EXHIBIT 10.2

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of April 28, 2020, by
and among GEE Group Inc., an Illinois corporation, with headquarters located at
7751 Belfort Parkway, Suite 150, Jacksonville, FL 32256 (the “Company”), and MGG
Investment Group LP (the “Holder”).

 

WHEREAS:

 

A. In connection with Amendment No. 7 dated as of April 28, 2020 to the
Revolving Credit, Term Loan and Security Agreement by and among the Company, the
other borrowers named therein and the Holder, dated as of March 31, 2017 (the
“Credit Agreement”), the Company has agreed, upon the terms and subject to the
conditions of the Credit Agreement, to issue to the Holder certain shares of the
Company’s common stock (the “Common Stock”) (the shares of Common Stock issuable
pursuant to the terms of the Credit Agreement, collectively, the “Shares”).

 

B. In accordance with the terms of the Credit 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 “1933 Act”), and applicable state securities laws.

 

NOW, THEREFORE, in consideration of the premises 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 Holder hereby
agree as follows:

 

1. Definitions.

 

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

 

(a) “Additional Effective Date” means the date that an Additional Registration
Statement is declared effective by the SEC.

 

(b) “Additional Effectiveness Deadline” means the date which is the earlier of
(i) ninety (90) calendar days after the earlier of the applicable Additional
Filing Date and the applicable Additional Filing Deadline and (ii) the fifth
(5th) Business Day after the date the Company is notified (orally or in writing,
whichever is earlier) by the SEC that the applicable Additional Registration
Statement will not be reviewed or will not be subject to further review;
provided, however, that if such Additional Effectiveness Deadline falls on a
Saturday, Sunday or other day that the SEC is closed for business, such
Additional Effectiveness Deadline shall be extended to the next Business Day on
which the SEC is open for business.

 

(c) “Additional Filing Date” means the date on which an Additional Registration
Statement is filed with the SEC.

 

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(d) “Additional Filing Deadline” means if Cutback Shares are required to be
included in any Additional Registration Statement, the later of (i) the date
sixty (60) days after the date substantially all of the Registrable Securities
registered under the immediately preceding Registration Statement are sold and
(ii) the date six (6) months from the Initial Effective Date or the most recent
Additional Effective Date, as applicable.

 

(e) “Additional Registrable Securities” means, any Shares not previously
included in the Initial Registration Statement or any Additional Registration
Statement.

 

(f) “Additional Registration Statement” means a registration statement or
registration statements of the Company filed under the 1933 Act covering the
resale of any Additional Registrable Securities.

 

(g) “Additional Required Registration Amount” means any Shares not previously
included in the Initial Registration Statement or any Additional Registration
Statement, all subject to adjustment as provided in Section 2(f), without regard
to any limitations on the issuance of Common Stock pursuant to the terms of the
Credit Agreement.

 

(h) “Affiliate” shall have the meaning ascribed to such term in Rule 405 of the
1933 Act.

 

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

 

(j) “Conversion Date” shall mean the date no later than five (5) business days
following the date on which the Company receives requisite shareholder approval
of the Conversion Transactions.

 

(k) “Conversion Transactions” shall mean transactions satisfying the
Conversion/Cancellation Condition, as defined in the Credit Agreement.

 

(l) “Cutback Shares” means any of the Initial Required Registration Amount or
the Additional Required Registration Amount(s) of Registrable Securities not
included in the Initial Registration Statement or all Additional Registration
Statements previously declared effective hereunder as a result of a limitation
on the maximum number of shares of Common Stock of the Company permitted to be
registered by the staff of the SEC pursuant to Rule 415.

 

(m) “effective” and “effectiveness” refer to a Registration Statement that has
been declared effective by the SEC and is available for the resale of the
Registrable Securities required to be covered thereby.

 

(n) “Effective Date” means the Initial Effective Date and/or the Additional
Effective Date(s) , as applicable.

 

(o) “Effectiveness Deadline” means the Initial Effectiveness Deadline, and/or
the Additional Effectiveness Deadline(s), as applicable.

 

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(p) “Eligible Market” means the New York Stock Exchange, the NYSE American, the
NASDAQ Capital Market, the Nasdaq Global Market or the NASDAQ Global Select
Market.

 

(q) “Filing Date” means the Initial Filing Date and/or the Additional Filing
Date(s) as applicable.

 

(r) “Initial Effective Date” means the date that the Initial Registration
Statement is declared effective by the SEC.

 

(s) “Initial Effectiveness Deadline” means the date which is the earlier of (i)
90 days after the Conversion Date and (ii) the fifth Business Day after the date
the Company is notified (orally or in writing, whichever is earlier) by the SEC
that the Initial Registration Statement will not be reviewed or will not be
subject to further review; provided, however, that if the Initial Effectiveness
Deadline falls on a Saturday, Sunday or other day that the SEC is closed for
business, the Initial Effectiveness Deadline shall be extended to the next
Business Day on which the SEC is open for business.

 

(t) “Initial Filing Date” means the date on which the Initial Registration
Statement is filed with the SEC.

 

(u) “Initial Registrable Securities” means any Shares issued or issuable to the
Holder pursuant to the Credit Agreement.

 

(v) “Initial Registration Statement” means a registration statement or
registration statements of the Company filed under the 1933 Act covering the
resale of the Initial Registrable Securities.

 

(w) “Initial Required Registration Amount” means the maximum number of shares
that may be issuable under the Credit Agreement.

