CONTANGO ORE, INC. REGISTRATION RIGHTS AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

This REGISTRATION RIGHTS AGREEMENT, dated as of November 15, 2016 is by and among Contango ORE, Inc., a company duly incorporated and existing under the laws of Delaware (together with any successor entity, herein referred to as the “Company”), and the purchasers set forth on the signature page below (collectively, the “Purchasers”).

 

RECITALS

 

 

 

 

 

AGREEMENT

 

The parties hereby agree as follows:

 

 

“Affiliate”:  Of any specified person, means any other person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such specified person.  For purposes of this definition, “control” of a person means the power, direct or indirect, to direct or cause the direction of the management and policies of such person, whether by contract or otherwise.

 

“Agreement”:  This Registration Rights Agreement, as amended from time to time.

 

“Amendment Effectiveness Deadline Date”:  As defined in Section 4(b)(i) hereof.

 

“Blue Sky Application”:  As defined in Section 6(a)(i) hereof.

 

 

“Business Day”:  A day, other than a Saturday or Sunday, that in the City of New York, is not a day on which banking institutions are authorized or required by law, regulation or executive order to close.

 

“Closing Date”:  The Expiration Date (as defined in the Exercise Offer).

 

“Common Stock”:  The common stock of the Company, par value $0.01.

 

“Company”:  As defined in the preamble hereto.

 

“Demand Notice”:  As defined in Section 2(a) hereof.

 

“Demand Registration”:  As defined in Section 2(a) hereof.

 

“Effectiveness Period”:  As defined in Section 2(b) hereof.

 

“Exchange Act”:  Securities Exchange Act of 1934, as amended.

 

“Exercise Offer”: As defined in the recitals hereto.

 

“Holder”:  A Person who owns, beneficially or otherwise, Registrable Securities.

 

“Indemnified Holder”:  As defined in Section 6(a) hereof.

 

“Indemnified Party”:  As defined in Section 6(c) hereof.

 

“Indemnifying Party”:  As defined in Section 6(c) hereof.

 

“Majority of Holders”:  Holders holding over 50% of the Registrable Securities outstanding.

 

“Notice and Questionnaire”:  A written notice executed by the respective Holder and delivered to the Company containing substantially the information called for by the Selling Securityholder Notice and Questionnaire attached as Annex A hereto.

 

“Notice Holder”:  On any date, any Holder of Registrable Securities that has delivered a completed Notice and Questionnaire to the Company on or prior to such date.

 

“Person”:  An individual, partnership, limited liability company, corporation, company, unincorporated organization, trust, joint venture, a government or agency or political subdivision thereof or any other legally recognized entity.

 

“Prospectus”:  The prospectus included in a Registration Statement, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such prospectus.

 

“Purchasers”:  As defined in the preamble hereto.

 

“Registrable Securities”:  (a) Each share of Common Stock issued to the Holders pursuant to the exercise of Warrants in the Exercise Offer, and (b) any shares of Common Stock issued as a dividend or other distribution with respect to, or in exchange for, or in replacement of, the Common Stock issued in clause (a).  As to any particular Registrable Securities, such securities shall cease to be Registrable Securities on:

 

 

 

 

 

“Registration Statement”:  A registration statement required to be filed hereunder pursuant to Section 2(b), including the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre-and post-effective amendments, all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.

 

“SEC”:  Securities and Exchange Commission.

 

“Securities Act”:  Securities Act of 1933, as amended.

 

“Shares”:  As defined in the recitals hereto.

 

“Shelf Registration”:  As defined in Section 2(b) hereof.

 

“Subscription Agreements”:  As defined in the recitals hereto.

 

“Suspension Notice”:  As defined in Section 4(e) hereof.

 

“Suspension Period”:  As defined in Section 4(e) hereof.

 

“Transfer Agent”:  Computershare Investor Services.

 

“Warrants”: As defined in the recitals hereto.

