); (iii) with respect to Section 3(c), by e-mail (provided
confirmation of transmission is electronically generated and kept on file by the
sending party); or (iv) one (1) Business Day after deposit with a nationally
recognized overnight delivery service with next day delivery specified, in each
case, properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

 

If to the Company: Attis Industries, Inc.   12540 Broadwell Avenue   Milton, GA
30004   Attn:  Jeffrey Cosman, CEO     With a copy to (which shall not
constitute notice): Lucosky Brookman LLP   101 Wood Avenue South   Woodbridge,
NJ 08830   Attn:  Joseph Lucosky, Esq.

 

If to a Holder, to its address, facsimile number or e-mail address (as the case
may be) set forth on the Schedule of Holders attached to the SPA, with copies to
such Holder’s representatives as set forth on the Schedule of Holder, or to such
other address, facsimile number and/or e-mail address and/or to the attention of
such other Person as the recipient party has specified by written notice given
to each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine or e-mail transmission containing
the time, date and recipient facsimile number or e-mail address or (C) provided
by a courier or overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.

 

(c)       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.

 

 12 

 

 

(d)       All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws of the
State of New Jersey, without giving effect to any choice of law or conflict of
law provision or rule (whether of the State of New Jersey or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New Jersey. Each party hereby irrevocably submits to the
exclusive jurisdiction and venue of the Superior Court of New Jersey, Bergen
County, 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 TO, 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.

 

(e)       This Agreement, the other Transaction Documents, the schedules and
exhibits attached hereto and thereto and the instruments referenced herein and
therein constitute the entire agreement among the parties hereto and thereto
solely 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, the other Transaction
Documents, the schedules and exhibits attached hereto and thereto and the
instruments referenced herein and therein supersede all prior agreements and
understandings among the parties hereto solely with respect to the subject
matter hereof and thereof; provided, however, nothing contained in this
Agreement or any other Transaction Document shall (or shall be deemed to) (i)
have any effect on any agreements any Holder has entered into with, or any
instrument that any Holder received from, the Company or any of its Subsidiaries
prior to the date hereof with respect to any prior investment made by such
Holder in the Company, (ii) waive, alter, modify or amend in any respect any
obligations of the Company or any of its Subsidiaries or any rights of or
benefits to any Holder or any other Person in any agreement entered into prior
to the date hereof between or among the Company and/or any of its Subsidiaries
and any Holder or any instrument that any Holder received prior to the date
hereof from the Company and/or any of its Subsidiaries and all such agreements
and instruments shall continue in full force and effect or (iii) limit any
obligations of the Company under any of the other Transaction Documents.

 

(f)       Subject to compliance with Section 9 (if applicable), this Agreement
shall inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto. This Agreement is not for the benefit of,
nor may any provision hereof be enforced by, any Person, other than the parties
hereto, their respective permitted successors and assigns and the Persons
referred to in Sections 6 and 7 hereof.

 

(g)       The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof. Unless the context
clearly indicates otherwise, each pronoun herein shall be deemed to include the
masculine, feminine, neuter, singular and plural forms thereof. The terms
“including,” “includes,” “include” and words of like import shall be construed
broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement
instead of just the provision in which they are found.

 

(h)       This Agreement may be executed in two or more identical counterparts,
all of which shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the
other party. In the event that any signature is delivered by facsimile
transmission or by an e-mail which contains a portable document format (.pdf)
file of an executed signature page, such signature page shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such signature page were an
original thereof.

 

(i)       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 any 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.

 

 13 

 

 

(j)       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. Notwithstanding anything to the
contrary set forth in Section 11, terms used in this Agreement but defined in
the other Transaction Documents shall have the meanings ascribed to such terms
on the Closing Date in such other Transaction Documents unless otherwise
consented to in writing by each Holder.

 

(k)       All consents and other determinations required to be made by the
Holder pursuant to this Agreement shall be made, unless otherwise specified in
this Agreement, by the Required Holder.

 

(l)       The obligations of each Holder under this Agreement and the other
Transaction Documents are several and not joint with the obligations of any
other Holder, and no Holder shall be responsible in any way for the performance
of the obligations of any other Holder under this Agreement or any other
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Holder pursuant hereto or thereto, shall be
deemed to constitute the Holder as, and the Company acknowledges that the Holder
do not so constitute, a partnership, an association, a joint venture or any
other kind of group or entity, or create a presumption that the Holder are in
any way acting in concert or as a group or entity with respect to such
obligations or the transactions contemplated by the Transaction Documents or any
matters, and the Company acknowledges that the Holder are not acting in concert
or as a group, and the Company shall not assert any such claim, with respect to
such obligations or the transactions contemplated by this Agreement or any of
the other the Transaction Documents. Each Holder shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Holder to be joined as an additional
party in any proceeding for such purpose. The use of a single agreement with
respect to the obligations of the Company contained herein was solely in the
control of the Company, not the action or decision of any Holder, and was done
solely for the convenience of the Company and not because it was required or
requested to do so by any Holder. It is expressly understood and agreed that
each provision contained in this Agreement and in each other Transaction
Document is between the Company and an Holder, solely, and not between the
Company and the Holders collectively and not between and among Holders.