 

(x) “Jax Legacy Registration Rights Agreement” means the Registration Rights
Agreement, dated as of October 2, 2015, between the Company and JAX Legacy –
Investment 1, LLC, a Florida limited liability company.

 

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

 

(z) “Principal Market” means the NYSE American.

 

(aa) “register,” “registered,” and “registration” refer to a registration
effected by preparing and filing one or more Registration Statements in
compliance with the 1933 Act and pursuant to Rule 415, and the declaration or
ordering of effectiveness of such Registration Statement(s) by the SEC.

 

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(bb) “Registrable Securities” means the Initial Registrable Securities and/or
the Additional Registrable Securities, as applicable. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when: (a) a Registration Statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall
have been sold, transferred, disposed of or exchanged in accordance with such
Registration Statement; (b) such securities shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent public
distribution of them shall not require registration under the Securities Act;
(c) such securities shall have ceased to be outstanding; or (d) such Registrable
Securities are freely saleable under Rule 144 under the Securities Act without
volume limitations.

 

(cc) “Registration Statement” means the Initial Registration Statement and/or
the Additional Registration Statement(s) as applicable.

 

(dd) “Required Registration Amount” means the Initial Required Registration
Amount and/or the Additional Registration Amount(s), as applicable.

 

(ee) “Rule 415” means Rule 415 promulgated under the 1933 Act or any successor
rule providing for offering securities on a continuous or delayed basis.

 

(ff) “SEC” means the United States Securities and Exchange Commission.

 

(gg) “SNI Merger Agreement” means the Agreement and Plan of Merger dated as of
March 31, 2017, by and among the Company, GEE Group Portfolio Inc., a Delaware
corporation and wholly-owned subsidiary of the Company, SNI Holdco Inc., a
Delaware corporation, Smith Holdings, LLC a Delaware limited liability company,
Thrivent Financial for Lutherans, a Wisconsin corporation, organized as a
fraternal benefits society Madison Capital Funding, LLC, a Delaware limited
liability company and Ronald R. Smith, in his capacity as a stockholder and
Ronald R. Smith in his capacity as the representative of the stockholders of SNI
Holdco.

 

(hh) “Trading Day” means any day on which the Common Stock is traded on the
Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal national securities exchange
or securities market on which the Common Stock is then traded; provided that
“Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00:00 p.m., New York time).

 

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2. Registration.

 

(a) Initial Mandatory Registration. The Company shall prepare and file with the
SEC the Initial Registration Statement on Form S-3 covering the resale of all of
the Initial Registrable Securities. In the event that Form S-3 is unavailable
for such a registration, the Company shall use such other form as is available
for such a registration on another appropriate form reasonably acceptable to the
Holder, subject to the provisions of Section 2(e). The Initial Registration
Statement prepared pursuant hereto shall register for resale at least the number
of shares of Common Stock equal to the Initial Required Registration Amount
determined as of the date the Initial Registration Statement is initially filed
with the SEC, subject to adjustment as provided in Section 2(f). The Initial
Registration Statement shall contain (except if otherwise directed by the Holder
or if not permitted under SEC regulations or not advisable under SEC rules or
guidance) the “Plan of Distribution” and “Selling Shareholder” sections in
substantially the form attached hereto as Exhibit B (it being understood that
the Company may include in such sections any such additional information not
otherwise contained therein that is required to be included in such sections
under SEC regulations). The Company shall use its reasonable best efforts to
have the Initial Registration Statement declared effective by the SEC as soon as
practicable, but in no event later than the Initial Effectiveness Deadline. By
9:30 a.m. New York time on the second (2nd) Business Day following the Initial
Effective Date, the Company shall file with the SEC in accordance with Rule 424
under the 1933 Act the final prospectus to be used in connection with sales
pursuant to the Initial Registration Statement.

 

(b) Additional Mandatory Registrations. The Company shall prepare, and, as soon
as practicable but in no event later than the applicable Additional Filing
Deadline, file with the SEC an Additional Registration Statement on Form S-3
covering the resale of all of the Additional Registrable Securities not
previously registered on an Additional Registration Statement hereunder. To the
extent the staff of the SEC does not permit the applicable Additional Required
Registration Amount to be registered on an Additional Registration Statement,
the Company shall file, by no later than the applicable Additional Filing
Deadline, Additional Registration Statements successively trying to register on
each such Additional Registration Statement the maximum number of remaining
Additional Registrable Securities until the Additional Required Registration
Amount has been registered with the SEC. In the event that Form S-3 is
unavailable for such a registration, the Company shall use such other form as is
available for such a registration on another appropriate form reasonably
acceptable to the Holder, subject to the provisions of Section 2(e). Each
Additional Registration Statement prepared pursuant hereto shall register for
resale at least that number of shares of Common Stock equal to the applicable
Additional Required Registration Amount determined as of the date such
Additional Registration Statement is initially filed with the SEC, subject to
adjustment as provided in Section 2(f). Each Additional Registration Statement
shall contain (except if otherwise directed by the Holder or if not permitted
under SEC regulations or not advisable under SEC rules or guidance) the “Plan of
Distribution” and “Selling Shareholder” sections in substantially the form
attached hereto as Exhibit B (it being understood that the Company may include
in such sections any such additional information not otherwise contained therein
that is required to be included in such sections under SEC regulations). The
Company shall use its reasonable best efforts to have each Additional
Registration Statement declared effective by the SEC as soon as practicable, but
in no event later than the applicable Additional Effectiveness Deadline. By 9:30
a.m. New York time on the second (2nd) Business Day following each Additional
Effective Date, the Company shall file with the SEC in accordance with Rule 424
under the 1933 Act the final prospectus to be used in connection with sales
pursuant to the applicable Additional Registration Statement.

