REGISTRATION RIGHTS AGREEMENT
EXHIBIT
10.2
THIS
REGISTRATION RIGHTS AGREEMENT
(this
“Agreement”) is entered into as of the ____ day of_________, 200_, by
and among GPS Industries, Inc., a Nevada corporation (the “Company”), and the
persons set forth on the signature pages hereto (“Investors”).
WHEREAS,
concurrently with the execution of this Agreement, the Investors are acquiring
an aggregate of (i) 1,874,089 shares (the “Preferred Shares”) of the Company’s
Series B Convertible Preferred Stock, which are initially convertible into
307,227,738 shares of the Company’s Common Stock as adjusted pursuant to the
terms of the Certificate of Designations for the Preferred Shares (the
“Conversion Shares”), (ii) 12,295,082 shares of Common Stock, and (iii) warrants
(the “Warrants”) to purchase up to 75,254,038 shares (the “Warrant Shares”) of
the Company’s common stock (subject to adjustment pursuant to the terms of the
Warrants);
WHEREAS,
certain of the Investors may also purchase Additional Securities (as such term
is defined under Article I.C of the Securities Purchase Agreement, entered
into
by the Company and the signatories thereto as of the date hereof) pursuant
to
the Securities Purchase Agreement;
WHEREAS,
the
Investors and the Company desire to enter into this Agreement to provide the
Investors with certain rights relating to the registration of the Company’s
securities held by them;
NOW,
THEREFORE,
in
consideration of the mutual covenants and agreements set forth herein, and
for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS.
The
following capitalized terms used herein have the following
meanings:
“AGREEMENT”
means this Agreement, as amended, restated, supplemented, or otherwise modified
from time to time.
“COMMISSION”
means the Securities and Exchange Commission, or any other federal agency then
administering the Securities Act or the Exchange Act.
“COMMON
STOCK” means the common stock, of the Company.
“COMPANY”
is defined in the preamble to this Agreement.
“CONVERSION
SHARES” is defined in the preamble to this Agreement.
“DEMAND
REGISTRATION” is defined in Section 2.1.1.
“DEMANDING
HOLDER” is defined in Section 2.1.1.
“EXCHANGE
ACT” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder, all as the same shall
be
in effect at the time.
“FORM S-3”
is defined in Section 2.3.
“INDEMNIFIED
PARTY” is defined in Section 4.3.
“INDEMNIFYING
PARTY” is defined in Section 4.3.
“INVESTOR”
is defined in the preamble to this Agreement.
“INVESTOR
INDEMNIFIED PARTY” is defined in Section 4.1.
“MAXIMUM
NUMBER OF SHARES” is defined in Section 2.1.4.
“NOTICES”
is defined in Section 6.2.
“PIGGYBACK
REGISTRATION” is defined in Section 2.2.1.
“PREFERRED
SHARES” is defined in the preamble to this Agreement.
“REGISTER,”
“REGISTERED” and “REGISTRATION” mean a registration affected by preparing and
filing a registration statement or similar document in compliance with the
requirements of the Securities Act, and the applicable rules and regulations
promulgated thereunder, and such registration statement becoming
effective.
“REGISTRABLE
SECURITIES” mean all of (i) the Conversion Shares, (ii) Warrant Shares, (iii)
any Additional Securities (as such term is defined under Article I. C. of the
Securities Purchase Agreement) that may be acquired by the Investors or their
assignees, and (iv) the 12,295,082 shares of Common Stock acquired by Xxxxxx
X.
Xxxxxx, Xx. concurrently with the execution of this Agreement. Registrable
Securities shall also include any warrants, shares of capital stock or other
securities of the Company issued as a dividend or other distribution with
respect to or in exchange for or in replacement of such shares of Common Stock.
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; or (c) such securities shall have ceased to be
outstanding.
“REGISTRATION
STATEMENT” means a registration statement filed by the Company with the
Commission in compliance with the Securities Act and the rules and regulations
promulgated thereunder for a public offering and sale of Common Stock (other
than a registration statement on Form S-8, or its successors, or such other
form which does not include substantially the same information as would be
required in a form for the general registration of securities or would not
be
available for the Registrable Securities).
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“SECURITIES
ACT” means the Securities Act of 1933, as amended, and the rules and regulations
of the Commission promulgated thereunder, all as the same shall be in effect
at
the time.
“UNDERWRITER”
means a securities dealer who purchases any Registrable Securities as principal
in an underwritten offering and not as part of such dealer’s market-making
activities.
"WARRANTS”
is defined in the preamble to this Agreement.
“WARRANT
SHARES” is defined in the preamble to this Agreement
2. REGISTRATION
RIGHTS.
2.1.
DEMAND
REGISTRATION.
2.1.1.
REQUEST
FOR REGISTRATION.
Subject
to and in accordance with this Agreement, at any time and from time to time
on
or after the date hereof, the Investors or the transferees of Investors shall
have the unlimited right to demand the registration under the Securities Act
of
all or part of their Registrable Securities (a “DEMAND REGISTRATION”), provided
no demand shall be made for less than 10 million Registrable Securities (as
adjusted to equitably reflect any stock splits, stock dividends, or any
combinations or reclassification of the Common Stock or similar transactions).
