Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of August 31, 2010, between ▇▇▇▇▇▇▇▇ Mining Inc., a Nevada
corporation (the "Company"), and each of the Persons who are signatories
hereto (each such purchaser, a "Purchaser" and, collectively, the
"Purchasers").
This Agreement is made pursuant to the Purchase Agreement (as defined
herein).
The Company and each Purchaser hereby agrees as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein
that are defined in the Purchase Agreement shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following
terms shall have the following meanings:
"Advice" shall have the meaning set forth in Section 6(c).
"Additional Dividends" shall have the meaning set forth in Section
6(a).
"Commission" means the U.S. Securities and Exchange Commission.
"Effectiveness Period" shall have the meaning set forth in Section
2(b).
"FINRA" means the Financial Industry Regulatory Authority.
"Holder" or "Holders" means the holder or holders, as the case may be,
from time to time of Registrable Securities.
"Indemnified Party" shall have the meaning set forth in Section 5(c).
"Indemnifying Party" shall have the meaning set forth in Section 5(c).
"Losses" shall have the meaning set forth in Section 5(a).
"Prospectus" means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated by the
Commission pursuant to the Securities Act), as amended or supplemented, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference
in such Prospectus.
"Purchase Agreement" means the Securities Purchase Agreement, dated as
of the date hereof, among the Company and the initial Holders party hereto,
as amended, modified or supplemented from time to time in accordance with its
terms.
"Registration Default" shall have the meaning set forth in Section
6(a).
"Registrable Securities" means, as of any date of determination, (a)
the Underlying Shares with respect to the Preferred Stock; (b) any securities
issued or then issuable upon any stock split, dividend or other distribution,
recapitalization or similar event with respect to the foregoing; provided,
however, that any such Registrable Securities shall cease to be Registrable
Securities (and the Company shall not be required to maintain the
effectiveness of any, or file another, Registration Statement hereunder with
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respect thereto) for so long as (i) a Registration Statement with respect to
the sale of such Registrable Securities is declared effective by the
Commission under the Securities Act and such Registrable Securities have been
disposed of by the Holder in accordance with such effective Registration
Statement, (ii) such Registrable Securities have been previously sold in
accordance with Rule 144, or (iii) such securities become eligible for resale
without volume or manner-of-sale restrictions (provided the Company is
current with the public information requirements as determined by the counsel
to the Company as set forth in a written opinion letter to such effect,
addressed, delivered and acceptable to the Transfer Agent and the affected
Holders (assuming that such securities and any securities issuable upon
exercise, conversion or exchange of which, or as a dividend upon which, such
securities were issued or are issuable, were at no time held by any Affiliate
of the Company), as reasonably determined by the Company, upon the advice of
counsel to the Company.
"Registration Statement" means any registration statement required to
be filed hereunder pursuant to Section 2 (Registration) or Section 6(d)
(Piggyback Registrations), including (in each case) 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.
"Rule 144" means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.
"Rule 424" means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.
"Selling Stockholder Questionnaire" shall have the meaning set forth in
Section 3(a).
"Significant Holder" shall have the meaning set forth in Section 3(a).
"10-K Filing Date" shall have the meaning set forth in Section 2(a).
2. Registration.
(a) The Company shall, at its own cost, prepare and, not later than
45 days after (or if the 45th day is not a business day, the first business
day thereafter) the date upon which the Company's annual report on Form 10-K
for the fiscal year ending December 31, 2010 is filed with the Commission
(the "10-K Filing Date"), file with the Commission a Registration Statement
covering the resale of the Registrable Securities by each Holder.
(b) The Registration Statement filed hereunder shall be on an
appropriate form as determined by the Board of Directors. Subject to the
terms of this Agreement, the Company shall cause a Registration Statement
filed hereunder to be declared effective under the Securities Act as promptly
as possible after the filing thereof but in no event later than the one (1)
year anniversary of the Closing Date, and shall use its best efforts to keep
such Registration Statement continuously effective under the Securities Act
until the earlier of: (i) the date on which all Registrable Securities
covered by such Registration Statement may be resold without registration and
without regard to any volume or manner-of-sale limitations by reason of Rule
144, without the requirement for the Company to be in compliance with the
current public information under Rule 144 or any other rule of similar
effect; (ii) the date on which all Registrable Securities covered by such
Registration Statement have been sold pursuant to a Prospectus or Rule 144 or
any other rule of similar effect; or (iii) as otherwise mutually agreed to
between the parties hereto (the "Effectiveness Period"). The Company shall
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telephonically request effectiveness of a Registration Statement as of 5:00
p.m. New York City time on a Trading Day. The Company shall immediately
notify the Holders via facsimile or by e-mail of the effectiveness of such
Registration Statement on the same Trading Day that the Company
telephonically confirms effectiveness with the Commission, which shall be the
date requested for effectiveness of such Registration Statement. The Company
shall, by 9:30 a.m. New York City time on the Trading Day after the effective
date of such Registration Statement, file a final Prospectus with the
Commission as required by Rule 424.