 

Unless the context otherwise requires, the singular includes the plural, and words in the plural include the singular.

 

 

 

 

 

 

 

 

 

 

provided, that the Company may exercise its rights under this Section 2(d) no more than once during any three hundred sixty-five (365) day period.

 

 

 

 

 

 

 

 

 

 

 

 

 

provided, that if such Notice and Questionnaire is delivered during a Suspension Period, the Company shall so inform the Holder delivering such Notice and Questionnaire and shall take the actions set forth in clauses (i), (ii) and (iii) above upon expiration of the Suspension Period in accordance with Section 4(d). Notwithstanding anything contained herein to the contrary, during any period during which the Company is not entitled to file a Prospectus or a supplement to a Prospectus (related to an automatic shelf registration statement) naming new selling security holders, the Amendment Effectiveness Deadline Date shall be extended by up to five (5) Business Days from the expiration of a Suspension Period if such Suspension Period shall be in effect on the Amendment Effectiveness Deadline Date.

 

 

 

 

 

 

 

(1) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to the Registration Statement or any post-effective amendment thereto, when the same has become effective,

 

(2) of any request by the SEC for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto,

 

(3) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement under the Securities Act or of the suspension by any state securities commission of the qualification of the Registrable Securities for offering or sale in any jurisdiction, or

 

(4) of the existence of any fact or the happening of any event, during the Effectiveness Period, that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto, or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement or the Prospectus in order to make the statements therein not misleading.

 

 

 

 

 

 

 

 

 

 

 

If so directed by the Company, each Holder will deliver to the Company (at the Company’s expense) all copies, other than permanent file copies then in such Holder’s possession, of the Prospectus covering such Registrable Securities that was current at the time of receipt of such Suspension Notice.

 

 

 

All expenses incident to the Company’s performance of or compliance with this Agreement shall be borne by the Company regardless of whether a Registration Statement becomes effective, including, without limitation:

 

 

 

 

 

 

 

The Company shall bear its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal, accounting or other duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company.  Notwithstanding anything to the contrary, in no event shall the Company be responsible for any broker or similar commissions of any Holder or any legal or accounting fees incurred by any Holder.

 

 

 

 

 

and agrees to reimburse each Indemnified Holder promptly upon demand for any legal or other expenses reasonably incurred by such Indemnified Holder in connection with investigating, defending, settling, compromising or paying any such loss, claim, damage, liability, expense or action; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability or expense arises out of, or is based upon, any untrue statement or alleged untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to the Company (or based upon written information furnished by or on behalf of the Company) relating to a Holder by or on behalf of such Holder (or its related Indemnified Holder) specifically for use therein.

 

 

 

 

but only with respect to any material misstatements or omissions in the written information relating to such Holder furnished to the Company by or on behalf of such Holder that has been specifically included in a Registration Statement or Prospectus.

 

 

 

 

 

 

 

The relative benefits received by the Company on the one hand and a Holder on the other with respect to such offering and such sale shall be deemed to be in the same proportion as the net proceeds from the offering of the Registrable Securities purchased upon exercise of the Warrants in the Exercise Offer (before deducting expenses) received by the Company, on the one hand, bear to the total proceeds received by such Holder with respect to its sale of Registrable Securities on the other.  The relative fault of the parties shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or written information furnished to the Company by or on behalf of the Holders specifically for use in a registration statement on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission.  The Company and each Holder agree that it would not be just and equitable if the amount of contribution pursuant to this Section 6(e) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the first sentence of this subparagraph (e).

 

The amount paid or payable by an Indemnified Party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 6 shall be deemed to include, for purposes of this Section 6, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending or preparing to defend any such action or claim.

 

No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.  The Holders’ obligations to contribute as provided in this Section 6(e) are several and not joint.

 

 

 

 

 

 

 

 

 

 

All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery.

 

Any party hereto may change the address for receipt of communications by giving written notice to the others.