Any demand for a Demand Registration shall be in writing and shall specify
the
number of shares of Registrable Securities proposed to be sold and the intended
method(s) of distribution thereof. The Company will notify all other holders
of
Registrable Securities of the demand, and each holder of Registrable Securities
who wishes to include all or a portion of such holder’s Registrable Securities
in the Demand Registration (each such holder including shares of Registrable
Securities in such registration, a “DEMANDING HOLDER”) shall so notify the
Company in writing within twenty (20) days after the receipt by the holder
of
the notice from the Company. Upon any such request, the Demanding Holders shall
be entitled to have their Registrable Securities included in the Demand
Registration, subject to Section 2.1.3 and the provisos set forth in
Section 3.1.1.
2.1.2.
UNDERWRITTEN
OFFERING.
If a
majority-in-interest of the Demanding Holders so elect and such holders so
advise the Company as part of their written demand for a Demand Registration,
the offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of an underwritten offering. In such event, the right
of
any holder to include its Registrable Securities in such registration shall
be
conditioned upon such holder’s participation in such underwriting and the
inclusion of such holder’s Registrable Securities in the underwriting to the
extent provided herein. All Demanding Holders proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with the Underwriter or Underwriters selected for such
underwriting by a majority-in-interest of the holders initiating the Demand
Registration.
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2.1.3.
REDUCTION
OF OFFERING.
If the
managing Underwriter or Underwriters for a Demand Registration that is to be
an
underwritten offering advises the Company and the Demanding Holders in good
faith in writing that the dollar amount or number of shares of Registrable
Securities which the Demanding Holders desire to sell, taken together with
all
other shares of Common Stock or other securities which the Company desires
to
sell and the shares of Common Stock, if any, as to which registration has been
requested pursuant to written contractual piggy-back registration rights held
by
other shareholders of the Company who desire to sell, exceeds the maximum dollar
amount or maximum number of shares that can be sold in such offering without
adversely affecting the proposed offering price, the timing, the distribution
method, or the probability of success of such offering (such maximum dollar
amount or maximum number of shares, as applicable, the “MAXIMUM NUMBER OF
SHARES”), then the Company shall include in such registration: (i) first,
the Registrable Securities as to which Demand Registration has been requested
by
the Demanding Holders (pro rata in accordance with the number of shares of
Registrable Securities which such Demanding Holders have requested be included
in such registration, regardless of the number of shares held by such Demanding
Holders) that can be sold without exceeding the Maximum Number of Shares;
(ii) second, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clause (i), the shares of Common Stock or other
securities that the Company desires to sell that can be sold without exceeding
the Maximum Number of Shares; (iii) third, to the extent that the Maximum
Number of Shares has not been reached under the foregoing clauses (i) and
(ii), the shares of Common Stock for the account of other persons that the
Company is obligated to register pursuant to written contractual arrangements
with such persons and that can be sold without exceeding the Maximum Number of
Shares; and (iv) fourth, to the extent that the Maximum Number of Shares
have not been reached under the foregoing clauses (i), (ii) and (iii), the
shares of Common Stock that other shareholders desire to sell that can be sold
without exceeding the Maximum Number of Shares to the extent that the Company,
in its sole discretion, wishes to permit such sales pursuant to this
clause (iv).
2.1.4.
WITHDRAWAL.
If a
majority-in-interest of the Demanding Holders disapprove of the terms of any
underwriting or are not entitled to include all of their Registrable Securities
in any offering, such majority-in-interest of the Demanding Holders may elect
to
withdraw from such offering by giving written notice to the Company and the
Underwriter or Underwriters of their request to withdraw prior to the
effectiveness of the Registration Statement filed with the Commission with
respect to such Demand Registration.
2.2.
PIGGY-BACK
REGISTRATION.
2.2.1.
PIGGYBACK
RIGHTS.
If at
any time on or after the date hereof the Company proposes to file a Registration
Statement under the Securities Act with respect to an offering of equity
securities, or securities or other obligations exercisable or exchangeable
for,
or convertible into, equity securities, by the Company for its own account
or
for shareholders of the Company for their account (or by the Company and by
shareholders of the Company including, without limitation, pursuant to
Section 2.1), then the Company shall (x) give written notice of such
proposed filing to the holders of Registrable Securities as soon as practicable
but in no event less than twenty (20) days before the anticipated filing
date, which notice shall describe the amount and type of securities to be
included in such offering, the intended method(s) of distribution, and the
name
of the proposed managing Underwriter or Underwriters, if any, of the offering,
and (y) offer to the holders of Registrable Securities in such notice the
opportunity to register the sale of such number of shares of Registrable
Securities as such holders may request in writing within ten (10) days
following receipt of such notice (a “PIGGY-BACK REGISTRATION”). The Company
shall cause such Registrable Securities to be included in such registration
and
shall use commercially reasonable efforts to cause the managing Underwriter
or
Underwriters of a proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggy-Back Registration to be included
on the same terms and conditions as any similar securities of the Company and
to
permit the sale or other disposition of such Registrable Securities in
accordance with the intended method(s) of distribution thereof. All holders
of
Registrable Securities proposing to distribute their securities through a
Piggy-Back Registration that involves an Underwriter or Underwriters shall
enter
into an underwriting agreement in customary form with the Underwriter or
Underwriters selected for such Piggy-Back Registration.