3. Registration Procedures. In connection with the Company's registration
obligations hereunder, the Company shall:
(a) Not less than ten (10) Trading Days prior to the filing of such
Registration Statement and not less than three (3) Trading Days prior to the
filing of any related Prospectus or any amendment or supplement thereto
(including any document that would be incorporated or deemed to be
incorporated therein by reference), the Company shall (i) furnish to each
Holder that has Registrable Securities constituting at least 35% of the
aggregate Registrable Securities included in such Registration Statement
(each, "Significant Holder") copies of all such documents proposed to be
filed, which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of such Significant
Holders, and (ii) cause its officers and directors, counsel and independent
registered public accountants to respond to such inquiries as shall be
necessary, in the reasonable opinion of respective counsel to each
Significant Holder, to conduct a reasonable investigation within the meaning
of the Securities Act. The Company shall not file a Registration Statement
or any amendments or supplements thereto to which the Significant Holders
shall reasonably object in good faith, provided that, the Company is notified
of such objection in writing no later than five (5) Trading Days after the
Significant Holders have been so furnished copies of a Registration Statement
or one (1) Trading Day after the Significant Holders have been so furnished
copies of any related Prospectus or amendments or supplements thereto. Each
Holder agrees to furnish to the Company a completed questionnaire in the form
attached to this Agreement as Annex A (a "Selling Stockholder Questionnaire")
promptly after it has been requested by the Company, but in no event less
than five (5) Trading Days prior to the filing date of the Registration
Statement.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to a Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep a
Registration Statement effective as to the applicable Registrable Securities
for the Effectiveness Period and prepare and file with the Commission such
additional Registration Statements in order to register for resale under the
Securities Act all of the Registrable Securities, (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus
supplement (subject to the terms of this Agreement), and, as so supplemented
or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as
reasonably possible to any comments received from the Commission with respect
to a Registration Statement or any amendment thereto and provide as promptly
as reasonably possible to the Significant Holders true and complete copies of
all correspondence from and to the Commission relating to a Registration
Statement (provided that, the Company may excise any information contained
therein which would constitute material non-public information as to any
Significant Holder which has not executed a confidentiality agreement with
respect thereto with the Company), and (iv) comply in all material respects
with the applicable provisions of the Securities Act and the Exchange Act
with respect to the disposition of all Registrable Securities covered by a
Registration Statement during the applicable period in accordance (subject to
the terms of this Agreement) with the intended methods of disposition by the
Holders thereof set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented.
(c) Provide notice to the Holders whose Registrable Securities are to
be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof,
be accompanied by an instruction to suspend the use of the Prospectus until
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the requisite changes have been made) as promptly as reasonably possible
(and, in the case of clause (i)(A) below, not less than one (1) Trading Day
prior to such filing) and (if requested by any such Person) confirm such
notice in writing no later than one (1) Trading Day following the day:
(i) (A) with respect to the Significant Holders and all other
Holders whose Registrable Securities are to be sold in such registration,
notice of when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed;
(B) with respect only to the Significant Holders, notice
when the Commission notifies the Company whether there will be a "review" of
such Registration Statement and whenever the Commission comments in writing
on such Registration Statement; and
(C) with respect to the Significant Holders and all other
Holders whose Registrable Securities are to be sold in such registration,
notice of when the Registration Statement or any post-effective amendment
thereto has become effective;
(ii) with respect only to the Significant Holders, notice of
any request by the Commission or any other federal or state governmental
authority for amendments or supplements to a Registration Statement or
Prospectus or for additional information;
(iii) with respect to the Significant Holders and all other
Holders whose Registrable Securities are to be sold in such registration,
notice of the issuance by the Commission or any other federal or state
governmental authority of any stop order suspending the effectiveness of a
Registration Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings for that purpose;
(iv) with respect to the Significant Holders and all other
Holders whose Registrable Securities are to be sold in such registration,
notice of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose;
(v) with respect to the Significant Holders and all other
Holders whose Registrable Securities are to be sold in such registration,
notice of the occurrence of any event or passage of time that makes the
financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in a Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein
by reference untrue in any material respect or that requires any revisions to
a Registration Statement, Prospectus or other documents so that, in the case
of a Registration Statement or the Prospectus, as the case may be, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; and
(vi) with respect to the Significant Holders and all other
Holders whose Registrable Securities are to be sold in such registration,
notice of the occurrence or existence of any pending corporate development
with respect to the Company that the Company believes may be material and
that, in the determination of the Company, makes it not in the best interest
of the Company to allow continued availability of a Registration Statement or
Prospectus, provided that, any and all of such information shall remain
confidential to each Holder until such information otherwise becomes public,
unless disclosure by a Holder is required by law; provided, further, that
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notwithstanding each Holder's agreement to keep such information
confidential, each such Holder makes no acknowledgement that any such
information is material, non-public information.
