EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "AGREEMENT") is made and
entered into as of March 24, 2006, among North American Palladium Ltd., a
company organized under the Canada Business Corporations Act (the "Company"),
and each of the purchasers identified on the signature pages hereto (each a
"PURCHASER" and collectively the "PURCHASERS").
WHEREAS, the parties have agreed to enter into this Agreement in
connection with, and as a condition to the Initial Closing under, the Securities
Purchase Agreement, dated as of the date hereof, among the Company and the
Purchasers (the "PURCHASE AGREEMENT");
WHEREAS, (i) the Company has agreed, upon the terms and subject to the
conditions set forth in the Purchase Agreement, to issue and sell to the
Purchasers the Notes (as defined in the Purchase Agreement), which are
convertible into, amortizable with and/or repayable in Common Shares of the
Company (the "NOTE SHARES") in accordance with the terms of the Notes, and (ii)
the Company has agreed upon the terms and subject to the conditions set forth in
the Purchase Agreement, to issue and sell to the Purchasers the Warrants (as
defined in the Purchase Agreement), which are exercisable for Common Shares of
the Company (the "WARRANT SHARES");
WHEREAS, upon exercise of the Unit Warrants (as defined in the Purchase
Agreement) by any Purchaser, the Company shall issue the Additional Units (as
defined in the Unit Warrants) consisting of Notes, which will be convertible,
amortizable and/or repayable in, and Warrants, which will be exercisable for,
Common Shares (collectively, the "ADDITIONAL SHARES").
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in
this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company agrees to provide certain
registration rights under the Securities Act of 1933, as amended, and the rules
and regulations thereunder, (collectively, the "SECURITIES ACT"), and applicable
state securities laws, including pursuant to the U.S.-Canadian
multijurisdictional disclosure system ("MJDS"), and the Company and the
Purchasers further agree as follows:
1. DEFINITIONS. In addition to the terms defined elsewhere in this
Agreement, (a) capitalized terms that are not otherwise defined herein have the
meanings given to such terms in the Purchase Agreement, and (b) the following
terms have the meanings indicated:
"BUSINESS DAY" means any day other than Saturday, Sunday or any
other day on which commercial banks in New York City or Toronto, as applicable,
are authorized or required by law to remain closed.
"CANADIAN PROSPECTUS" means a prospectus or prospectuses of the
Company filed and receipted under Ontario Securities Laws and included in a
Registration Statement under the MJDS.
"CLOSING DATE" has the meaning set forth in the Purchase
Agreement.
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"CONVERSION NOTICE" means the Conversion Notice the form of
which is attached as SCHEDULE 1 to the Notes.
"EFFECTIVE DATE" means the date a Registration Statement has
been declared effective by the SEC.
"EFFECTIVENESS DEADLINE" means (i) with respect to the initial
Registration Statement required to be filed pursuant to SECTION 2(A)(I), the
date that is 60 days from the Initial Closing, (ii) with respect to any
additional Registration Statements that may be required pursuant to SECTION
2(A)(II) (other than in respect of Interest Shares), the 60th day following the
Second Closing or any Unit Warrant Closing, as applicable, and (iii) with
respect to any additional Registration Statements that may be required pursuant
to SECTION 2(A)(III) in respect of Interest Shares, the twenty-second (22nd) day
following the Interest Payment Date (as defined in the Notes) upon which such
Interest Shares were issued.
"EXCHANGE ACT" means the United States Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder.
"EXERCISE NOTICE" means the Exercise Notice the form of which is
contained in SCHEDULE 1 to the Warrants.
"FILING DEADLINE" means (i) with respect to the initial
Registration Statement required to be filed pursuant to SECTION 2(A)(I), the
date that is 30 days from the Initial Closing, (ii) with respect to any
additional Registration Statements that may be required pursuant to SECTION
2(A)(II) (other than in respect of Interest Shares), the 30th day following the
Second Closing or any Unit Warrant Closing, as applicable, and (iii) with
respect to any additional Registration Statements that may be required pursuant
to SECTION 2(A)(III) in respect of Interest Shares, the date on which such
Interest Shares are issued.
"INTEREST SHARES" means any Common Shares issued or issuable in
payment of interest accrued under the Notes.
"INVESTOR" means a Purchaser or any transferee or assignee
thereof to whom a Purchaser assigns its rights under this Agreement and who
agrees in writing to become bound by the provisions of this Agreement in
accordance with SECTION 9 and any transferee or assignee thereof to whom a
transferee or assignee assigns its rights under this Agreement and who agrees in
writing to become bound by the provisions of this Agreement in accordance with
SECTION 9.
"ONTARIO SECURITIES LAWS" means, the Securities Act (Ontario)
and the regulations and rules made thereunder and the applicable published
policy statements issued by the OSC.
"OSC" means the Ontario Securities Commission.
"PERSON" means any individual or corporation, partnership,
trust, incorporated or unincorporated association, joint venture, limited
liability company, joint stock company, government (or an agency or subdivision
thereof) or other entity of any kind.
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"REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the Securities Act and the
declaration or ordering of effectiveness of such Registration Statement(s) by
the SEC.
"REGISTRABLE SECURITIES" means any Common Shares issued or
issuable pursuant the Transaction Documents (including without limitation the
Note Shares and Additional Shares, together with any securities issued or
issuable upon any stock split, dividend or other distribution, recapitalization
or similar event with respect to the foregoing).
"REGISTRATION STATEMENT" means a registration statement or
registration statements of the Company filed under the Securities Act covering
the Registrable Securities, including the exhibits thereto and the documents
incorporated by reference therein, as amended at the date on which such
registration statement became effective.
"REQUIRED HOLDERS" means a majority in interest of the holders
of Registrable Securities, including each of KFOC and IP Synergy Finance Inc.,
in each case for so long as it or any of its affiliates holds any Registrable
Securities.