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2.2.2.
REDUCTION
OF OFFERING.
If the
managing Underwriter or Underwriters for a Piggy-Back Registration that is
to be
an underwritten offering advises the Company and the holders of Registrable
Securities in good faith in writing that the dollar amount or number of shares
of Common Stock which the Company desires to sell, taken together with shares
of
Common Stock, if any, as to which registration has been demanded pursuant to
written contractual arrangements with persons other than the holders of
Registrable Securities hereunder, the Registrable Securities as to which
registration has been requested under this Section 2.2, and the shares of
Common Stock, if any, as to which registration has been requested pursuant
to
the written contractual piggy-back registration rights of other shareholders
of
the Company, exceeds the Maximum Number of Shares, then the Company shall
include in any such registration:
(i) If
the
registration is undertaken for the Company’s account: (A) first, the shares
of Common Stock or other securities that the Company desires to sell that can
be
sold without exceeding the Maximum Number of Shares; (B) second, to the
extent that the Maximum Number of Shares has not been reached under the
foregoing clause (A), the Registrable Securities as to which registration
has been requested under this Section 2.2 (pro rata in accordance with the
number of shares of Registrable Securities and securities each holder has
actually requested to be included in such registration, regardless of the number
of shares of Common Stock with respect to which such persons have the right
to
request such inclusion) that can be sold without exceeding the Maximum Number
of
Shares; and (c) to the extent that the Maximum Number of Shares has not
been reached under the foregoing clauses (A) and (B), the shares of Common
Stock as to which registration has been requested pursuant to written
contractual piggy-back registration rights of other security holders (pro rata
in accordance with the number of shares such person has actually requested
to be
included in such registration, regardless of the number of shares of Common
Stock with respect such person has the right to request inclusion).
(ii) If
the
registration is a “demand” registration undertaken at the demand of persons
other than the holders of Registrable Securities pursuant to written contractual
arrangements with such persons, (A) first, the shares of Common Stock for
the account of the demanding persons that can be sold without exceeding the
Maximum Number of Shares; (B) second, to the extent that the Maximum Number
of Shares has not been reached under the foregoing clause (A), the shares
of Common Stock or other securities that the Company desires to sell that can
be
sold without exceeding the Maximum Number of Shares; and (C) third, to the
extent that the Maximum Number of Shares has not been reached under the
foregoing clauses (A) and (B), the Registrable Securities as to which
registration has been requested under this Section 2.2 (pro rata in
accordance with the number of shares such person has actually requested to
be
included in such registration, regardless of the number of shares of Common
Stock with respect such person has the right to request inclusion); and
(D) fourth, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clauses (A), (B) and (C), the shares of Common
Stock, if any, as to which registration has been requested pursuant to written
contractual piggy-back registration rights which other shareholders desire
to
sell that can be sold without exceeding the Maximum Number of
Shares.
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2.2.3.
WITHDRAWAL.
Any
holder of Registrable Securities may elect to withdraw such holder’s request for
inclusion of Registrable Securities in any Piggy-Back Registration by giving
written notice to the Company of such request to withdraw prior to the
effectiveness of the Registration Statement. The Company may also elect to
withdraw a registration statement at any time prior to the effectiveness of
the
Registration Statement without thereby incurring any liability to the holders
of
Registrable Securities. Notwithstanding any such withdrawal, the Company shall
pay all expenses incurred by the holders of Registrable Securities in connection
with such Piggy-Back Registration as provided in Section 3.3.
2.3.
REGISTRATIONS
ON FORM S-3.
The
holders of Registrable Securities may at any time and from time to time, request
in writing that the Company register the resale of any or all of such
Registrable Securities on Form S-3 or any similar short-form registration
which may be available at such time (“FORM S-3”); PROVIDED, HOWEVER, that
the Company shall not be obligated to effect such request through an
underwritten offering. Upon receipt of such written request, the Company will
promptly give written notice of the proposed registration to all other holders
of Registrable Securities, and, as soon as practicable thereafter, effect the
registration of all or such portion of such holder’s or holders’ Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any other holder or holders joining in such
request as are specified in a written request given within twenty (20) days
after receipt of such written notice from the Company; PROVIDED, HOWEVER, that
the Company shall not be obligated to effect any such registration pursuant
to
this Section 2.3: (i) if Form S-3 is not available for such
offering; or (ii) if the holders of the Registrable Securities, together
with the holders of any other securities of the Company entitled to inclusion
in
such registration, propose to sell Registrable Securities and such other
securities (if any) at an aggregate price to the public of less than $250,000.
Registrations effected pursuant to this Section 2.3 shall not be counted as
Demand Registrations effected pursuant to Section 2.1.
3. REGISTRATION
PROCEDURES.
3.1.