(d) Use its best efforts to avoid the issuance of, or, if issued,
obtain the withdrawal of (i) any order stopping or suspending the
effectiveness of a Registration Statement, or (ii) any suspension of the
qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction, at the earliest practicable moment.
(e) Furnish to each Holder, without charge, at least one conformed
copy of each such Registration Statement and each amendment thereto,
including financial statements and schedules, all documents incorporated or
deemed to be incorporated therein by reference to the extent requested by
such Person, and all exhibits to the extent requested by such Person
(including those previously furnished or incorporated by reference) promptly
after the filing of such documents with the Commission; provided, that any
such item which is available on the ▇▇▇▇▇ system (or successor thereto) need
not be furnished in physical form.
(f) Subject to the terms of this Agreement, the Company hereby
consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders in connection with the offering and
sale of the Registrable Securities covered by such Prospectus and any
amendment or supplement thereto, except after the giving of any notice
pursuant to Section 3(d).
(g) The Company shall cooperate with any broker-dealer through which
a Holder proposes to resell its Registrable Securities in effecting a filing
with the FINRA Corporate Financing Department pursuant to FINRA Rule 5110, as
requested by any such Holder, and the Company shall pay the filing fee
required by such filing within two (2) Business Days of request therefor.
(h) Prior to any resale of Registrable Securities by a Holder, use
its commercially reasonable efforts to register or qualify or cooperate with
the selling Holders in connection with the registration or qualification (or
exemption from the Registration or qualification) of such Registrable
Securities for the resale by the Holder under the securities or Blue Sky laws
of such jurisdictions within the United States as any Holder reasonably
requests in writing, to keep each registration or qualification (or exemption
therefrom) effective during the Effectiveness Period and to do any and all
other acts or things reasonably necessary to enable the disposition in such
jurisdictions of the Registrable Securities covered by each Registration
Statement; provided, that, the Company shall not be required to qualify
generally to do business in any jurisdiction where it is not then so
qualified, subject the Company to any material tax in any such jurisdiction
where it is not then so subject or file a general consent to service of
process in any such jurisdiction.
(i) If requested by a Holder, cooperate with such Holder to
facilitate and coordinate with the Company's transfer agent the timely
preparation and delivery of certificates representing Registrable Securities
to be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase
Agreement, of all restrictive legends, and to enable such Registrable
Securities to be in such denominations and registered in such names as any
such Holder may request.
(j) Upon the occurrence of any event contemplated by Section 3(c), as
promptly as reasonably possible under the circumstances taking into account
the Company's good faith assessment of any adverse consequences to the
Company and its stockholders of the premature disclosure of such event,
prepare a supplement or amendment, including a post-effective amendment, to a
Registration Statement or a supplement to the related Prospectus or any
document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, neither a
Registration Statement nor such Prospectus will contain an untrue statement
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of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. If the Company
notifies the Holders in accordance with clauses (iii) through (vi) of Section
3(c) above to suspend the use of any Prospectus until the requisite changes
to such Prospectus have been made, then the Holders shall suspend use of such
Prospectus. The Company will use its best efforts to ensure that the use of
the Prospectus may be resumed as promptly as is reasonably practicable. The
Company shall be entitled to exercise its right under this Section 3(j) to
suspend the availability of a Registration Statement and Prospectus for a
period not to exceed 60 calendar days (which need not be consecutive days) in
any 12-month period.
(k) Comply with all applicable rules and regulations of the
Commission.