"REQUIRED REGISTRATION AMOUNT" means, with respect to Note
Shares issuable in connection with a Principal Payment (as defined in the
Notes), in accordance with Section 3(b) of the Notes, 125% of the number of Note
Shares issuable pursuant to the Notes assuming that all Principal Payments under
the Notes were to be satisfied by the issuance of Note Shares in accordance with
Section 3(b) thereof, and dividing the sum of such Principal Payments by 90% of
the VWAP for the five consecutive Trading Days immediately preceding the
applicable date of determination.
"SEC" means the United States Securities and Exchange
Commission.
"SECURITIES LAWS" means the Ontario Securities Laws and the U.S.
Securities Laws.
"TRADING DAY" means (a) any day on which the Common Shares are
listed or quoted, and traded, on the AMEX, or (b) if the Common Shares are not
then listed or quoted, and traded, on the AMEX, then any Business Day.
"TRANSFER AGENT" means the transfer agent (including any
co-transfer agent) of the Company with respect to the Common Shares.
"TSX" means the Toronto Stock Exchange.
"U.S. SECURITIES LAWS" means all of the applicable federal and
state securities laws and regulations of the United States, including without
limitation the Securities Act, the Exchange Act and the respective rules and
regulations of the SEC thereunder.
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2. REGISTRATION.
(a) (i) INITIAL REGISTRATION. As soon as practicable, and in
any event prior to the Filing Deadline, the Company shall prepare and file with
the SEC a Registration Statement on Form F-10 (which shall include the Canadian
Prospectus in the form of a base shelf prospectus as contemplated by National
Instrument 44-102, Shelf Distributions ("NI 44-102"), prepared and filed with
the OSC), to register under the Securities Act the resale, from time to time, by
the selling shareholders identified therein, of all of the Registrable
Securities that are or arise from Note Shares (other than Interest Shares)
and/or Warrant Shares underlying the Notes and Warrants that were issued by the
Company at the Initial Closing. In the event that Form F-10 is unavailable for
such a registration, the Company shall use such other form as is available for
such a registration, subject to the provisions of SECTION 2(E).
(ii) SUBSEQUENT REGISTRATIONS. As soon as practicable
after each of the Second Closing and any exercise of the Unit Warrants, and in
any event prior to the applicable Filing Deadline, the Company shall prepare and
file with the SEC a Registration Statement on Form F-10 (which shall include the
Canadian Prospectus in the form of a base shelf prospectus as contemplated by NI
44-102, prepared and filed with the OSC), to register under the Securities Act
the resale, from time to time, by the selling shareholders identified therein,
of all of the Registrable Securities relating to such Second Closing or Unit
Warrant exercise, as applicable (other than Interest Shares). In the event that
Form F-10 is unavailable for such a registration, the Company shall use such
other form as is available for such a registration, subject to the provisions of
SECTION 2(E).
(iii) INTEREST SHARE REGISTRATIONS. As soon as
practicable after the Company receives an Interest Payment Notice electing
payment in Common Shares, in accordance with Section 2(b) of the Notes, and in
any event prior to the applicable Filing Deadline, the Company shall prepare and
file with the SEC a Registration Statement on Form F-10 (which shall include the
Canadian Prospectus in the form of a base shelf prospectus as contemplated by NI
44-102, prepared and filed with the OSC), to register under the Securities Act
the resale, from time to time, by the selling shareholders identified therein,
of all of the Registrable Securities relating to Interest Shares issued in
connection with such Interest Payment Notice. In the event that Form F-10 is
unavailable for such a registration, the Company shall use such other form as is
available for such a registration, subject to the provisions of SECTION 2(E).
(b) Each Registration Statement prepared pursuant to
SECTIONS 2(A)(I) and (II) shall register for resale not less than the number of
Common Shares equal to the number of Registrable Securities underlying the Notes
and Warrants issuable on the Initial Closing, the Second Closing or any Unit
Closing, as applicable; provided, that with respect to Registrable Securities
issuable in connection with a Principal Payment (as defined in the Notes) in
accordance with Section 3(b) of the Notes, the Company shall register for resale
the Required Registration Amount. Each Registration Statement prepared pursuant
to SECTION 2(A)(III) hereto shall register for resale not less than the number
of Interest Shares issuable on the applicable Interest Payment Date (as defined
in the Notes). Neither the Company nor any affiliate thereof shall identify any
Investor as an underwriter in any public disclosure or filing with the SEC, the
OSC or any Eligible Market, unless required to do so under applicable Securities
Laws, and any Investor being deemed an underwriter by the SEC or the OSC shall
not relieve the Company of any obligations it has under this Agreement or any
other Transaction Document (as defined in the Purchase Agreement). Each
Registration Statement, and to the extent applicable, each
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Canadian Prospectus, shall contain (except if otherwise directed by the Required
Holders or a securities regulator, provided, that if any changes are required by
the securities regulator, such changes shall be subject to the approval of the
Required Holders, which such approval shall not be unreasonably withheld) the
"PLAN OF DISTRIBUTION" section in substantially the form attached hereto as
EXHIBIT A. The Company shall use its best efforts to have each Registration
Statement declared effective by the SEC as soon as practicable, but in no event
later than the Effectiveness Deadline.
(c) INCLUSION OF SECURITIES OTHER THAN REGISTRABLE
SECURITIES. In no event shall the Company include any securities other than
Registrable Securities on any Registration Statement without the prior written
consent of the Required Holders.
(d) LEGAL COUNSEL. Subject to SECTION 5 hereof, the Required
Holders shall each have the right to select one legal counsel in each of Canada
and the U.S. to review and oversee any registration pursuant to this SECTION 2
(collectively, "LEGAL COUNSEL"). The Company and the Investors shall cause their
respective Legal Counsel to reasonably cooperate with each other in performing
the Company's obligations under this Agreement.