FILINGS;
INFORMATION.
Whenever the Company is required to effect the registration of any Registrable
Securities pursuant to Section 2, the Company shall use its best efforts to
effect the registration and sale of such Registrable Securities in accordance
with the intended method(s) of distribution thereof as expeditiously as
practicable, and in connection with any such request:
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3.1.1.
FILING
REGISTRATION STATEMENT.
The
Company shall, as expeditiously as possible and in any event within
seventy-five (75) days after receipt of a request for a Demand Registration
pursuant to Section 2.1 or an S-3 registration pursuant to Section 2.3,
prepare and file with the Commission a Registration Statement on any form for
which the Company then qualifies or which counsel for the Company shall deem
appropriate and which form shall be available for the sale of all Registrable
Securities to be registered thereunder in accordance with the intended method(s)
of distribution thereof, and shall use its best efforts to cause such
Registration Statement to become and remain effective for the period required
by
Section 3.1.3; PROVIDED, HOWEVER, that the Company shall have the right to
defer any Demand Registration for up to sixty (60) days, and any Piggy-Back
Registration for such period as may be applicable to deferment of any demand
registration to which such Piggy-Back Registration relates, in each case if
the
Company shall furnish to the holders a certificate signed by the Chief Executive
Officer of the Company stating that, in the good faith judgment of the Board
of
Directors of the Company, it would be materially detrimental to the Company
and
its shareholders for such Registration Statement to be effected at such time;
PROVIDED FURTHER, HOWEVER, that the Company shall not have the right to exercise
the right set forth in the immediately preceding proviso more than once in
any
365-day period in respect of a Demand Registration hereunder.
3.1.2.
COPIES.
The
Company shall, prior to filing a Registration Statement or prospectus, or any
amendment or supplement thereto, furnish without charge to the holders of
Registrable Securities included in such registration, and such holders’ legal
counsel, copies of such Registration Statement as proposed to be filed, each
amendment and supplement to such Registration Statement (in each case including
all exhibits thereto and documents incorporated by reference therein), the
prospectus included in such Registration Statement (including each preliminary
prospectus), and such other documents as the holders of Registrable Securities
included in such registration or legal counsel for any such holders may request
in order to facilitate the disposition of the Registrable Securities owned
by
such holders.
3.1.3.
AMENDMENTS
AND SUPPLEMENTS.
The
Company shall prepare and file with the Commission as expeditiously as possible
such amendments, including post-effective amendments, and supplements to such
Registration Statement and the prospectus used in connection therewith as may
be
necessary to keep such Registration Statement effective and in compliance with
the provisions of the Securities Act until all Registrable Securities and other
securities covered by such Registration Statement have been disposed of in
accordance with the intended method(s) of distribution set forth in such
Registration Statement, such securities have been withdrawn, or such securities
may be sold without volume restrictions pursuant to Rule 144(k).
7
3.1.4.
NOTIFICATION.
After
the filing of a Registration Statement, the Company shall promptly, and in
no
event more than two (2) business days after such filing, notify the holders
of Registrable Securities included in such Registration Statement of such
filing, and shall further notify such holders promptly and confirm such advice
in writing in all events within two (2) business days of the occurrence of
any of the following: (i) when such Registration Statement becomes
effective; (ii) when any post-effective amendment to such Registration
Statement becomes effective; (iii) the issuance or threatened issuance by
the Commission of any stop order (and the Company shall take all actions
required to prevent the entry of such stop order or to remove it if entered);
and (iv) any request by the Commission for any amendment or supplement to
such Registration Statement or any prospectus relating thereto or for additional
information or of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter delivered
to
the purchasers of the securities covered by such Registration Statement, such
prospectus will not contain an 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 not misleading, and promptly make available to the holders
of
Registrable Securities included in such Registration Statement any such
supplement or amendment; except that before filing with the Commission a
Registration Statement or prospectus or any amendment or supplement thereto,
including documents incorporated by reference, the Company shall furnish to
the
holders of Registrable Securities included in such Registration Statement and
to
the legal counsel for any such holders, copies of all such documents proposed
to
be filed sufficiently in advance of filing to provide such holders and legal
counsel with a reasonable opportunity to review such documents and comment
thereon, and the Company shall not file any Registration Statement or prospectus
or amendment or supplement thereto, including documents incorporated by
reference, to which such holders or their legal counsel shall
object.
3.1.5.
STATE
SECURITIES LAWS COMPLIANCE.
The
Company shall use commercially reasonable efforts to (i) register or
qualify the Registrable Securities covered by the Registration Statement under
such securities or “blue sky” laws of such jurisdictions in the United States as
the holders of Registrable Securities included in such Registration Statement
(in light of their intended plan of distribution) may request and (ii) take
such action necessary to cause such Registrable Securities covered by the
Registration Statement to be registered with or approved by such other
Governmental Authorities as may be necessary by virtue of the business and
operations of the Company and do any and all other acts and things that may
be
necessary or advisable to enable the holders of Registrable Securities included
in such Registration Statement to consummate the disposition of such Registrable
Securities in such jurisdictions; PROVIDED, HOWEVER, that the Company shall
not
be required to qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this Section 3.1.5 or
subject itself to taxation in any such jurisdiction.