 

 

 

 

 

 

 

 

 

 

 

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

 

 

 

 

	PURCHASER:
	[l]
	Number of Shares:

 

 

Annex A

 

 

FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE

 

The undersigned beneficial holder of securities of Contango ORE, Inc. (the “Company”) understands that the Company has filed or intends to file with the Securities and Exchange Commission (the “SEC”) a registration statement (the “Registration Statement”) for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement, dated as of November 15, 2016 (the “Registration Rights Agreement”), between the Company and the Purchasers named therein.  A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below.  All capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Registration Rights Agreement.

 

Each beneficial holder of Registrable Securities (each a “beneficial owner”), is entitled to the benefits of the Registration Rights Agreement.  In order to sell or otherwise dispose of any Registrable Securities pursuant to the Registration Statement, a beneficial owner of Registrable Securities generally will be required to be named as a selling securityholder in the related prospectus, deliver a prospectus to purchasers of Registrable Securities and be bound by those provisions of the Registration Rights Agreement applicable to such beneficial owner (including certain indemnification provisions as described below).  Beneficial owners that do not complete this Notice and Questionnaire and deliver it to the Company as provided below will not be named as selling securityholders in the prospectus and therefore will not be permitted to sell any Registrable Securities pursuant to the Registration Statement.

 

Certain legal consequences arise from being named as a selling securityholder in the Registration Statement and the related prospectus.  Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Registration Statement and the related prospectus.

 

 

NOTICE

 

The undersigned beneficial owner (the “Selling Securityholder”) of Registrable Securities hereby gives notice to the Company of its intention to sell or otherwise dispose of Registrable Securities beneficially owned by it and listed below in Item 3 (unless otherwise specified under such Item 3) pursuant to the Registration Statement.  The undersigned, by signing and returning this Notice and Questionnaire, understands that it, he or she will be bound by the terms and conditions of this Notice and Questionnaire and the Registration Rights Agreement.

 

Pursuant to the Registration Rights Agreement, the undersigned has agreed to indemnify and hold harmless the Company’s directors and officers and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), from and against certain losses arising in connection with statements concerning the undersigned made, with the approval of the undersigned, not to be unreasonably withheld, in the Company’s Registration Statement or the related prospectus in reliance upon the information provided in this Notice and Questionnaire.

 

If the Selling Securityholder transfers all or any portion of the Registrable Securities listed in Item 3 below after the date on which such information is provided to the Company, the Selling Securityholder agrees to notify the transferee(s) at the time of the transfer of its rights and obligations under this Notice and Questionnaire and the Registration Rights Agreement, and the Company will require such transferree(s) to execute a questionnaire and such other documentation to ensure compliance with applicable law and regulations.

 

 

QUESTIONNAIRE

 

Please respond to every item, even if your response is “none.”  If you need more space for any response, please attach additional sheets of paper.  Please be sure to indicate your name and the number of the item being responded to on each such additional sheet of paper, and to sign each such additional sheet of paper before attaching it to this Questionnaire.  Please note that you may be asked to answer additional questions depending on your responses to the following questions.

 

If you have any questions about the contents of this Questionnaire or as to who should complete this Questionnaire, please contact ▇▇. ▇▇▇▇ ▇▇▇▇▇▇ of the Company at telephone number:

 

(▇▇▇) ▇▇▇-▇▇▇▇

 

The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate and complete:

 

1.	Your Identity and Background as the Beneficial Owner of the Registrable Securities.
	(a)	Your full legal name:
	(b)	Your business address (including street address) (or residence if no business address), telephone number and facsimile number:
		Address:
		Telephone No.:
		Fax No.:
	(c)	Are you a broker-dealer registered pursuant to Section 15 of the Exchange Act?
		☐ Yes.
		☐ No.
	(d)	If your response to Item 1(c) above is no, are you an "affiliate" of a broker-dealer registered pursuant to Section 15 of the Exchange Act?
		☐ Yes.
		☐ No.
		For the purposes of this Item 1(d), an "affiliate" of a registered broker-dealer includes any person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such broker-dealer, and does not include any individuals employed by such broker-dealer or its affiliates.