(e) INELIGIBILITY FOR FORM F-10. In the event that Form F-10
is not available for the registration of the resale of Registrable Securities
hereunder, the Company shall (i) register the resale of the Registrable
Securities on Form F-3 or such other appropriate form reasonably acceptable to
the Required Holders, and (ii) undertake to reestablish its eligibility to use
Form F-10 in connection with the registration of the resale of Registrable
Securities (other than the Registrable Securities covered by the Form F-3 or
other appropriate form) as soon as practicable thereafter, provided that the
Company shall use its best efforts to maintain the effectiveness of the
Registration Statement then in effect. In the event the Company timely files a
Registration Statement with the SEC on a form other than Form F-10 as a result
of the application of this Section, the Effectiveness Deadline set forth in each
of clauses (i), (ii) and (iii) of the definition of that term shall be extended
by 30 days (and, for purposes of clause (iii) only, an additional 30 days in the
event the SEC elects to review the Registration Statement).
(f) SUFFICIENT NUMBER OF SHARES REGISTERED. In the event the
number of shares available under a Registration Statement filed pursuant to
SECTION 2(A) is insufficient to cover all of the Registrable Securities that are
issuable in connection with any Principal Payment (as defined in the Notes) in
accordance with Section 3(b) of the Notes, the Company shall amend the
applicable Registration Statement, or file a new Registration Statement, or both
(and make parallel amendments or filings with the OSC, to the extent necessary
or advisable), so as to cover at least such Registrable Securities as soon as
practicable, but in any event not later than 15 days after the necessity
therefor arises. The Company shall use its best efforts to cause such amendment
and/or new Registration Statement to become effective as soon as practicable
following the filing thereof.
(g) EFFECT OF FAILURE TO FILE AND OBTAIN AND MAINTAIN
EFFECTIVENESS OF REGISTRATION STATEMENT. Upon the occurrence of any Event (as
defined below) and on every monthly anniversary thereof until the applicable
Event is cured, as partial relief for the damages suffered therefrom by the
Investors (which remedy shall not be exclusive of any other remedies available
at law or in equity), the Company shall pay to each Investor an amount in cash,
as
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special interest under the Notes held by such Purchaser (or if prohibited by
applicable law or in the event Notes are not then held, as liquidated damages
and not as a penalty), equal to 2% of the aggregate purchase price paid under
the Purchase Agreement for the Securities held by such Investor for each of the
first and second months and 1% for each month thereafter. The special interest
(or liquidated damages, as applicable) payable pursuant to the terms hereof
shall apply on a pro rata basis for any portion of a month prior to the cure of
an Event. For such purposes, each of the following shall constitute an "EVENT":
(i) a Registration Statement is not filed on or prior to the applicable Filing
Deadline or is not declared effective on or prior to the applicable
Effectiveness Deadline; (ii) subject to an allowable suspension pursuant to
SECTION 3(P) below, after the Effective Date of a Registration Statement, an
Investor is not permitted to sell Registrable Securities under such Registration
Statement (or a subsequent Registration Statement filed in replacement thereof)
for any reason for three or more consecutive Trading Days or five or more
Trading Days in aggregate in any 12 month period; (iii) the Common Shares are
not listed or quoted, or are suspended from trading, on the AMEX for three or
more consecutive Trading Days or five or more Trading Days in aggregate in any
12 month period; (iv) the Company fails for any reason to deliver a certificate
evidencing any Securities to an Investor within three Trading Days after
delivery of such certificate is required pursuant to any Transaction Document or
the exercise or conversion rights of the Investors pursuant to the Transaction
Documents are otherwise suspended for any reason, except in the event the
Company timely pays the Buy-In Price pursuant to SECTION 9(F) of the Notes or
Section 5(c) of the Warrants, as applicable; (v) the Company fails to have
available a sufficient number of authorized but unissued and otherwise
unreserved Common Shares available to issue all shares underlying the Notes and
Warrants issued or issuable pursuant to the Transaction Documents; and (vi) any
Common Shares directly or indirectly issued pursuant to the Transaction
Documents are not freely tradeable on the TSX under Ontario Securities Laws and
all other applicable securities laws, other than (A) for 120 days after the date
hereof, and (B) with respect to KFOC only, the restrictions on tradeability set
forth in National Instrument 45-102, Resale of Securities ("NI 45-102"). At the
election of any Investor, any amount required to be paid by the Company to such
Investor pursuant to this Section may instead be added to the principal amount
of the outstanding Notes then owned by such Investor.
3. RELATED OBLIGATIONS. At such time as the Company is obligated to
file a Registration Statement with the SEC pursuant to SECTION 2(A), 2(E) or
2(F), the Company will use its best efforts to effect the registration of the
Registrable Securities in accordance with the intended method of disposition
thereof and, pursuant thereto, the Company shall have the following obligations:
(a) The Company shall submit to the SEC, within two Business
Days after the Company learns that no review of a particular Registration
Statement will be made by the staff of the SEC or the Ontario Securities
Commission, as applicable, or that the staff has no further comments on a
particular Registration Statement, as the case may be, a request for
acceleration of effectiveness (or the equivalent under MJDS) of such
Registration Statement to a time and date not later than two Business Days after
the submission of such request. The Company shall use its best efforts to keep
each Registration Statement effective at all times until the earlier of (i) the
fourth anniversary of the date such Registration Statement became effective and
(ii) the date on which the Investors shall have sold all of the Registrable
Securities covered by such Registration Statement (the "REGISTRATION PERIOD");
provided that for so long as any Purchaser
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is an "affiliate" of the Company as defined in Rule 144 under the Securities
Act, the four-year period referred to in clause (i) of this sentence shall be
extended for such Purchaser to (X) such time as such Purchaser is no longer an
affiliate under Rule 144, and (Y) in the case of KFOC, if earlier, the earlier
of (A) ten years from the date hereof, or (B) one year after the death of Xx.