 

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(c) Other Securities. In no event shall the Company include any securities other
than Registrable Securities and securities which may be included pursuant to
existing piggyback registration rights set forth in the SNI Merger Agreement and
in the Jax Legacy Registration Rights Agreement on any Registration Statement
without the prior written consent of the Holder.

 

(d) Legal Counsel. Subject to Section 6 hereof, the Holder shall have the right
to select one legal counsel to review and oversee any registration pursuant to
this Section 2 (“Legal Counsel”), which shall be Schulte Roth & Zabel LLP or
such other counsel as thereafter designated by the Holder. The Company and Legal
Counsel shall reasonably cooperate with each other in performing the Company’s
obligations under this Agreement.

 

(e) Ineligibility for Form S-3. In the event that Form S-3 is not available for
the registration of the resale of Registrable Securities hereunder, the Company
shall (i) register the resale of the Registrable Securities on Form S-1 or
another appropriate form reasonably acceptable to the Holder and (ii) undertake
to register the Registrable Securities on Form S-3 as soon as such form is
available, to the extent of such availability, provided that the Company shall
maintain the effectiveness of the Registration Statement then in effect until
such time as a Registration Statement on Form S-3 covering the Registrable
Securities has been declared effective by the SEC.

 

(f) Sufficient Number of Shares Registered. In the event the number of
securities available under a Registration Statement filed pursuant to Section
2(a) or Section 2(b) is insufficient to cover the Required Registration Amount
of Registrable Securities required to be covered by such Registration Statement,
the Company shall amend or supplement the applicable Registration Statement, or
file 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,
but in any event not later than fifteen (15) days after the necessity therefor
arises. The Company shall use its reasonable best efforts to cause such
amendment and/or new Registration Statement to become effective as soon as
practicable following the filing thereof. For purposes of the foregoing
provision, the number of securities available under a Registration Statement
shall be deemed “insufficient to cover all of the Registrable Securities” if at
any time the number of securities available for resale under such Registration
Statement is less than the Required Registration Amount, as applicable. The
calculation set forth in the foregoing sentence shall be made without regard to
any limitations on the issuance of Common Stock pursuant to the terms of the
Credit Agreement.

 

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(g) Effect of Failure to File and Obtain and Maintain Effectiveness of
Registration Statement. If (i) after the Initial Effectiveness Deadline, the
Initial Registration Statement when declared effective fails to register the
Initial Required Registration Amount of Initial Registrable Securities (a
“Registration Failure”), (ii) a Registration Statement covering the resale of
all of the Registrable Securities required to be covered thereby and required to
be filed by the Company pursuant to this Agreement is (A) not filed with the SEC
on or before the applicable Additional Filing Deadline (a “Filing Failure”) or
(B) not declared effective by the SEC on or before the applicable Effectiveness
Deadline, (an “Effectiveness Failure”), (iii) on any day after the applicable
Effective Date, sales of all of the Registrable Securities required to be
included on such Registration Statement cannot be made (other than during an
Allowable Grace Period (as defined in Section 3(q)) pursuant to such
Registration Statement or otherwise (including, without limitation, because of
the suspension of trading or any other limitation imposed by an Eligible Market,
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, a failure to register a sufficient number of shares of
Common Stock or a failure to maintain the listing of the Common Stock on an
Eligible Market) (a “Maintenance Failure”) or (iv) at any time during the period
commencing from the six (6) month anniversary of the Conversion Date and ending
at such time that all of the Registrable Securities, if a Registration Statement
is not available for the resale of all of the Registrable Securities, may be
sold without restriction or limitation pursuant to Rule 144 and without the
requirement to be in compliance with Rule 144(c)(1), if the Company shall (x)
fail for any reason to satisfy the requirements of Rule 144(c)(1), including,
without limitation, the failure to satisfy the current public information
requirement under Rule 144(c) or (y) if the Company has ever been an issuer
described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the
Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a
“Public Information Failure”) then, as partial relief for the damages to the
Holder by reason of any such delay in or reduction of its ability to sell the
Shares (which remedy shall be the sole monetary remedy but shall not be
exclusive of any other remedies available at law or in equity, including,
without limitation, specific performance or the additional obligation of the
Company to register any Cutback Shares), the Company shall pay to the Holder an
amount in cash equal to two percent (2.0%) of the product of (x) the weighted
average price of the Common Stock on the applicable Registration Delay Payment
Date and (y) the number of Shares issued or issuable as of the applicable
Registration Delay Payment Date without giving effect to any limitation set
forth in the Credit Agreement, on each of the following dates (each such date, a
“Registration Delay Payment Date”): (i) on the three-month anniversary after the
date of a Registration Failure and every three-month anniversary thereafter
(prorated for periods totaling less than three months) until such Registration
Failure is cured, (ii) on the three-month anniversary after the date of a Filing
Failure and every three-month anniversary thereafter (prorated for periods
totaling less than three months) until such Filing Failure is cured; (iii) on
the three-month anniversary after the date of an Effectiveness Failure and every
three-month anniversary thereafter (prorated for periods totaling less than
three months) until such Effectiveness Failure is cured; (iv) on the three-month
anniversary after the initial date of a Maintenance Failure and every
three-month anniversary thereafter (prorated for periods totaling less than
three months) until such Maintenance Failure is cured and (v) on the three-month
anniversary after the date of a Public Information Failure and every three-month
anniversary thereafter (prorated for periods totaling less than three months)
until such Public Information Failure is cured. The payments to which the Holder
shall be entitled pursuant to this Section 2(g) are referred to herein as
“Registration Delay Payments.” Registration Delay Payments shall be paid on the
earlier of (I) the dates set forth above and (II) the third Business Day after
the event or failure giving rise to the Registration Delay Payments is cured.
Without limiting the remedies available to the Holder, the Company acknowledges
that any failure by the Company to comply with its obligations under this
Section 2 will result in material irreparable injury to the Holder for which
there is no adequate remedy at law, that it would not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Holder may obtain such relief as may be required to specifically enforce the
Company’s obligations under this Section 2.