 

[Signature Pages Follow]

 

 14 

 

 

IN WITNESS WHEREOF, Holder and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 

  COMPANY:         ATTIS INDUSTRIES, INC.         By:  /s/ Jeffrey Cosman    
Name: Jeffrey Cosman     Title: Chief Executive Officer

 

 15 

 

 

IN WITNESS WHEREOF, Holder and the Company have caused their respective
signature page to this Registration Rights Agreement to be duly executed as of
the date first written above.

 

BUYER:

 

Name of Holder: __________________________

 

Signature of Authorized Signatory of Holder: __________________________

 

Name of Authorized Signatory: _________________________

 

Title of Authorized Signatory: __________________________

 

Signature Page to Attis RRA

 

[SIGNATURE PAGES CONTINUE]

 

 16 

 

 

EXHIBIT A

 

SELLING STOCKHOLDERS

 

The shares of Common Stock being offered by the selling stockholders are those
shares issued to the selling stockholders and issuable to the selling
stockholders upon the conversion of shares of Series G Stock. For additional
information regarding the issuance of the shares of Series G Stock, the shares
of Common Stock, see “Private Placement of Series G Stock and Shares” above. We
are registering the shares of Common Stock in order to permit the selling
stockholders to offer the shares for resale from time to time. Except for the
ownership of the shares issued pursuant to the SPA, the selling stockholders
have not had any material relationship with us within the past three years.

 

The table below lists the selling stockholders and other information regarding
the beneficial ownership (as determined under Section 13(d) of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder) of
the shares of Common Stock held by each of the selling stockholders. The second
column lists the number of shares of Common Stock beneficially owned by the
selling stockholders, based on their respective ownership of shares of Series G
Stock and Common Stock, as of ________, 2018, assuming the conversion of the
Series G Stock held by each such selling stockholder on that date, but taking
account of any limitations on exercise set forth therein.

 

The third column lists the shares of Common Stock being offered by this
prospectus by the selling stockholders and does not take into account any
limitations on the conversion of the Series G Stock set forth therein.

 

In accordance with the terms of a registration rights agreement with the holders
of the shares of Series G Stock, this prospectus generally covers the resale of
(i) the shares and (ii) the maximum number of shares of Common Stock issuable
upon the conversion of the Series G Stock determined as if the Series G Stock
were fully converted (without regard to any limitations on exercise contained
therein) as of the trading day immediately preceding the date this registration
statement was initially filed with the SEC. Because the conversion price of the
Series G Stock may be adjusted, the number of shares that will actually be
issued may be more or less than the number of shares being offered by this
prospectus. The fourth column assumes the sale of all of the shares offered by
the selling stockholders pursuant to this prospectus.

 

Under the terms of the Series G Stock, a selling stockholder may not convert the
Series G Stock into shares of Common Stock to the extent (but only to the
extent) such selling stockholder or any of its affiliates would beneficially own
a number of shares of our shares of Common Stock which would exceed 9.99%. The
number of shares in the second column reflects these limitations. The third
column reflects the number of shares, under the terms of the Series G Stock,
that until Shareholder Approval (as defined in the Series G Stock certificate of
designation) is obtained. The selling stockholders may sell all, some or none of
their shares in this offering. See “Plan of Distribution.”

 

Name of Selling Stockholder  Number of shares of Common Stock Beneficially Owned
Prior to Offering  Number of shares of Common Stock Beneficially Owned Prior to
Shareholder Approval  Maximum Number of shares of Common Stock to be Sold
Pursuant to this Prospectus  Number of  shares of Common Stock Beneficially
Owned After Offering              

 

* Table to be completed based on information provided by the Holder and their
assignees.

 

 1 

 

 

PLAN OF DISTRIBUTION

 

We are registering the shares of Common Stock issued to the holders and issuable
upon the conversion of Series G Stock to permit the resale of these shares of
Common Stock by the holders of the shares of the Series G Stock from time to
time after the date of this prospectus. We will not receive any of the proceeds
from the sale by the selling stockholders of the shares of Common Stock. We will
bear all fees and expenses incident to our obligation to register the shares of
Common Stock.