Xxxxxx X. Xxxxxx. Notwithstanding the foregoing, the Company shall not be
required to keep a Registration Statement effective for a particular Investor
that is not an affiliate under Rule 144 if all of the Registrable Securities
held by or issuable to such Investor may immediately be sold under Rule 144
during a 90-day period. The Company shall ensure that each Registration
Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein (in the case of prospectuses, in the light of the
circumstances in which they were made) not misleading.
(b) The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to one or more
Registration Statements and the prospectus used in connection with such
Registration Statements, which prospectus is to be filed pursuant to Rule 424
promulgated under the Securities Act (or the equivalent under MJDS), as may be
necessary to keep such Registration Statement effective at all times during the
Registration Period, and, during such period, comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities of
the Company covered by such Registration Statement. In the case of amendments
and supplements to a Registration Statement which are required to be filed
pursuant to this Agreement (including pursuant to this SECTION 3(B)) by reason
of the Company filing a report on Form 40-F, Form 6-K or any analogous report
under the Exchange Act, the Company shall have incorporated such report by
reference into such Registration Statement, if applicable, or shall file such
amendments or supplements with the SEC on the same day on which the Exchange Act
report is filed which created the requirement for the Company to amend or
supplement such Registration Statement. In addition, the Company shall prepare
and file with the OSC such supplements and amendments to the Canadian Prospectus
as may be required under NI44-102 or Ontario Securities Laws throughout the
Registration Period, as required to maintain the effectiveness of the
Registration Statement under the MJDS.
(c) The Company shall (i) permit Legal Counsel to review and
comment upon (A) mature drafts of a Registration Statement and the Canadian
Prospectus (and the final version of such documents if there have been any
material changes thereto) at least five Business Days prior to its filing with
the SEC or the OSC and (B) all amendments and supplements to all Registration
Statements (except for Reports on Form 40-F and Form 6-K and any similar or
successor reports) within a reasonable number of days prior to their filing with
the SEC, and (B) not file any Registration Statement or Canadian Prospectus or
amendment or supplement thereto in a form to which Legal Counsel reasonably
objects; provided that Legal Counsel responds with substantially all comments
within ten Business Days of receipt of such documents and in any event prior to
the applicable Filing Deadline. The Company shall furnish to Legal Counsel,
without charge, (i) copies of any correspondence from the SEC or OSC or the
staff of the SEC or OSC to the Company or its representatives relating to any
Registration Statement, (ii) promptly after the same is prepared and filed with
the SEC or OSC, as the case may be, one copy of any Registration Statement and
Canadian Prospectus and any amendment(s) thereto, including financial statements
and schedules, all documents incorporated therein by reference, if requested by
an Investor, and all exhibits, and (iii) upon the effectiveness of any
Registration Statement,
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one copy of the prospectus included in such Registration Statement and all
amendments and supplements thereto. The Company shall reasonably cooperate with
Legal Counsel in performing the Company's obligations pursuant to this SECTION
3(C).
(d) The Company shall furnish to each Investor whose
Registrable Securities are included in any Registration Statement, without
charge, (i) promptly after the same is prepared and filed with the SEC, at least
one copy of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, all exhibits and each preliminary prospectus, (ii) upon the
effectiveness of any Registration Statement, ten copies of the prospectus
included in such Registration Statement and all amendments and supplements
thereto (or such other number of copies as such Investor may reasonably
request), and (iii) such other documents, including copies of any preliminary or
final prospectus, as such Investor may reasonably request from time to time in
order to facilitate the disposition of the Registrable Securities owned by such
Investor.
(e) The Company shall use its best efforts to (i) register
and qualify, unless an exemption from registration and qualification applies,
the resale by Investors of the Registrable Securities covered by a Registration
Statement under such other securities or "blue sky" laws of all applicable
jurisdictions, (ii) prepare and file in those jurisdictions, such amendments
(including post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions
and as may be necessary for the Purchasers to consummate the disposition of the
Registrable Securities; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (A) qualify to do
business as a foreign corporation or dealer in any jurisdiction where it would
not otherwise be required to qualify but for this SECTION 3(E), (B) subject
itself to general taxation in any such jurisdiction, or (C) file a general
consent to service of process in any such jurisdiction. The Company shall
promptly notify Legal Counsel and each Investor who holds Registrable Securities
of the receipt by the Company of any notification with respect to the suspension
of the registration or qualification of any of the Registrable Securities for
sale under the securities or "blue sky" laws of any jurisdiction in the United
States or its receipt of actual notice of the initiation or threatening of any
proceeding for such purpose.
(f) The Company shall notify Legal Counsel and each Investor
in writing of the happening of any event, as promptly as practicable after
becoming aware of such event, as a result of which the prospectus included in a
Registration Statement (including any report or filing incorporated by reference
in such Registration Statement), as then in effect, or Canadian Prospectus,
includes an untrue statement of a material fact or omission to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
(provided that in no event shall such notice contain any material, nonpublic
information), and, subject to SECTION 3(P), promptly prepare a supplement or
amendment to such Registration Statement (and/or Canadian Prospectus), which
shall be approved by Legal Counsel, provided that such approval shall not be
unreasonably withheld, or file an appropriate document that is incorporated by
reference to correct such untrue statement or omission, and deliver ten copies
of such supplement or
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amendment to Legal Counsel and each Investor (or such other number of copies as
Legal Counsel or such Investor may reasonably request). The Company shall also
promptly notify Legal Counsel and each Investor in writing (i) when a prospectus
or any prospectus supplement or post-effective amendment has been filed, and
when a Registration Statement or any post-effective amendment has become
effective (notification of such effectiveness shall be delivered to Legal
Counsel and each Investor by facsimile or electronic transmission on the same
day of such effectiveness), (ii) of any request by the SEC or OSC for amendments
or supplements to a Registration Statement or Canadian Prospectus, as the case
may be, or related prospectus or related information, and (iii) of the Company's
reasonable determination that a post-effective amendment to a Registration
Statement or Canadian Prospectus would be appropriate.