 

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3. Related Obligations.

 

At such time as the Company is obligated to file a Registration Statement with
the SEC pursuant to Section 2(a), 2(b), 2(e) or 2(f), 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 promptly prepare and file with the SEC a Registration
Statement with respect to the Registrable Securities and use its reasonable best
efforts to cause such Registration Statement relating to the Registrable
Securities to become effective as soon as practicable after such filing (but in
no event later than the Effectiveness Deadline). The Company shall keep each
Registration Statement effective pursuant to Rule 415 at all times until the
earlier of (i) the date as of which the Holder may sell all of the Registrable
Securities covered by such Registration Statement without restriction or
limitation pursuant to Rule 144 and without the requirement to be in compliance
with Rule 144(c)(1) (or any successor thereto) promulgated under the 1933 Act or
(ii) the date on which the Holder shall have sold all of the Registrable
Securities covered by such Registration Statement (the “Registration Period”).
The Company shall ensure that each 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
the case of prospectuses, in the light of the circumstances in which they were
made) not misleading. The term “reasonable best efforts” shall mean, among other
things, that the Company shall submit to the SEC, within two (2) Business Days
after the later of the date that (i) the Company learns that no review of a
particular Registration Statement will be made by the staff of the SEC or that
the staff has no further comments on a particular Registration Statement, as the
case may be, and (ii) the approval of Legal Counsel pursuant to Section 3(c)
(which approval is immediately sought), a request for acceleration of
effectiveness of such Registration Statement to a time and date not later than
two (2) Business Days after the submission of such request. The Company shall
respond in writing to comments made by the SEC in respect of a Registration
Statement as soon as practicable, but in no event later than fifteen (15) days
after the receipt of comments by or notice from the SEC that an amendment is
required in order for a Registration Statement to be declared effective.

 

(b) The Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to a 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 1933 Act, as may be
necessary to keep such Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities of the
Company 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. In the case of amendments and supplements to a
Registration Statement which are required to be filed pursuant to this Agreement
(including 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
incorporate 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.

 

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(c) The Company shall (A) permit Legal Counsel to review and comment upon (i) a
Registration Statement at least five (5) Business Days prior to its initial
filing with the SEC and (ii) all amendments and supplements to all Registration
Statements (except for Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q, Current Reports on 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
Legal Counsel reasonably objects in writing. The Company shall not submit a
request for acceleration of the effectiveness of a Registration Statement or any
amendment or supplement thereto without the prior approval of Legal Counsel,
which consent shall not be unreasonably withheld, conditioned or delayed. The
Company shall furnish to Legal Counsel, without charge, (i) copies of any
correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to any Registration Statement, (ii) promptly after the
same is prepared and filed with the SEC, one copy of any Registration Statement
and any amendment(s) thereto, including financial statements and schedules, all
documents incorporated therein by reference (to the extent not previously
provided), if requested by the Holder, and all exhibits and (iii) upon the
effectiveness of any Registration Statement, one copy of the prospectus included
in such Registration Statement and all amendments and supplements thereto, in
each case, which copies may be provided in electronic form. The Company and
Legal Counsel shall reasonably cooperate in performing their respective
obligations pursuant to this Section 3.

 

(d) The Company shall furnish to the Holder, without charge, (i) promptly after
the same is prepared and filed with the SEC, at least one copy of each
Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference (to
the extent not previously provided), if requested by the Holder, all exhibits
and each preliminary prospectus, (ii) upon the effectiveness of any Registration
Statement, a reasonable number of copies of the prospectus included in such
Registration Statement and all amendments and supplements thereto (or such other
number of copies as the Holder may reasonably request) and (iii) such other
documents, including copies of any preliminary or final prospectus, as the
Holder may reasonably request from time to time in order to facilitate the
disposition of the Registrable Securities, in each case which copies may be
provided in electronic form.

 

(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 the 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 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(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 Legal Counsel and the Holder 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.

 

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(f) The Company shall notify Legal Counsel and the Holder in writing of the
happening of any event, as promptly as practicable after becoming aware of such
event, but in any event within one (1) Trading Day of 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, nonpublic information), and, subject to Section 3(q), promptly prepare
a supplement or amendment to such Registration Statement to correct such untrue
statement or omission, and deliver a reasonable number of copies of such
supplement or amendment to Legal Counsel and the Holder (or such other number of
copies as Legal Counsel or the Holder may reasonably request). The Company shall
also promptly as is practicable notify Legal Counsel and the Holder 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 Legal Counsel and the Holder by facsimile or email on the same day
of such effectiveness and by overnight mail), (ii) of any request by the SEC for
amendments or supplements to a 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. By
9:30 a.m. New York City time on the date following the second (2nd) Trading Day
any post-effective amendment has become effective, the Company shall file with
the SEC in accordance with Rule 424 under the 1933 Act the final prospectus to
be used in connection with sales pursuant to such Registration Statement.