3.1.6.
AGREEMENTS
FOR DISPOSITION.
The
Company shall enter into customary agreements (including, if applicable, an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities. The representations, warranties and covenants of the
Company in any underwriting agreement which are made to or for the benefit
of
any Underwriters, to the extent applicable, shall also be made to and for the
benefit of the holders of Registrable Securities included in such registration
statement. No holder of Registrable Securities included in such registration
statement shall be required to make any representations or warranties in the
underwriting agreement except, if applicable, with respect to such holder’s
organization, good standing, authority, title to Registrable Securities, lack
of
conflict of such sale with such holder’s material agreements and organizational
documents, and with respect to written information relating to such holder
that
such holder has furnished in writing expressly for inclusion in such
Registration Statement.
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3.1.7.
COOPERATION.
The
principal executive officer of the Company, the principal financial officer
of
the Company, the principal accounting officer of the Company and all other
officers and members of the management of the Company shall cooperate fully
in
any offering of Registrable Securities hereunder, which cooperation shall
include, without limitation, the preparation of the Registration Statement
with
respect to such offering and all other offering materials and related documents,
and participation in meetings with Underwriters, attorneys, accountants and
potential investors.
3.1.8.
RECORDS.
The
Company shall make available for inspection by the holders of Registrable
Securities included in such Registration Statement, any Underwriter
participating in any disposition pursuant to such registration statement and
any
attorney, accountant or other professional retained by any holder of Registrable
Securities included in such Registration Statement or any Underwriter, all
financial and other records, pertinent corporate documents and properties of
the
Company, as shall be necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors and employees to
supply all information requested by any of them in connection with such
Registration Statement.
3.1.9.
OPINIONS
AND COMFORT LETTERS.
The
Company shall furnish, at the request of any holder requesting registration
of
Registrable Securities pursuant tot his Agreement, on the date that such
Registrable Securities are delivered to the underwriters for sale in connection
with a registration pursuant to this Agreement, if such securities are being
sold through underwriters, or, if securities are not being sold through
underwriters, on the date that the Registration Statement with respect to such
securities becomes effective, (i) an opinion, dated such date, of the counsel
representing the Company for the purposes of such registration, in form and
substance as is customarily given to the underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the holders requesting
registration of Registrable Securities and (ii) a letter dated such date, from
the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants
to
underwriters in an underwritten public offering, addressed to the underwriters,
if any, and to the holders requesting registration of Registrable
Securities.
3.1.10.
COMPLIANCE
WITH LAWS; EARNINGS STATEMENT.
The
Company shall comply with all applicable rules and regulations of the SEC and
Make generally available to its securityholders earning statements satisfying
the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder
(or any similar rule promulgated under the Securities Act) no later than 45
days
after the end of any twelve month period (or 90 days after the end of any twelve
month period is a fiscal year) (i) commencing a the end of any fiscal quarter
in
which Registrable Securities are sold to underwriters in a firm commitment
or
best efforts underwritten offering, and (ii) if not sold to underwriters in
such
an offering, commencing on the first day of the first fiscal quarter of the
Company, after the effective date of the Registration Statement, which statement
shall cover said 12-month period.
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3.1.11.
LISTING.
The
Company shall cause all Registrable Securities included in any registration
to
be listed on such exchanges or otherwise designated for trading in the same
manner as similar securities issued by the Company are then listed or designated
or, if no such similar securities are then listed or designated, in a manner
satisfactory to the holders of a majority of the Registrable Securities included
in such registration.
3.2.
OBLIGATION
TO SUSPEND DISTRIBUTION.
Upon
receipt of any notice from the Company of the happening of any event of the
kind
described in Section 3.1.4(iv), each holder of Registrable Securities
included in any registration shall immediately discontinue disposition of such
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such holder receives the supplemented or amended
prospectus contemplated by Section 3.1.4(iv), and, if so directed by the
Company, each such holder will deliver to the Company all copies, other than
permanent file copies then in such holder’s possession, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice.
3.3.
REGISTRATION
EXPENSES.
The
Company shall bear all costs and expenses incurred in connection with any Demand
Registration pursuant to Section 2.1, any Piggy-Back Registration pursuant
to Section 2.2, and any registration on Form S-3 effected pursuant to
Section 2.3, and all expenses incurred in performing or complying with its
other obligations under this Agreement, whether or not the Registration
Statement becomes effective, including, without limitation: (i) all
registration and filing fees; (ii) fees and expenses of compliance with
securities or “blue sky” laws (including fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities);
(iii) printing expenses; (iv) the Company’s internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees); (v) the fees and expenses incurred in connection with the
listing of the Registrable Securities as required by Section 3.1.11;
(vi) National Association of Securities Dealers, Inc. fees; (vii) fees
and disbursements of counsel for the Company and fees and expenses for
independent certified public accountants retained by the Company (including
the
expenses or costs associated with the delivery of any opinions or comfort
letters requested pursuant to Section 3.1.9); (viii) the fees and
expenses of any special experts retained by the Company in connection with
such
registration and (ix) the fees and expenses of one legal counsel selected
by the holders of a majority-in-interest of the Registrable Securities included
in such registration. The Company shall have no obligation to pay any
underwriting discounts or selling commissions attributable to the Registrable
Securities being sold by the holders thereof, which underwriting discounts
or
selling commissions shall be borne by such holders.