 

The selling stockholders may sell all or a portion of the shares of Common Stock
held by them and offered hereby from time to time directly or through one or
more underwriters, broker-dealers or agents. If the shares of Common Stock are
sold through underwriters or broker-dealers, the selling stockholders will be
responsible for underwriting discounts or commissions or agent’s commissions.
The shares of Common Stock may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of the sale, at varying prices
determined at the time of sale or at negotiated prices. These sales may be
effected in transactions, which may involve crosses or block transactions,
pursuant to one or more of the following methods:

 

●on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale;

 

●in the over-the-counter market;

 

●in transactions otherwise than on these exchanges or systems or in the
over-the-counter market;

 

●through the writing or settlement of options, whether such options are listed
on an options exchange or otherwise;

 

●ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

 

●block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

 

●purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

 

●an exchange distribution in accordance with the rules of the applicable
exchange;

 

●privately negotiated transactions;

 

●short sales made after the date the Registration Statement is declared
effective by the SEC;

 

●broker-dealers may agree with a selling securityholder to sell a specified
number of such shares at a stipulated price per share;

 

●a combination of any such methods of sale; and

 

●any other method permitted pursuant to applicable law.

 

The selling stockholders may also sell shares of Common Stock under Rule 144
promulgated under the Securities Act of 1933, as amended, if available, rather
than under this prospectus. In addition, the selling stockholders may transfer
the shares of Common Stock by other means not described in this prospectus. If
the selling stockholders effect such transactions by selling shares of Common
Stock to or through underwriters, broker-dealers or agents, such underwriters,
broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling stockholders or commissions from
purchasers of the shares of Common Stock for whom they may act as agent or to
whom they may sell as principal (which discounts, concessions or commissions as
to particular underwriters, broker-dealers or agents may be in excess of those
customary in the types of transactions involved). In connection with sales of
the shares of Common Stock or otherwise, the selling stockholders may enter into
hedging transactions with broker-dealers, which may in turn engage in short
sales of the shares of Common Stock in the course of hedging in positions they
assume. The selling stockholders may also sell shares of Common Stock short and
deliver shares of Common Stock covered by this prospectus to close out short
positions and to return borrowed shares in connection with such short sales. The
selling stockholders may also loan or pledge shares of Common Stock to
broker-dealers that in turn may sell such shares.

 

 2 

 

 

The selling stockholders may pledge or grant a security interest in some or all
of the shares of Common Stock owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell the shares of Common Stock from time to time pursuant to this
prospectus or any amendment to this prospectus under Rule 424(b)(3) or other
applicable provision of the Securities Act amending, if necessary, the list of
selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus. The selling stockholders
also may transfer and donate the shares of Common Stock in other circumstances
in which case the transferees, donees, pledgees or other successors in interest
will be the selling beneficial owners for purposes of this prospectus.

 

To the extent required by the Securities Act and the rules and regulations
thereunder, the selling stockholders and any broker-dealer participating in the
distribution of the shares of Common Stock may be deemed to be “underwriters”
within the meaning of the Securities Act, and any commission paid, or any
discounts or concessions allowed to, any such broker-dealer may be deemed to be
underwriting commissions or discounts under the Securities Act. At the time a
particular offering of the shares of Common Stock is made, a prospectus
supplement, if required, will be distributed, which will set forth the aggregate
amount of shares of Common Stock being offered and the terms of the offering,
including the name or names of any broker-dealers or agents, any discounts,
commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or re-allowed
or paid to broker-dealers.

 

Under the securities laws of some states, the shares of Common Stock may be sold
in such states only through registered or licensed brokers or dealers. In
addition, in some states the shares of Common Stock may not be sold unless such
shares have been registered or qualified for sale in such state or an exemption
from registration or qualification is available and is complied with.

 

There can be no assurance that any selling stockholder will sell any or all of
the shares of Common Stock registered pursuant to the registration statement, of
which this prospectus forms a part.

 

The selling stockholders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations thereunder, including, without
limitation, to the extent applicable, Regulation M of the Exchange Act, which
may limit the timing of purchases and sales of any of the shares of Common Stock
by the selling stockholders and any other participating person. To the extent
applicable, Regulation M may also restrict the ability of any person engaged in
the distribution of the shares of Common Stock to engage in market-making
activities with respect to the shares of Common Stock. All of the foregoing may
affect the marketability of the shares of Common Stock and the ability of any
person or entity to engage in market-making activities with respect to the
shares of Common Stock.

 

We will pay all expenses of the registration of the shares of Common Stock
pursuant to the registration rights agreement, estimated to be $[     ] in
total, including, without limitation, Securities and Exchange Commission filing
fees and expenses of compliance with state securities or “blue sky” laws;
provided, however, a selling stockholder will pay all underwriting discounts and
selling commissions, if any. We will indemnify the selling stockholders against
liabilities, including some liabilities under the Securities Act in accordance
with the registration rights agreements or the selling stockholders will be
entitled to contribution. We may be indemnified by the selling stockholders
against civil liabilities, including liabilities under the Securities Act that
may arise from any written information furnished to us by the selling
stockholder specifically for use in this prospectus, in accordance with the
related registration rights agreements, or we may be entitled to contribution.

 

Once sold under the registration statement, of which this prospectus forms a
part, the shares of Common Stock will be freely tradable in the hands of persons
other than our affiliates.

 

 

3