(l) The Company may require each selling Holder to furnish to the
Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and, if required by the Commission, the
natural persons thereof that have voting and dispositive control over the
shares.
4. Registration Expenses. All fees and expenses incident to the
performance of or compliance with, this Agreement by the Company shall be
borne by the Company whether or not any Registrable Securities are sold
pursuant to a Registration Statement. The fees and expenses referred to in
the foregoing sentence shall include, without limitation, (i) all
registration and filing fees (including, without limitation, reasonable fees
and expenses of the Company's counsel and independent registered public
accountants) (A) with respect to filings made with the Commission, (B) with
respect to filings required to be made with any Trading Market on which the
Common Stock is then listed for trading, (C) in compliance with applicable
state securities or Blue Sky laws reasonably agreed to by the Company in
writing (including, without limitation, fees and disbursements of counsel for
the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities) and (D) with respect to any sales of Registrable
Securities in an underwritten offering any filing fees payable to FINRA
pursuant to FINRA Rule 5110, so long as the broker is receiving no more than
a customary brokerage commission in connection with such sale, (ii) printing
expenses (including, without limitation, expenses of printing certificates
for Registrable Securities), (iii) fees and disbursements of counsel for the
Company, (iv) Securities Act liability insurance, if the Company so desires
such insurance, and (v) fees and expenses of all other Persons retained by
the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be
responsible for all of its internal expenses incurred in connection with the
consummation of the transactions contemplated by this Agreement (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit and
the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange as required hereunder. In
no event shall the Company be responsible for any broker or similar
commissions of any Holder or, except to the extent provided for in the
Transaction Documents, any legal fees or other costs of the Holders.
5. Indemnification.
(a) Indemnification by the Company. The Company shall,
notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder, the officers, directors, members, partners, agents,
brokers (including brokers who offer and sell Registrable Securities as
principal as a result of a pledge or any failure to perform under a margin
call of Common Stock), investment advisors and employees (and any other
Persons with a functionally equivalent role of a Person holding such titles,
notwithstanding a lack of such title or any other title) of each of them,
each Person who controls any such Holder (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, members, stockholders, partners, agents and employees (and any
other Persons with a functionally equivalent role of a Person holding such
titles, notwithstanding a lack of such title or any other title) of each such
controlling Person, to the fullest extent permitted by applicable law, from
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and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of or relating to (1) any
untrue or alleged untrue statement of a material fact contained in a
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, (2) any
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein (in the case of any Prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading or (3) any violation or alleged violation by the Company of
the Securities Act, the Exchange Act or any state securities law, or any rule
or regulation thereunder, in connection with the performance of its
obligations under this Agreement, except to the extent, but only to the
extent, that (i) such untrue statements or omissions are based solely upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use in a Registration Statement, such Prospectus or in
any amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose) or (ii) in the case of an
occurrence of an event of the type specified in Section 3(c)(iii)-(vi), the
use by such Holder of an outdated, defective or otherwise unavailable
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated, defective or otherwise unavailable for use by such
Holder and prior to the receipt by such Holder of the Advice contemplated in
Section 6(c). The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding arising from or in
connection with the transactions contemplated by this Agreement of which the
Company is aware.
(b) Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act), and the directors, officers, agents or employees of such controlling
Persons, to the fullest extent permitted by applicable law, from and against
all Losses, as incurred, to the extent arising out of or relating to: (x)
such Holder's failure to comply with the prospectus delivery requirements of
the Securities Act, (y) any untrue or alleged untrue statement of a material
fact contained in any Registration Statement, any Prospectus, or in any
amendment or supplement thereto or in any preliminary prospectus, or (z) any
omission or alleged omission of a material fact required to be stated therein
or necessary to make the statements therein not misleading (i) to the extent,
but only to the extent, that such untrue statement or omission is contained
in any information so furnished in writing by such Holder to the Company
specifically for inclusion in such Registration Statement or such Prospectus
or (ii) in the case of an occurrence of an event of the type specified in
Section 3(c)(iii)-(vi), the use by such Holder of an outdated, defective or
otherwise unavailable Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated, defective or otherwise
unavailable for use by such Holder and prior to the receipt by such Holder of
the Advice contemplated in Section 6(c). A Holder shall notify the Company
promptly of the institution, thread or assertion of any Proceeding arising
from or in connection with the transactions contemplated by this Agreement of
which the Holder is aware. In no event shall the liability of any selling
Holder under this Section 5(b) be greater in amount than the dollar amount of
the net proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall
be brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall have the right to assume the defense thereof,
including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that, the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying
Party of its obligations or liabilities pursuant to this Agreement, except
(and only) to the extent that it shall be finally determined by a court of
competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have prejudiced the Indemnifying
Party.