(g) The Company shall use its best efforts to prevent the
issuance of any stop order or other suspension of effectiveness of a
Registration Statement or Canadian Prospectus, or the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
and, if such an order or suspension is issued, to obtain the withdrawal of such
order or suspension at the earliest possible moment and to notify Legal Counsel
and each Investor who holds Registrable Securities being sold of the issuance of
such order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.
(h) The Company shall make available for inspection, during
normal business hours on two Business Days notice, by (i) any Investor, (ii)
Legal Counsel and (iii) any firm of accountants or other agents retained by the
Investors (collectively, the "INSPECTORS"), all pertinent financial and other
records, and pertinent corporate documents and properties of the Company
(collectively, the "RECORDS"), as shall be reasonably deemed necessary by each
Inspector, and cause the Company's officers, directors and employees to supply
all information which any Inspector may reasonably request; provided, however,
that each Inspector shall agree to hold in strict confidence and shall not make
any disclosure (except to an Investor) or use of any Record other than public
Records, unless (A) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement or is otherwise
required under the Securities Act or Ontario Securities Laws or stock exchange
requirements, (B) the release of such Records is ordered pursuant to a final,
non-appealable subpoena or order from a court or government body of competent
jurisdiction, or (C) the information in such Records has been made generally
available to the public other than by disclosure in violation of this or any
other agreement of which the Inspector has knowledge. Each Investor agrees that
it shall, upon learning that disclosure of such Records is sought in or by a
court or governmental body of competent jurisdiction or through other means,
give prompt notice to the Company and allow the Company, at its expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, the Records deemed confidential. Nothing herein (or in any other
confidentiality agreement between the Company and any Investor) shall be deemed
to limit the Investors' ability to sell Registrable Securities in a manner which
is otherwise consistent with applicable laws and regulations.
(i) The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with Securities Laws,
(ii) the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement or Canadian Prospectus or
is otherwise required under the Securities Act, (iii) the release of such
9
information is ordered pursuant to a subpoena or other final, non-appealable
order from a court or governmental body of competent jurisdiction, or (iv) such
information has been made generally available to the public other than by
disclosure in violation of this Agreement or any other agreement. The Company
agrees that it shall, upon learning that disclosure of such information
concerning an Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt written notice to
such Investor and allow such Investor, at the Investor's expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.
(j) The Company shall use its best efforts to (i) cause all
of the Registrable Securities covered by a Registration Statement to be listed
on each securities exchange on which securities of the same class or series
issued by the Company are then listed, if any, if the listing of such
Registrable Securities is then permitted under the rules of such exchange, and
(ii) secure designation and quotation of all of the Registrable Securities
covered by a Registration Statement on the AMEX and to be listed and quoted for
trading on the TSX. The Company shall pay all fees and expenses in connection
with satisfying its obligation under this SECTION 3(J).
(k) The Company shall cooperate with the Investors who hold
Registrable Securities being offered and, to the extent applicable, use its best
efforts to facilitate the timely preparation and delivery of certificates (not
bearing any restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such certificates to be
in such denominations or amounts, as the case may be, as the Investors may
reasonably request and registered in such names as the Investors may request;
provided that the Company is entitled to receive, upon request made to an
Investor, in connection with a delivery of Registrable Securities not containing
any legend, written confirmation of the matters set forth in SECTION 4(C)
hereof.
(l) If reasonably requested by an Investor, the Company
shall (i) as soon as practicable incorporate in a prospectus supplement or
post-effective amendment such information as an Investor reasonably requests to
be included therein relating to the sale and distribution of Registrable
Securities, including, without limitation, information with respect to the
number of Registrable Securities being offered or sold, the purchase price being
paid therefor and any other terms of the offering of the Registrable Securities
to be sold in such offering, and (ii) as soon as practicable make all required
filings of such prospectus supplement or post-effective amendment after being
notified of the matters to be incorporated in such prospectus supplement or
post-effective amendment.
(m) [Omitted.]
(n) The Company shall make generally available to its
security holders as soon as practical, but not later than 90 days after the
close of the period covered thereby, an earning statement (in form complying
with, and in the manner provided by, the provisions of Rule 158 under the
Securities Act) covering a 12-month period beginning not later than the first
day of the Company's fiscal quarter next following the effective date of a
Registration Statement.
(o) Within two Business Days after a Registration Statement
which covers Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall
10
cause legal counsel for the Company to deliver, to the transfer agent for such
Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the SEC.
(p) Notwithstanding anything in this Agreement to the
contrary, the Company may, by written notice to the holders of Registrable
Securities, suspend sales under a Registration Statement after the effective
date thereof and/or require that such holders immediately cease the sale of
Common Shares pursuant thereto and/or defer the filing of any subsequent
Registration Statement if: (i) the Company is in possession of material
non-public information relating to a material merger, acquisition, sale or
similar material transaction, (ii) the Board of Directors determines in good
faith, by appropriate resolutions, that, as a result of such activity, (A) it
would be materially detrimental to the Company (other than as relating solely to
the price of the Common Shares) to file a Registration Statement at such time
and (B) it is in the best interests of the Company to defer proceeding with such
registration at such time, and (iii) in the opinion of legal counsel for the
Company sales under the Registration Statement are required to be suspended.