 

(g) The Company shall use its reasonable best efforts to prevent the issuance of
any stop order or other suspension of effectiveness of a Registration Statement,
or the suspension of the 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 to notify Legal Counsel and the Holder 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) If the Holder is required under applicable securities laws to be described
in the Registration Statement as an underwriter or the Holder believes, after
consultation with its legal counsel, that it would reasonably be deemed to be an
underwriter of Registrable Securities, at the reasonable request of the Holder,
the Company shall furnish to the Holder, on the date of the effectiveness of the
Registration Statement and thereafter from time to time on such dates as the
Holder may reasonably request (i) a letter, dated such date, from the Company’s
independent certified public accountants in form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering, addressed to the Holder, and (ii) an opinion,
dated as of such date, of counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given in
an underwritten public offering, addressed to the Holder.

 

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(i) If the Holder is required under applicable securities laws to be described
in the Registration Statement as an underwriter or the Holder believes, after
consultation with its legal counsel, that it would reasonably be deemed to be an
underwriter of Registrable Securities, the Company shall make available for
inspection by (i) the Holder, (ii) Legal Counsel and (iii) one firm of
accountants or other agents retained by the 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, that each Inspector shall
agree to hold in strict confidence and shall not make any disclosure (except to
the Holder) or use of any Record or other information which the Company
determines in good faith to be confidential, and of which determination the
Inspectors are so notified, unless (a) 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 1933 Act, (b) 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 (c) the information in
such Records has been made generally available to the public other than by
disclosure in violation of this Agreement. The 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 the Holder) shall be deemed to
limit the 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 the 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, (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
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning the Holder is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to the Holder and allow the Holder, at the Holder’s expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.

 

  11

 

 

(k) The Company shall use its reasonable best efforts either to cause all of the
Registrable Securities consisting of shares of Common Stock covered by a
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 or if, despite the Company’s reasonable best efforts, the
Company is unsuccessful in satisfying the preceding obligation, to secure the
inclusion for quotation on another Eligible Market for such Registrable
Securities. The Company shall pay all fees and expenses in connection with
satisfying its obligation under this Section 3(k).

 

(l) The Company shall cooperate with the Holder 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 and registered in such names as the Holder may request.

 

(m) If requested by the Holder, the Company shall as soon as practicable but
subject to the timing requirements set out elsewhere in this Agreement with
regard to the filing of any prospectus supplement or post-effective amendment,
as applicable (i) incorporate in a prospectus supplement or post-effective
amendment such information as the Holder reasonably requests to 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 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 if reasonably
requested by the Holder.

 

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

 

(o) Within two (2) Business Days after a Registration Statement which covers
Registrable Securities is declared 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 Holder)
confirmation that such Registration Statement has been declared effective by the
SEC in the form attached hereto as Exhibit A.

 

  12

 

 

(p) Notwithstanding anything to the contrary herein, at any time after the
Effective Date, the Company may delay the disclosure of material, non-public
information concerning the Company the disclosure of which at the time is not,
in the good faith opinion of the Board of Directors of the Company after
consultation with its counsel, in the best interest of the Company and would be
required to be disclosed in any Registration Statement so that such Registration
Statement would not be materially misleading (a “Grace Period”); provided, that
the Company shall promptly (i) notify the Holder in writing of the existence of
material, non-public information giving rise to a Grace Period (provided that in
each notice the Company will not disclose the content of such material,
non-public information to the Holder) and the date on which the Grace Period
will begin, and (ii) notify the Holder in writing of the date on which the Grace
Period ends; and, provided further, that no Grace Period shall exceed twenty
(20) consecutive Trading Days and during any three hundred sixty five (365) day
period such Grace Periods shall not exceed an aggregate of thirty (30) Trading
Days (each, an “Allowable Grace Period”). During the term of any Grace Period,
the Company after consultation with its counsel may (i) defer any registration
of Registrable Securities and have the right not to file and not to cause the
effectiveness of any registration statement covering any Registrable Securities,
(ii) suspend the use of any prospectus and Registration Statement covering any
Registrable Securities and (iii) require the Holder to suspend any offerings or
sales of Registrable Securities pursuant to a Registration Statement. For
purposes of determining the length of a Grace Period above, the Grace Period
shall begin on and include the date the Holder receives the notice referred to
in clause (i) and shall end on and include the later of the date the Holder
receives the notice referred to in clause (ii) and the date referred to in such
notice. The provisions of Section 3(g) hereof shall not be applicable during the
period of any Allowable Grace Period. Upon expiration of the Grace Period, the
Company shall again be bound by the first sentence of Section 3(f) with respect
to the information giving rise thereto unless such material, non-public
information is no longer applicable. Notwithstanding anything to the contrary,
the Company shall use reasonable best efforts to cause its transfer agent to
deliver unlegended shares of Common Stock to a transferee of the Holder in
connection with any sale of Registrable Securities with respect to which the
Holder has entered into a contract for sale, prior to the Holder’s receipt of
the notice of a Grace Period and for which the Holder has not yet settled.

 

(q) Except in the circumstances set forth in Sections 3(h) and 3(i) hereof,
neither the Company nor any Subsidiary or Affiliate thereof shall identify the
Holder as an underwriter in any public disclosure or filing with the SEC, the
Principal Market or any Eligible Market without the prior written consent of the
Holder and the Holder being deemed an underwriter by the SEC shall not relieve
the Company of any obligations it has under this Agreement or the Credit
Agreement; provided, however, that the foregoing shall not prohibit the Company
from including the disclosure found in the “Plan of Distribution” section
attached hereto as Exhibit B in the Registration Statement.