3.4.
INFORMATION.
The
holders of Registrable Securities shall provide such information as may
reasonably be requested by the Company, or the managing Underwriter, if any,
in
connection with the preparation of any Registration Statement, including
amendments and supplements thereto, in order to effect the registration of
any
Registrable Securities under the Securities Act pursuant to Section 2 and
in connection with the Company’s obligation to comply with federal and
applicable state securities laws.
10
4. INDEMNIFICATION
AND CONTRIBUTION.
4.1.
INDEMNIFICATION
BY THE COMPANY.
The
Company shall indemnify and hold harmless each Investor and each other holder
of
Registrable Securities, and each of their respective officers, employees,
affiliates, directors, partners, members, attorneys and agents, and each person,
if any, who controls an Investor and each other holder of Registrable Securities
(within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) (each, an “INVESTOR INDEMNIFIED PARTY”), from and against
any expenses, losses, judgments, claims, damages or liabilities, whether joint
or several, arising out of or based upon any untrue statement (or allegedly
untrue statement) of a material fact contained in any Registration Statement
under which the sale of such Registrable Securities was registered under the
Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained in the Registration Statement, or any amendment or
supplement thereto, or arising out of or based upon any omission (or alleged
omission) to state a material fact required to be stated therein or necessary
to
make the statements therein not misleading, or any violation or alleged
violation by the Company of the Securities Act, the Exchange Act or the
violation by the Company of any or any rule, law or regulation (including state
securities laws) relating to the offer and sale of Registrable Securities;
and
the Company shall promptly reimburse the Investor Indemnified Party (as such
expenses are incurred) for any legal and any other expenses reasonably incurred
by such Investor Indemnified Party in connection with investigating and
defending any such expense, loss, judgment, claim, damage, liability or action;
PROVIDED, HOWEVER, that the Company will not be liable in any such case to
the
extent that any such expense, loss, claim, damage or liability arises out of
or
is based upon any untrue statement or allegedly untrue statement or omission
or
alleged omission made in such Registration Statement, preliminary prospectus,
final prospectus, or summary prospectus, or any such amendment or supplement,
in
reliance upon and in conformity with information furnished to the Company,
in
writing, by such selling holder expressly for use therein.
4.2.
INDEMNIFICATION
BY HOLDERS OF REGISTRABLE SECURITIES.
Each
selling holder of Registrable Securities will, in the event that any
registration is being effected under the Securities Act pursuant to this
Agreement of any Registrable Securities held by such selling holder, indemnify
and hold harmless the Company, each of its directors and officers and each
underwriter (if any), and each other person, if any, who controls the Company
or
such underwriter within the meaning of the Securities Act, against any losses,
claims, judgments, damages or liabilities, whether joint or several, insofar
as
such losses, claims, judgments, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or allegedly untrue
statement of a material fact contained in any Registration Statement under
which
the sale of such Registrable Securities was registered under the Securities
Act,
any preliminary prospectus, final prospectus or summary prospectus contained
in
the Registration Statement, or any amendment or supplement thereto, or arise
out
of or are based upon any omission or the alleged omission to state a material
fact required to be stated therein or necessary to make the statement therein
not misleading, if the statement or omission was made in reliance upon and
in
conformity with information furnished in writing to the Company by such selling
holder expressly for use therein, and shall reimburse the Company, its directors
and officers, and each such controlling person for any legal or other expenses
reasonably incurred by any of them in connection with investigation or defending
any such loss, claim, damage, liability or action. Each selling holder’s
indemnification obligations hereunder shall be several and not joint and shall
be limited to the amount of any net proceeds (after payment of any underwriting
fees, discounts, commissions or taxes) actually received by such selling
holder.
11
4.3.
CONDUCT
OF INDEMNIFICATION PROCEEDINGS.
Promptly after receipt by any person of any notice of any loss, claim, damage
or
liability or any action in respect of which indemnity may be sought pursuant
to
Section 4.1 or 4.2, such person (the “INDEMNIFIED PARTY”) shall, if a claim
in respect thereof is to be made against any other person for indemnification
hereunder, notify such other person (the “INDEMNIFYING PARTY”) in writing of the
loss, claim, judgment, damage, liability or action; PROVIDED, HOWEVER, that
the
failure by the Indemnified Party to notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability which the Indemnifying Party
may have to such Indemnified Party hereunder, except and solely to the extent
the Indemnifying Party is actually prejudiced by such failure. If the
Indemnified Party is seeking indemnification with respect to any claim or action
brought against the Indemnified Party, then the Indemnifying Party shall be
entitled to participate in such claim or action, and, to the extent that it
wishes, jointly with all other Indemnifying Parties, to assume control of the
defense thereof with counsel reasonably satisfactory to the Indemnified Party.