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An Indemnified Party shall have the right to employ separate counsel in any
such Proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses, (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding, or (3) the
named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and counsel
to the Indemnified Party shall reasonably believe that a material conflict of
interest is likely to exist if the same counsel were to represent such
Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects
to employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
the reasonable fees and expenses of no more than one separate counsel shall
be at the expense of the Indemnifying Party). The Indemnifying Party shall
not be liable for any settlement of any such Proceeding effected without its
written consent, which consent shall not be unreasonably withheld or delayed.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of any pending Proceeding in respect
of which any Indemnified Party is a party, unless such settlement includes an
unconditional release of such Indemnified Party from all liability on claims
that are the subject matter of such Proceeding.
Subject to the terms of this Agreement, all reasonable fees and expenses of
the Indemnified Party (including reasonable fees and expenses to the extent
incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to
the Indemnified Party, as incurred, within ten (10) Trading Days of written
notice thereof to the Indemnifying Party; provided, that, the Indemnified
Party shall promptly reimburse the Indemnifying Party for that portion of
such fees and expenses applicable to such actions for which such Indemnified
Party is judicially determined not to be entitled to indemnification
hereunder.
(d) Contribution. If the indemnification under Section 5(a) or 5(b)
is unavailable to an Indemnified Party or insufficient to hold an Indemnified
Party harmless for any Losses, then each Indemnifying Party shall contribute
to the amount paid or payable by such Indemnified Party, in such proportion
as is appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions
that resulted in such Losses as well as any other relevant equitable
considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact, has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a
result of any Losses shall be deemed to include, subject to the limitations
set forth in this Agreement, any reasonable attorneys' or other fees or
expenses incurred by such party in connection with any Proceeding to the
extent such party would have been indemnified for such fees or expenses if
the indemnification provided for in this Section 5 was available to such
party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) 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 immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Holder
shall be required to contribute pursuant to this Section 5(d), in the
aggregate, any amount in excess of the amount by which the net proceeds
actually received by such Holder from the sale of the Registrable Securities
subject to the Proceeding exceeds the amount of any damages that such Holder
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
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The indemnity and contribution agreements contained in this Section 5 are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
6. Miscellaneous.
(a) Remedies. (i) Additional Dividends Under Certain Circumstances.
Additional dividends (the "Additional Dividends") with respect to the
Preferred Stock shall be assessed if the Registration Statement is not
declared effective by the Commission on or prior to the one (1) year
anniversary of the Closing Date as provided in Section 2(b) hereof (such
event, a "Registration Default"). Additional Dividends shall accrue on the
Preferred Stock over and above the dividend rate set forth in the title of
the Securities from and including the date on which such Registration Default
shall occur to but excluding the date on which such Registration Default has
been cured. The rate of the Additional Dividends will be 1.00% per annum for
the first 30-day period (or pro rata portion thereof) immediately following
the occurrence of a Registration Default, and such rate will increase by an
additional 1.00% per annum with respect to each subsequent 30-day period (or
pro rata portion thereof) until such Registration Default has been cured.
Additional Dividends shall be paid on Dividend Payment Dates. Such Additional
Dividends will be in addition to any other dividends payable from time to
time with respect to the Preferred Stock.
(ii) In the event of a breach by the Company or by a Holder of
any of their respective obligations under this Agreement, each Holder or the
Company, as the case may be, in addition to being entitled to exercise all
rights granted by law and under this Agreement, including recovery of
damages, shall be entitled to specific performance of its rights under this
Agreement. Each of the Company and each Holder agrees that monetary damages
would not provide adequate compensation for any losses incurred by reason of
a breach by it of any of the provisions of this Agreement and hereby further
agrees that, in the event of any action for specific performance in respect
of such breach, it shall not assert or shall waive the defense that a remedy
at law would be adequate.
(b) Compliance. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable
to it in connection with sales of Registrable Securities pursuant to a
Registration Statement.