 

(r) Neither the Company nor any of its Subsidiaries has entered, as of the date
hereof, nor shall the Company or any of its Subsidiaries, on or after the date
of this Agreement, enter into any agreement with respect to its securities, that
would have the effect of impairing the rights granted to the Holder in this
Agreement or otherwise conflicts with the provisions hereof. Notwithstanding the
foregoing, Holder expressly agrees that the existing registration rights set
forth in the SNI Merger Agreement and in the Jax Legacy Registration Rights
Agreement do not violate the preceding sentence.

 

  13

 

 

4. Obligations of the Holder.

 

(a) At least five (5) Business Days prior to the first anticipated Filing Date
of a Registration Statement, the Company shall notify the Holder in writing of
the information the Company requires from the Holder. It shall be a condition
precedent to the obligations of the Company to complete any registration
pursuant to this Agreement with respect to the Registrable Securities that the
Holder shall furnish in a timely manner 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) The Holder 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) During such time as the Holder may be engaged in a distribution of the
Registrable Securities, the Holder will comply with all laws applicable to such
distribution, including Regulation M promulgated under the 1934 Act, and, to the
extent required by such laws, will, among other things (i) not engage in any
stabilization activity in connection with the securities of the Company in
contravention of such laws; (ii) distribute the Registrable Securities acquired
by it solely in the manner described in the applicable Registration Statement
and (iii) if required by applicable law, cause to be furnished to each agent or
broker-dealer to or through whom such Registrable Securities may be offered, or
to the offeree if an offer is made directly by the Holder, such copies of the
applicable prospectus (as amended and supplemented to such date) and documents
incorporated by reference therein as may be required by such agent,
broker-dealer or offeree.

 

(d) The 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 Section 3(f), the Holder will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s) covering such
Registrable Securities until the Holder’s receipt of copies of the supplemented
or amended prospectus as 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, the Company shall cause its transfer
agent to deliver unlegended shares of Common Stock to a transferee of the Holder
in connection with any sale of Registrable Securities with respect to which the
Holder has entered into a contract for sale prior to the 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 the Holder has
not yet settled.

 

(e) The Holder covenants and agrees that it will comply with the prospectus
delivery requirements of the 1933 Act as applicable to it or an exemption
therefrom in connection with sales of Registrable Securities pursuant to the
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, and fees and disbursements of
counsel for the Company shall be paid by the Company. The Company shall also
reimburse the Holder for the fees and disbursements of Legal Counsel in
connection with registration, filing or qualification pursuant to Sections 2 and
3 of this Agreement which amount shall be limited to $25,000 for each such
registration, filing or qualification.

 

  14

 

 

6. Indemnification.

 

In the event any Registrable Securities are included in a Registration Statement
under this Agreement:

 

(a) To the fullest extent permitted by law, the Company shall, and hereby does,
indemnify, hold harmless and defend the Holder, the directors, officers,
partners, members, employees, agents, representatives of, and each Person, if
any, who controls the Holder within the meaning of the 1933 Act or the 1934 Act
(each, an “Indemnified Person”), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’
fees, 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 or alleged 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 or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) any untrue statement or alleged 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 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, (iii) any violation or alleged violation by the Company of
the 1933 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 or
(iv) any violation of this Agreement (the matters in the foregoing clauses (i)
through (iv) being, collectively, “Violations”). For the avoidance of doubt, the
indemnification set forth in this Section 6 is intended to apply, and shall
apply, to direct claims asserted by the Holder against the Company as well as
any third party claims asserted by an Indemnitee (other than the Holder) against
the Company. 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 the Registration Statement or any such amendment thereof
or supplement thereto, if such prospectus was timely made available by the
Company pursuant to Section 3(d); (ii) shall not apply to a Claim by an
Indemnified Person to the extent caused solely by its own gross negligence or
willful misconduct; 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
the Registrable Securities by the Holder pursuant to Section 9.

 

  15

 

 

(b) In connection with any Registration Statement, the Holder agrees to
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 1933 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 1933 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 the Holder expressly for use in connection with such
Registration Statement; and, subject to Section 6(c), the Holder shall reimburse
the Indemnified Party for any legal or other expenses reasonably incurred by an
Indemnified Party in connection with investigating or defending any such Claim;
provided, however, that 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 the Holder, which consent shall not be
unreasonably withheld or delayed; provided, further, however, that the 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 the Holder as a
result of the 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 the Registrable Securities by the Holder pursuant to
Section 9.

 

(c) Promptly after receipt by an Indemnified Person or Indemnified Party under
this Section 6 of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) involving a Claim, such
Indemnified Person or Indemnified Party 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, except in
the case of a direct claim against the indemnifying party, 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, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for all such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the Indemnified Person or
Indemnified Party, as applicable, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding. In the case of an Indemnified Person, legal counsel
referred to in the immediately preceding sentence shall be selected by the
Holder. The Indemnified Party or Indemnified Person 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 which relates to such action or Claim. The indemnifying
party shall keep the Indemnified Party or 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 prior written consent,
provided, however, that 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, 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 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 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 under this Section 6, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action. For the avoidance of doubt, the provisions of this Section 6(c) shall
not apply to direct claims between the Company and the Holder.

 

  16

 

 

(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 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, that: (i) 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 1933
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 (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the amount of net proceeds received by
such seller from the sale of such Registrable Securities pursuant to such
Registration Statement.