Upon receipt of such notice, each holder of Registrable Securities shall
immediately discontinue any sales of Registrable Securities pursuant to such
registration until such holder has received copies of a supplemented or amended
prospectus or until such holder is advised in writing by the Company that the
then-current prospectus may be used and has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by reference
in such prospectus. In no event, however, shall this right be exercised to
suspend sales beyond the period during which (in the good faith determination of
the Company's Board of Directors) the failure to require such suspension would
be materially detrimental to the Company. The Company's rights under this
SECTION 3(P) may be exercised not more than one time, nor for a period of more
than 90 days, in any 12-month period. Immediately after the end of any
suspension period under this SECTION 3(P), the Company shall take all necessary
actions (including filing any required supplemental prospectus) to restore the
effectiveness of the applicable Registration Statement and the ability of the
holders of Registrable Securities to publicly resell their Registrable
Securities pursuant to such effective Registration Statement. Notwithstanding
anything to the contrary contained herein, the Company shall cause its transfer
agent to deliver unlegended Common Shares to a transferee of an Investor in
accordance with the terms of the Purchase Agreement in connection with any sale
of Registrable Securities with respect to which an Investor has entered into a
contract for sale, and delivered a copy of the prospectus included as part of
the applicable Registration Statement, if required, prior to the Investor's
receipt of the notice of a suspension period and for which the Investor has not
yet settled.
(q) The Company shall cause new certificates free of any
Canadian legends to be delivered to the Investor forthwith following the
presentation to the Company of a Declaration for Removal of Legend in the form
attached hereto as EXHIBIT B.
4. OBLIGATIONS OF THE INVESTORS.
(a) At least five Business Days prior to the first
anticipated filing date of a Registration Statement or Canadian Prospectus, the
Company shall notify each Investor in writing of the information the Company
requires from each such Investor if such Investor elects
11
to have any of such Investor's Registrable Securities included in such
Registration Statement or Canadian Prospectus. It shall be a condition precedent
to the obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Investor
and any special interest or default resulting from such failure, that such
Investor shall furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the
Registrable Securities held by it as shall be reasonably required to effect the
effectiveness of the registration of such Registrable Securities.
(b) Each Investor agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in SECTION
3(G), the first sentence of SECTION 3(F) or a suspension period under SECTION
3(P) (a "SUSPENSION NOTICE"), such Investor will (i) immediately discontinue
disposition of Registrable Securities pursuant to any Registration Statement(s)
covering such Registrable Securities until such Investor's receipt of the copies
of the supplemented or amended prospectus contemplated by SECTION 3(G) or the
first sentence of SECTION 3(F) or receipt of notice that no supplement or
amendment is required, and (ii) if so requested by the Company, deliver to the
Company or destroy all copies of the prospectus covering the Registrable
Securities in its possession at the time of receipt of such Suspension Notice.
Notwithstanding anything to the contrary contained herein, the Company shall
cause its transfer agent to deliver unlegended Common Shares to a transferee of
an Investor in accordance with the terms of the Purchase Agreement in connection
with any sale of Registrable Securities with respect to which an Investor has
entered into a contract for sale and delivered a copy of the applicable
prospectus prior to the Investor's receipt of a notice from the Company of the
happening of any event of the kind described in SECTION 3(G) or the first
sentence of SECTION 3(F) and for which the Investor has not yet settled.
(c) Each Investor covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act, in each case,
as applicable to it in connection with sales of Registrable Securities pursuant
to the Registration Statement and shall sell the Registrable Securities only in
accordance with a method of disposition described in the Registration Statement.
5. EXPENSES OF REGISTRATION. All reasonable expenses, other than
underwriting discounts, commissions and other selling expenses, incurred in
connection with registrations, filings or qualifications pursuant to SECTIONS 2
and 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, and fees and disbursements of
legal counsel for the Company shall be paid by the Company. The Company shall
also reimburse the Investors for the reasonable fees and disbursements of Legal
Counsel in connection with registration, filing or qualification pursuant to
SECTIONS 2 and 3 of this Agreement.
6. INDEMNIFICATION. In the event any Registrable Securities are
included in a Registration Statement or Canadian Prospectus under this
Agreement:
(a) To the fullest extent permitted by law, the Company
will, and hereby does, indemnify, hold harmless and defend each Investor, the
directors, officers, members, partners, employees, agents, representatives of,
and each Person, if any, who controls any Investor within
12
the meaning of the Securities Act or the Exchange Act (each, an "INDEMNIFIED
PERSON"), against any losses, claims, damages, liabilities, judgments, fines,
penalties, charges, costs, reasonable attorneys' fees, amounts paid in
settlement or expenses, joint or several, (collectively, "CLAIMS") incurred in
investigating, preparing or defending any action, claim, suit, inquiry,
proceeding, investigation or appeal taken from the foregoing by or before any
court or governmental, administrative or other regulatory agency, body or the
SEC or OSC, whether pending or threatened, whether or not an indemnified party
is or may be a party thereto ("INDEMNIFIED DAMAGES"), to which any of them may
become subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon (i)
any untrue statement or alleged untrue statement of a material fact in a
Registration Statement or any post-effective amendment thereto or in any filing
made in connection with the qualification of the offering under the securities
or other "blue sky" laws of any jurisdiction in which Registrable Securities are
offered, or the omission or alleged omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
(ii) any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus if used prior to the effective date of
such Registration Statement, or contained in the final prospectus (as amended or
supplemented, if the Company files any amendment thereof or supplement thereto
with the SEC or OSC, as applicable, but only in respect of the period
thereafter) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in the light of the
circumstances under which the statements therein were made, not misleading,
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, or other law, including, without limitation, any state or
provincial securities law, or any rule or regulation thereunder relating to the
offer or sale of the Registrable Securities pursuant to a Registration Statement
or Canadian Prospectus and any rule or regulation of the AMEX or TSX, or (iv)
any violation of this Agreement by the Company (the matters in the foregoing
clauses (i) through (iv) being, collectively, "VIOLATIONS"). Subject to SECTION
6(C), the Company shall reimburse the Indemnified Persons, promptly as such
expenses are incurred and are due and payable, for any reasonable and documented
legal fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnity
agreement contained in this SECTION 6(A): (i) shall not apply to a Claim by an
Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to SECTION 3(D); (ii) with respect to any preliminary prospectus, shall
not inure to the benefit of any such Person from whom the Person asserting any
such Claim purchased the Registrable Securities that are the subject thereof (or
to the benefit of any Person controlling such Person) if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
in the prospectus, as then amended or supplemented, if such prospectus was
timely made available by the Company pursuant to SECTION 3(D), but only in
respect of the period thereafter; (iii) shall not be available to the extent
such Claim is based on a failure of the Investor to deliver or to cause to be
delivered the prospectus made available by the Company, including a corrected
prospectus, but only in respect of the period thereafter, if such prospectus or
corrected prospectus was timely made available by the Company pursuant to
SECTION 3(D); and (iv) shall
13
not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Company, which consent shall
not be unreasonably withheld or delayed. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the transfer of the Registrable Securities
by the Investors pursuant to SECTION 9.