(c) Discontinued Disposition. By its acquisition of Registrable
Securities, each Holder agrees that, upon receipt of a notice from the
Company of the occurrence of any event of the kind described in Section
3(c)(iii) through (vi), such Holder will forthwith discontinue disposition of
such Registrable Securities under a Registration Statement until it is
advised in writing (the "Advice") by the Company that the use of the
applicable Prospectus (as it may have been supplemented or amended) may be
resumed. The Company will use its best efforts to ensure that the use of the
Prospectus may be resumed as promptly as is practicable. The Company agrees
and acknowledges that any periods during which the Holder is required to
discontinue the disposition of the Registrable Securities hereunder shall be
subject to the provisions of Section 3(b).
(d) Piggy-Back Registrations. If, at any time during the
Effectiveness Period, there is not an effective Registration Statement
covering all of the Registrable Securities and the Company shall determine to
prepare and file with the Commission a registration statement relating to an
offering for its own account or the account of others under the Securities
Act of any of its equity securities, other than on Form S-4 or Form S-8 (each
as promulgated under the Securities Act) or their then equivalents relating
to equity securities to be issued solely in connection with any acquisition
of any entity or business or equity securities issuable in connection with
the Company's stock option or other employee benefit plans, then the Company
shall deliver to each Holder a written notice of such determination and, if
within fifteen days after the date of the delivery of such notice, any such
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Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered; provided, however, that the Company shall
not be required to register any Registrable Securities pursuant to this
Section 6(d) that are eligible for resale pursuant to Rule 144 promulgated by
the Commission pursuant to the Securities Act or that are the subject of a
then effective Registration Statement.
(e) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions
hereof may not be given, unless the same shall be in writing and signed by
the Company and the Holders of at least 85% of the then outstanding
Registrable Securities (including, for this purpose any Registrable
Securities issuable upon exercise or conversion of any Security issued and
issuable under the Purchase Agreement). If a Registration Statement does not
register all of the Registrable Securities pursuant to a waiver or amendment
done in compliance with the previous sentence, then the number of Registrable
Securities to be registered for each Holder shall be reduced pro rata among
all Holders and each Holder shall have the right to designate which of its
Registrable Securities shall be omitted from such Registration Statement.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of a Holder or some Holders and that does not directly or indirectly
affect the rights of other Holders may be given by such Holder or Holders of
all of the Registrable Securities to which such waiver or consent relates;
provided, however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
first sentence of this Section 6(e).
(f) Notices. Any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be delivered
as set forth in the Purchase Agreement.
(g) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder. The Company
may not assign (except by merger) its rights or obligations hereunder without
the prior written consent of all of the Holders of the then outstanding
Registrable Securities. Each Holder may assign their respective rights
hereunder in the manner and to the Persons as permitted under Section 5.6 of
the Purchase Agreement.
(h) No Inconsistent Agreements. 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 Holders in this Agreement or otherwise
conflicts with the provisions hereof. Neither the Company nor any of its
Subsidiaries has previously entered into any agreement granting any
registration rights with respect to any of its securities to any Person that
have not been satisfied in full.
(i) Execution and Counterparts. This Agreement may be executed in
two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party,
it being understood that both parties need not sign the same counterpart. In
the event that any signature is delivered by facsimile transmission or by e-
mail delivery of a ".pdf" format data file, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile or
".pdf" signature page were an original thereof.
(j) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be
determined in accordance with the provisions of the Purchase Agreement.
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(k) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any other remedies provided by law.
(l) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their commercially reasonable efforts to find and
employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction.
It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for convenience
only, do not constitute a part of the Agreement and shall not be deemed to
limit or affect any of the provisions hereof.
(n) Independent Nature of Holders' Obligations and Rights. The
obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder hereunder, and no Holder shall be responsible
in any way for the performance of the obligations of any other Holder
hereunder. Nothing contained herein or in any other agreement or document
delivered at any closing, and no action taken by any Holder pursuant hereto
or thereto, shall be deemed to constitute the Holders as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Holders are in any way acting in concert with respect to
such obligations or the transactions contemplated by this Agreement. Each
Holder shall be entitled to protect and enforce its rights, including without
limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Holder to be joined as an additional party in any
proceeding for such purpose.
********************
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IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
▇▇▇▇▇▇▇▇ MINING, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
Title: President and Chief
Executive Officer
[SIGNATURE PAGES OF HOLDERS FOLLOW
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[SIGNATURE PAGES OF HOLDERS TO RRA]
Name of Holder: Portsmouth Square, Inc.
--------------------------
Signature of Authorized Signatory of Holder: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
Name of Authorized Signatory: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------
Title of Authorized Signatory: Chairman & President
--------------------
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