 

8. Reports Under the 1934 Act.

 

With a view to making available to the Holder the benefits of Rule 144
promulgated under the 1933 Act or any other similar rule or regulation of the
SEC that may at any time permit the Holder to sell securities of the Company to
the public without registration (“Rule 144”), 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 1933 Act and the 1934 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; and

 

(c) furnish to the Holder so long as the Holder owns Registrable Securities,
promptly upon request, (i) a written statement by the Company, if true, that it
has complied with the reporting requirements of Rule 144, the 1933 Act and the
1934 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 Holder to
sell such securities pursuant to Rule 144 without registration. Notwithstanding
the foregoing, the Company shall not be obligated to send or deliver any of the
foregoing to the Holder to the extent any of them are filed, furnished or
otherwise made publicly available on the Company’s website or the SEC’s EDGAR
(or any similar) electronic filing system.

 

  17

 

 

9. Assignment of Registration Rights.

 

The rights under this Agreement shall be automatically assignable by the Holder
to any transferee of all or any portion of the Holder’s Registrable Securities
or the Holder’s interests as a lender under the Credit Agreement if: (i) the
Holder agrees in writing with the transferee or assignee to assign such rights,
and a copy of such agreement is furnished to the Company within a reasonable
time after such assignment; (ii) the Company is, within a reasonable time after
such transfer or assignment, furnished with written notice of (a) the name and
address of such transferee or assignee, and (b) the securities with respect to
which such registration rights are being transferred or assigned; (iii)
immediately following such transfer or assignment the further disposition of
such securities by the transferee or assignee is restricted under the 1933 Act
or applicable state securities laws; and (iv) at or before the time the Company
receives the written notice contemplated by clause (ii) of this sentence the
transferee or assignee agrees in writing with the Company to be bound by all of
the provisions contained herein by delivering to the Company a duly executed
joinder agreement.

 

10. Amendment of Registration Rights.

 

Provisions of this Agreement may be amended and the observance thereof may be
waived (either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Holder. Any
amendment or waiver effected in accordance with this Section 10 shall be binding
upon the Holder and the Company.

 

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 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 delivery, when sent by facsimile or electronic mail (provided confirmation
of transmission is mechanically or electronically generated and kept on file by
the sending party); or (iii) one Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses, facsimile numbers and email addresses
for such communications shall be:

 

If to the Company:

 

GEE Group Inc.

7751 Belfort Parkway, Suite 150 Jacksonville, Florida 32256

Attention: Derek Dewan

Telephone:

Email: derek.dewangeegroup.com

 

with a copy (which shall not constitute notice) to:

 

Loeb & Loeb LLP

345 Park Avenue

New York, New York 10154

Telephone:       (212) 407-4000

Facsimile:         (212) 407-4990

Attention:         Mitchell Nussbaum, Esq.

                          Angela Dowd, Esq.

 

  18

 

 

If to the Holder:

 

MGG Investment Group LP

One Penn Plaza, 53rd Floor

New York, New York 10119

Attention:       Kevin F. Griffin

Telephone:      212-356-6100

Email: creditagreementnotices@mgginv.com

 

with a copy (which shall not constitute notice) to:

 

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York 10022

Telephone:       (212) 756-2000

Facsimile:         (212) 593-5955

Attention:         Frederic L. Ragucci, Esq.

                          F. Xavier Kowalski, Esq.

 

(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.

 

(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 York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, 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.
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) If any provision of this Agreement is prohibited by law or otherwise
determined to be invalid or unenforceable by a court of competent jurisdiction,
the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be valid and
enforceable, and the invalidity or unenforceability of such provision shall not
affect the validity of the remaining provisions of this Agreement so long as
this Agreement as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the provision(s) in
question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that
would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes as close as
possible to that of the prohibited, invalid or unenforceable provision(s).

 

  19

 

 

(f) This Agreement, the Credit Agreement and the instruments referenced herein
and therein 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, the Credit Agreement and the instruments
referenced herein and therein supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.

 

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

 

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

 

(i) 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 or electronic transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.

 

(j) 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.

 

(k) 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.

 

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

 

* * * * * *

 

[Signature Page Follows]

 

  20

 

 

IN WITNESS WHEREOF, the 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:

 

 

 

 

 

 

GEE GROUP INC.

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

A-1

 

 

IN WITNESS WHEREOF, the 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.

 

 

HOLDER:

 

 

 

 

 

 

MGG INVESTMENT GROUP LP

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

A-2

 

 

EXHIBIT A

 

FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT

 

[TRANSFER AGENT]

[_________]
[_________]
Attention: [_________]

Re:

GEE Group Inc.

 

Ladies and Gentlemen:

 

[We are][I am] counsel to GEE Group Inc., an Illinois corporation (the
“Company”), and have represented the Company in connection with that certain
Revolving Credit, Term Loan and Security Agreement by and among the parties
hereto dated as of March 31, 2017, (the “Credit Agreement”), entered into by and
among the Company, the other borrowers named therein and MGG Investment Group LP
(the “Holder”), as amended, pursuant to which the Company issued to the Holder
shares of the Company’s common stock (the “Common Stock”). Pursuant to the
Credit Agreement, the Company also has entered into a Registration Rights
Agreement with the Holder (the “Registration Rights Agreement”) pursuant to
which the Company agreed, among other things, to register the resale of the
Registrable Securities (as defined in the Registration Rights Agreement),
including the shares of Common Stock issuable pursuant to the Credit Agreement
under the Securities Act of 1933, as amended (the “1933 Act”). In connection
with the Company’s obligations under the Registration Rights Agreement, on
____________ ___, 202_, the Company filed a Registration Statement on Form
S-[1][3] (File No. 333-_____________) (the “Registration Statement”) with the
Securities and Exchange Commission (the “SEC”) relating to the Registrable
Securities which names the Holder as a selling shareholder thereunder.