 

 

 

 

 

 

 

 

 

 

 

 

 

5.	Short Positions
	(A) Do you have an existing short position in the equity securities of the Company?
	☐ Yes.
	☐ No.
	(B) If the answer to (A) is “Yes,” please describe the equity securities involved and the size of the short position.
	(C) If the answer to (A) is “Yes” and the short position was created prior to the registration of the Registrable Securities, the short position may not be closed out with any Registrable Securities you own.
6.	Plan of Distribution.
	Except as set forth below, the undersigned (including its donees or pledgees) intends to distribute the Registrable Securities listed above in Item 3 pursuant to the Registration Statement only as follows (if at all): Such Registrable Securities may be sold from time to time directly by the undersigned or, alternatively, through underwriters, broker-dealers or agents. If the Registrable Securities are sold through underwriters, broker-dealers or agents, the Selling Securityholder will be responsible for underwriting discounts or commissions or agents’ commissions in accordance with the Registration Rights Agreement. Such Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale or at negotiated prices. Such sales may be effected in transactions (which may involve block transactions) (i) on any national securities exchange or quotation service on which the Registrable Securities may be listed or quoted at the time of sale, (ii) in the over-the-counter market, or (iii) in transactions other than on such exchanges or services or in the over-the-counter market. The Selling Securityholder may pledge or grant a security interest in some or all of the Registrable Securities owned by it and, if it defaults in the performance of its secured obligations, the pledgees or secured parties may offer and sell the Registrable Securities from time to time pursuant to the prospectus. The Selling Securityholder also may transfer and donate the Registrable Securities in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling securityholder for purposes of the prospectus.
	State any exceptions here:

Note:  In no event will such method(s) of distribution take the form of an underwritten offering of the Registrable Securities without the prior written agreement of the Company.

 

The undersigned acknowledges its, his or her obligation to comply with the provisions of the Exchange Act and the rules thereunder relating to stock manipulation, particularly Regulation M thereunder (or any successor rules or regulations), in connection with any offering of Registrable Securities pursuant to the Registration Rights Agreement.  The undersigned agrees that neither it, he, she nor any person acting on its, his or her behalf will engage in any transaction in violation of such provisions.

 

The undersigned beneficial owner and selling securityholder hereby acknowledges its, his or her obligations under the Registration Rights Agreement to indemnify and hold harmless certain persons as set forth therein.  Pursuant to the Registration Rights Agreement, the Company has agreed under certain circumstances to indemnify the undersigned beneficial owner and selling securityholder against certain liabilities.

 

In accordance with the undersigned’s obligation under the Registration Rights Agreement to provide such information as may be required by law for inclusion in the Registration Statement, the undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective.

 

All notices to the beneficial owner hereunder and pursuant to the Registration Rights Agreement shall be made in writing to the undersigned at the address set forth in Item 1(b) of this Notice and Questionnaire.

 

By signing below, the undersigned acknowledges that it, he or she is the beneficial owner of the Registrable Securities set forth herein, consents to the disclosure of the information contained in this Notice and Questionnaire and the inclusion of such information in the Registration Statement and the related prospectus.  The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus.

 

Once this Notice and Questionnaire is executed by the undersigned beneficial owner and received by the Company, the terms of this Notice and Questionnaire, and the representations and warranties contained herein, shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives and assigns of the Company and the undersigned beneficial owner.  This Notice and Questionnaire shall be governed in all respects by the laws of the State of New York, without giving effect to rules governing the conflict of laws.

 

 

IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.

 

 

 

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE TO CONTANGO ORE, INC. AS FOLLOWS:

 

 

Contango ORE, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention:  ▇▇▇▇ ▇▇▇▇▇▇
Facsimile:  713-621-7329