(b) In connection with any Registration Statement in which
an Investor is participating, each such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in SECTION 6(A), the Company, each of its directors, each
of its officers who signs the Registration Statement and each Person, if any,
who controls the Company within the meaning of the Securities Act or the
Exchange Act (each, an "INDEMNIFIED PARTY"), against any Claim or Indemnified
Damages to which any of them may become subject, under the Securities Act, the
Exchange Act or otherwise, insofar as such Claim or Indemnified Damages arise
out of or are based upon any Violation, in each case to the extent, and only to
the extent, that such Violation occurs in reliance upon and in conformity with
written information furnished to the Company by such Investor expressly for use
in connection with such Registration Statement; and, subject to SECTION 6(C),
such Investor will reimburse any reasonable and documented legal or other
reasonable and documented expenses incurred by an Indemnified Party in
connection with investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this SECTION 6(B) and the agreement
with respect to contribution contained in SECTION 7 shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent shall not be unreasonably
withheld or delayed; provided, further, however, that the Investor shall be
liable under this SECTION 6(B) for only that amount of a Claim or Indemnified
Damages as does not exceed the net proceeds to such Investor as a result of the
sale of Registrable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of
the Registrable Securities by the Investors pursuant to SECTION 9.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this SECTION 6(B) with respect to any preliminary
prospectus shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the preliminary prospectus
was corrected on a timely basis in the prospectus, as then amended or
supplemented.
(c) Promptly after receipt by an Indemnified Person or
Indemnified Party under this SECTION 6 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving
a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this SECTION
6, deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the reasonable and documented fees and expenses of not more than
one counsel in each applicable jurisdiction for such Indemnified Person or
Indemnified Party to be paid by the indemnifying party, if, in the reasonable
opinion of counsel retained by the indemnifying party, the
14
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and any
other party represented by such counsel in such proceeding. The Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party in
connection with any negotiation or defense of any such action or Claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or Claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person reasonably apprised at all times as to
the status of the defense or any settlement negotiations with respect thereto.
No indemnifying party shall be liable for any settlement of any action, claim or
proceeding effected without its prior written consent, provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such Claim or litigation. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified Person with respect to all third parties
(except for other Indemnified Parties), firms or corporations relating to the
matter for which indemnification has been made. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to
the Indemnified Person or Indemnified Party under this SECTION 6, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action.
(d) The indemnification required by this SECTION 6 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Damages
are incurred.
(e) The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.
7. CONTRIBUTION. To the extent any indemnification by an
indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under SECTION 6 to the fullest extent permitted by
law; provided, however, that: (i) no Person involved in the sale of Registrable
Securities which Person is guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) in connection with such sale
shall be entitled to contribution from any Person involved in such sale of
Registrable Securities who was not guilty of fraudulent misrepresentation; and
(ii) contribution by any seller of Registrable Securities shall be limited in
amount to the net amount of proceeds received by such seller from the sale of
such Registrable Securities pursuant to such Registration Statement.
8. REPORTS UNDER THE EXCHANGE ACT AND ONTARIO SECURITIES LAWS. With
a view to making available to the Investors the benefits of Rule 144 promulgated
under the Securities Act
15
or any other similar rule or regulation of the SEC that may at any time permit
the Investors to sell securities of the Company to the public without
registration ("RULE 144"), the Company agrees to:
(a) make and keep public information available, as those
terms are understood and defined in Rule 144;
(b) file with the SEC in a timely manner all reports and
other documents required of the Company under the Securities Act and the
Exchange Act so long as the Company remains subject to such requirements and the
filing of such reports and other documents is required for the applicable
provisions of Rule 144; and
(c) furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request such information not available on
SEDAR or XXXXX as may be reasonably requested by each Investor to permit the
Investors to sell such securities pursuant to Rule 144 without registration. The
Company will also continue to make all filings and take all actions required
under applicable Ontario Securities Laws and under TSX requirements, including
maintaining its reporting issuer status in good standing under applicable
Ontario Securities Laws.