After notice from the Indemnifying Party to the Indemnified Party of its
election to assume control of the defense of such claim or action, the
Indemnifying Party shall not be liable to the Indemnified Party for any legal
or
other expenses subsequently incurred by the Indemnified Party in connection
with
the defense thereof other than reasonable costs of investigation; PROVIDED,
HOWEVER, that in any action in which both the Indemnified Party and the
Indemnifying Party are named as defendants, the Indemnified Party shall have
the
right to employ separate counsel (but no more than one such separate counsel)
to
represent the Indemnified Party and its controlling persons who may be subject
to liability arising out of any claim in respect of which indemnity may be
sought by the Indemnified Party against the Indemnifying Party, with the fees
and expenses of such counsel to be paid by such Indemnifying Party if counsel
of
such Indemnified Party reasonably believes that a material conflict of interest
is likely to exist if the same counsel were to represent such Indemnified Party
and the Indemnifying Party. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld, consent to entry of judgment or effect any settlement
of
any claim or pending or threatened proceeding in respect of which the
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such judgment or settlement
includes an unconditional release of such Indemnified Party from all liability
arising out of such claim or proceeding.
4.4.
CONTRIBUTION.
4.4.1.
If
the
indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3 is
unavailable to any Indemnified Party in respect of any loss, claim, damage,
liability or action referred to herein, then each such Indemnifying Party,
in
lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid
or payable by such Indemnified Party as a result of such loss, claim, damage,
liability or action in such proportion as is appropriate to reflect the relative
fault of the Indemnified Parties and the Indemnifying Parties in connection
with
the actions or omissions which resulted in such loss, claim, damage, liability
or action, as well as any other relevant equitable considerations. The relative
fault of any Indemnified Party and any Indemnifying Party shall be determined
by
reference to, among other things, 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 such Indemnified Party or such Indemnifying
Party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
12
4.4.2.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.4 were determined by PRO RATA allocation or by
any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding Section.
4.4.3.
The
amount paid or payable by an Indemnified Party as a result of any loss, claim,
damage, liability or action referred to in the immediately preceding paragraph
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 4.4, no holder of Registrable Securities shall
be required to contribute any amount in excess of the dollar amount of the
net
proceeds (after payment of any underwriting fees, discounts, commissions or
taxes) actually received by such holder from the sale of Registrable Securities
which gave rise to such contribution obligation. 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 also guilty
of such fraudulent misrepresentation.
5. REPORTS
UNDER THE EXCHANGE ACT.
With
a
view to making available to the holders of Registrable Securities the benefits
of Rule 144 promulgated under the Securities Act and any other rule or
regulation of the SEC that may at any time permit a holder of Registrable
Securities to sell securities of the Company to the public without registration
on Form S-3, the Company agrees to:
5.1.1.
make
and
keep public information available, as those terms are understood and defined
in
SEC Rule 144;
5.1.2.
file
with
the SEC in a timely manner all reports and other documents required to the
Company under the Securities Act and the Exchange Act; and
5.1.3.
furnish
to any Holder, so long as the Holder owns any Registrable Securities, forthwith
upon request (i) a written statement by the Company that it has complied with
the reporting requirements of SEC Rule144, the Securities Act and the Exchange
Act, or that it qualifies as a registrant whose securities may be resold
pursuant to Form S-3 (if it so qualifies), (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
in availing any Holder of any rule or regulation of the SEC which permits the
selling of any securities without registration or pursuant to such
form.
13
6. MISCELLANEOUS.
6.1.
ASSIGNMENT;
NO THIRD PARTY BENEFICIARIES.
This
Agreement and the rights, duties and obligations of the Company hereunder may
not be assigned or delegated by the Company in whole or in part. This Agreement
and the rights, duties and obligations of the holders of Registrable Securities
hereunder may be freely assigned or delegated by such holder of Registrable
Securities in conjunction with and to the extent of any transfer of Registrable
Securities, or any portion thereof, by any such holder. This Agreement and
the
provisions hereof shall be binding upon and shall inure to the benefit of each
of the parties and their respective successors and the permitted assigns of
the
Investor or holder of Registrable Securities or of any assignee of the Investor
or holder of Registrable Securities. This Agreement is not intended to confer
any rights or benefits on any persons that are not party hereto other than
as
expressly set forth in Article 4 and this Section 6.1.
6.2.
NOTICES.
All
notices, demands, requests, consents, approvals or other communications
(collectively, “NOTICES”) required or permitted to be given hereunder or which
are given with respect to this Agreement shall be in writing and shall be
personally served, delivered by reputable air courier service with charges
prepaid, or transmitted by hand delivery, telegram, telex or facsimile,
addressed as set forth below, or to such other address as such party shall
have
specified most recently by written notice. Notice shall be deemed given on
the
date of service or transmission if personally served or transmitted by telegram,
telex or facsimile; PROVIDED, that if such service or transmission is not on
a
business day or is after normal business hours, then such notice shall be deemed
given on the next business day. Notice otherwise sent as provided herein shall
be deemed given on the next business day following timely delivery of such
notice to a reputable air courier service with an order for next-day
delivery.