 

In connection with the foregoing, [we][I] advise you that a member of the SEC’s
staff has advised [us][me] by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and [we][I] have no
knowledge, after telephonic inquiry of a member of the SEC’s staff, 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
Registrable Securities are available for resale under the 1933 Act pursuant to
the Registration Statement.

 

This letter shall serve as our standing instruction to you that the shares of
Common Stock are freely transferable by the Holder pursuant to the Registration
Statement. You need not require further letters from us to effect any future
legend-free issuance or reissuance of shares of Common Stock to the Holder as
contemplated by the Company’s Transfer Agent Instructions dated [●], 2020.

 

  Very truly yours,

 

    

 

 

[ISSUER’S COUNSEL]

 

        By:

 

 

        CC: [HOLDER]      

 

 

A-1

 

  

EXHIBIT B

SELLING SHAREHOLDER

 

The shares of common stock being offered by the selling shareholder are those
issuable to the selling shareholder pursuant to the [Credit Agreement]. For
additional information regarding the [Credit Agreement], see “[_____]” above. We
are registering the shares of common stock in order to permit the selling
shareholder to offer the shares for resale from time to time.1

 

The table below lists the selling shareholder and other information regarding
the beneficial ownership of the shares of common stock by the selling
shareholder. The second column lists the number of shares of common stock
beneficially owned by the selling shareholder as of ________, 20__. The third
column lists the shares of common stock being offered by this prospectus by the
selling shareholder.

 

In accordance with the terms of a registration rights agreement with the selling
shareholder, this prospectus generally covers the resale of the number of shares
of common stock issued and issuable pursuant to the [Credit Agreement], subject
to adjustment as provided in the registration rights agreement and the [Credit
Agreement] and in each case without regard to any limitations on the issuance of
shares of common stock pursuant to the terms of the Credit Agreement. Because
the number of shares issuable pursuant to the [Credit Agreement] 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 shareholder
pursuant to this prospectus.

 

Under the terms of the [Credit Agreement], the selling shareholder may not
receive shares to the extent such receipt would cause the selling shareholder,
together with its affiliates, to beneficially own a number of shares of common
stock which would exceed, except in limited circumstances, [4.9][9.9]% of our
then outstanding shares of common stock following such receipt. The number of
shares in the second column does not reflect this limitation.

 

__________________

1 NTD: Other relationships between the Company and MGG to be described.

 

  Annex I-1

 

 

The selling shareholder may sell all, some or none of its shares in this
offering. See “Plan of Distribution.”

 

 

Name of Selling Shareholder

 

Number of Shares of Common Stock Owned Prior to Offering

 

 

Maximum Number of Shares of Common Stock to be Sold Pursuant to this Prospectus

 

 

Number of Shares of Common Stock Owned After Offering

 

 

Percentage of Shares of Common Stock Owned After Offering

 

[MGG] (1)

 

 

 

 

 

 

 

 

0

 

 

 

0

 

 

* Denotes less than one percent (1.0%).

 

(1) [TO BE PROVIDED].

 

  Annex I-2

 

 

PLAN OF DISTRIBUTION

 

We are registering the shares of common stock issuable pursuant to the terms of
the [Credit Agreement] to permit the resale of these shares of common stock by
the holder thereof from time to time after the date of this prospectus. We will
not receive any of the proceeds from the sale by the selling shareholder 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 shareholder may sell all or a portion of the shares of common stock
beneficially owned by it 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
shareholder 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,

 

 

·

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 of options, whether such options are listed on an options
exchange or otherwise;

 

 

 

 

·

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

 

 

 

 

·

in 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;

 

 

 

 

·

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

 

 

 

 

·

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

 

 

 

 

·

through privately negotiated transactions;

 

 

 

 

·

through short sales;

 

 

 

 

·

through sales pursuant to Rule 144;

 

 

 

 

·

through block trades in which broker-dealers may agree with the selling
shareholder 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.

 

  Annex I-3

 

 

If the selling shareholder effects 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 shareholder 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 shareholder 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 shareholder 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 shareholder may also loan or pledge shares of common stock to
broker-dealers that in turn may sell such shares.

 

The selling shareholder may pledge or grant a security interest in some or all
of its shares of common stock and, if it defaults in the performance of its
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 of 1933, as amended, amending, if necessary, the list of
selling shareholders to include the pledgee, transferee or other successors in
interest as selling shareholders under this prospectus. The selling shareholder
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.

 

The selling shareholder 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 shareholder and any
discounts, commissions or concessions allowed or reallowed 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 the selling shareholder will sell any or all of
the shares of common stock registered pursuant to the registration statement, of
which this prospectus forms a part.

 

  Annex I-4

 

 

The selling shareholder 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, 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
shareholder and any other participating person. 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, that the selling shareholder will pay all underwriting discounts and
selling commissions, if any. We will indemnify the selling shareholder against
liabilities, including some liabilities under the Securities Act, in accordance
with the registration rights agreements, or the selling shareholder will be
entitled to contribution. We may be indemnified by the selling shareholder
against civil liabilities, including liabilities under the Securities Act, that
may arise from any written information furnished to us by the selling
shareholder specifically for use in this prospectus, in accordance with the
related registration rights agreement, 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.

 

  

Annex I-5