To
the Company:
0000
000xx
Xx.,
Xxxxx 000
Xxxxxx,
Xxxxxxx Xxxxxxxx
Xxxxxx
v35 559
Attention:
Xxxxxx X. Xxxxxx, Xx.
Telecopy:
604-576-7460
with
a
copy to:
Xxxx
& Xxxxx Professional Corporation
0000
Xxxxxxx Xxxx Xxxx, 00xx
Xxxxx
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention:
Xxxxx X. Xxxxxxxx, Esq.
Telecopy:
000-000-0000
To
Investor:
At
the
addresses set forth on the signature page hereto
14
6.3.
SEVERABILITY.
This
Agreement shall be deemed severable, and the invalidity or unenforceability
of
any term or provision hereof shall not affect the validity or enforceability
of
this Agreement or of any other term or provision hereof. Furthermore, in lieu
of
any such invalid or unenforceable term or provision, the parties hereto intend
that there shall be added as a part of this Agreement a provision as similar
in
terms to such invalid or unenforceable provision as may be possible and be
valid
and enforceable.
6.4.
COUNTERPARTS.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, and all of which taken together shall constitute one and
the
same instrument.
6.5.
ENTIRE
AGREEMENT.
This
Agreement (including all agreements entered into pursuant hereto and all
certificates and instruments delivered pursuant hereto and thereto) constitute
the entire agreement of the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements, representations,
understandings, negotiations and discussions between the parties, whether oral
or written.
6.6.
MODIFICATIONS
AND AMENDMENTS.
No
amendment, modification or termination of this Agreement shall be binding upon
any party unless executed in writing by such party.
6.7.
TITLES
AND HEADINGS.
Titles
and headings of sections of this Agreement are for convenience only and shall
not affect the construction of any provision of this Agreement.
6.8.
WAIVERS
AND EXTENSIONS.
Any
party to this Agreement may waive any right, breach or default which such party
has the right to waive, PROVIDED that such waiver will not be effective against
the waiving party unless it is in writing, is signed by such party, and
specifically refers to this Agreement. Waivers may be made in advance or after
the right waived has arisen or the breach or default waived has occurred. Any
waiver may be conditional. No waiver of any breach of any agreement or provision
herein contained shall be deemed a waiver of any preceding or succeeding breach
thereof nor of any other agreement or provision herein contained. No waiver
or
extension of time for performance of any obligations or acts shall be deemed
a
waiver or extension of the time for performance of any other obligations or
acts.
6.9.
REMEDIES
CUMULATIVE.
In the
event that the Company fails to observe or perform any covenant or agreement
to
be observed or performed under this Agreement, the Investor or any other holder
of Registrable Securities may proceed to protect and enforce its rights by
suit
in equity or action at law, whether for specific performance of any term
contained in this Agreement or for an injunction against the breach of any
such
term or in aid of the exercise of any power granted in this Agreement or to
enforce any other legal or equitable right, or to take any one or more of such
actions, without being required to post a bond. None of the rights, powers
or
remedies conferred under this Agreement shall be mutually exclusive, and each
such right, power or remedy shall be cumulative and in addition to any other
right, power or remedy, whether conferred by this Agreement or now or hereafter
available at law, in equity, by statute or otherwise.
15
6.10.
GOVERNING
LAW.
This
Agreement shall be governed by, interpreted under, and construed in accordance
with the internal laws of the State of New York applicable to agreements made
and to be performed within the State of York.
6.11.
WAIVER
OF
TRIAL BY JURY.
Each
party hereby irrevocably and unconditionally waives the right to a trial by
jury
in any action, suit, counterclaim or other proceeding (whether based on
contract, tort or otherwise) arising out of, connected with or relating to
this
Agreement, the transactions contemplated hereby, or the actions of the Company
and the Investor in the negotiation, administration, performance or enforcement
hereof.
[Remainder
of Page Intentionally Left Blank.]
16
IN
WITNESS WHEREOF,
the
parties have caused this Registration Rights Agreement to be executed and
delivered by their duly authorized representatives as of the date first written
above.
|
GPS
INDUSTRIES, INC.
A
Nevada corporation
|
|
|
By:_________________________________
Xxxxxx
X. Xxxxxx, Xx., President
|
|
|
INVESTORS:
|
|
|
Address:
X/x
Xxxxxxxxx XXXX
Xxxxxxxx
Xxxxx - Xxxxx 0
Xxxxx,
Xxxxxx Xxxx Xxxxxxxx
|
LEISURECORP
LLC
By:_________________________________
Name: ____
Title: _____
|
|
Address:
_____________________________
_____________________________
_____________________________
|
GREAT
WHITE SHARK ENTERPRISES, INC.
By:_________________________________
Name: ____
Title: _____
|
|
Address:
_____________________________
_____________________________
_____________________________
|
XXXXXX
X. XXXXXX, XX.
By:_________________________________
|
|
Address:
_____________________________
_____________________________
_____________________________
|
XXXXXXX
XXXX
By:_________________________________
|
17