9. ASSIGNMENT OF REGISTRATION RIGHTS. The rights under this
Agreement shall be automatically assignable by the Investors to any transferee
in a private transaction of all or any portion of such Investor's Notes and/or
Warrants, pursuant to the terms thereof, if: (a) the Investor agrees in writing
with the transferee or assignee to assign such rights, and a copy of such
agreement is furnished to the Company within a reasonable time after such
assignment; (b) the Company is furnished with written notice of (i) the name and
address of such transferee or assignee, and (ii) the securities with respect to
which such registration rights are being transferred or assigned; (c) at or
before the time the Company receives the written notice contemplated by clause
(b) of this sentence the transferee or assignee agrees in writing with the
Company to be bound by all of the provisions contained herein; and (d) such
transfer shall have been made in accordance with the applicable requirements of
the Purchase Agreement.
10. AMENDMENT OF REGISTRATION RIGHTS. Provisions of this Agreement
may be amended and the observance thereof maybe waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
prior written consent of the Company and the Required Holders. Any amendment or
waiver effected in accordance with this SECTION 10 shall be binding upon each
Investor and the Company. No such amendment shall be effective to the extent
that it applies to less than all of the holders of the Registrable Securities.
No consideration shall be offered or paid to any Person to amend or consent to a
waiver or modification of any provision of any of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.
11. MISCELLANEOUS.
(a) A Person is deemed to be a holder of Registrable
Securities whenever such Person owns or is deemed to own of record such
Registrable Securities. If the Company receives conflicting instructions,
notices or elections from two or more Persons with respect to the same
16
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the such record owner of such Registrable
Securities.
(b) Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
If to the Company:
000 Xxxxx Xxxxxxxx Xxxxxx X., Xxx. 0000
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Telephone No.:(000) 000-0000
Facsimile No.: (000) 000-0000
Attn.: Ian MacNeily
With a copy to:
Gowling, Xxxxxxx Xxxxxxxxx LLP
0 Xxxxx Xxxxxxxx Xxxxx, Xxx. 0000
000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx, Xxxxxx X0X 0X0
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attn.: Xxxxxx Xxxx
and:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxx Xxxxxx, Xxx. 0000
X.X. Xxx 000
Xxxxxxx, Xxxxxxx Xxxxxx X0X 0X0
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attn.: Xxxxxxxx X. Xxxxxxxx
If to a Purchaser, to its address and facsimile number as set
forth in the Purchase Agreement, with copies to such Purchaser's legal counsel
as set forth in the Purchase Agreement, or to such other address and/or
facsimile number and/or to the attention of such other Person as the recipient
party has specified by written notice given to each other party five days prior
to the effectiveness of such change. Written confirmation of receipt (i) given
by the recipient of such notice, consent, waiver or other communication, (ii)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an
17
image of the first page of such transmission, or (iii) provided by a courier or
overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from a nationally recognized overnight delivery
service in accordance with clause (i), (ii) or (iii) above, respectively
(c) Failure of any party to exercise any right or remedy
under this Agreement or otherwise, or delay by a party in exercising such right
or remedy, shall not operate as a waiver thereof.
(d) ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY,
ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CHOICE OF
LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR
ANY OTHER JURISDICTIONS) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY
JURISDICTIONS OTHER THAN THE STATE OF NEW YORK. EACH PARTY HEREBY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN
THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY
OR DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN
ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO
THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR
PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF
PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR
PROCEEDING BY MAILING A COPY THEREOF TO SUCH PARTY AT THE ADDRESS FOR SUCH
NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE
GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED
HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY
MANNER PERMITTED BY LAW. IF ANY PROVISION OF THIS AGREEMENT SHALL BE INVALID OR
UNENFORCEABLE IN ANY JURISDICTION, SUCH INVALIDITY OR UNENFORCEABILITY SHALL NOT
AFFECT THE VALIDITY OR ENFORCEABILITY OF THE REMAINDER OF THIS AGREEMENT IN THAT
JURISDICTION OR THE VALIDITY OR ENFORCEABILITY OF ANY PROVISION OF THIS
AGREEMENT IN ANY OTHER JURISDICTION. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(e) This Agreement, the other Transaction Documents and the
instruments referenced herein and therein constitute the entire agreement among
the parties hereto with respect to the subject matter hereof and thereof. There
are no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement, the other Transaction
Documents and the instruments referenced herein and therein supersede all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.
(f) Subject to the requirements of SECTION 9, this Agreement
shall inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.
18
(g) The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning or
interpretation hereof. When a reference is made in this Agreement to a Section,
such reference shall be to a Section of this Agreement, unless otherwise clearly
indicated. Whenever the word "including" is used in this Agreement, it shall be
deemed to be followed by the words "without limitation." The use of any gender
herein shall be deemed to be or include the other genders and the use of the
singular herein shall be deemed to be or include the plural (and vice versa),
wherever appropriate.
(h) This Agreement may be executed in identical
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same agreement. This Agreement, once executed by a party,
may be delivered to the other party hereto by facsimile transmission of a copy
of this Agreement bearing the signature of the party so delivering this
Agreement.
(i) Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(j) All consents and other determinations required to be
made by the Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by the Required Holders.
(k) The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent and no rules
of strict construction will be applied against any party.
(l) This Agreement is intended for the benefit of the
parties hereto and their respective permitted successors and assigns, and is not
for the benefit of, nor may any provision hereof be enforced by, any other
Person.
(m) Unless otherwise indicated, all dollar amounts referred
to in this Agreement are in United States Dollars. All amounts owing under this
Agreement are payable in United States Dollars. All amounts denominated in other
currencies shall be converted in the United States dollar equivalent amount in
accordance with the applicable exchange rate in effect on the date of
calculation.
(n) The obligations of each Purchaser hereunder are several
and not joint with the obligations of any other Purchaser, and no provision of
this Agreement is intended to confer any obligations on any Purchaser vis-a-vis
any other Purchaser. Nothing contained herein, and no action taken by any
Purchaser pursuant hereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchaser are in any way acting in concert or as a
group with respect to such obligations or the transactions contemplated herein.
(o) Except as otherwise provided herein, in any other
Transaction Document or as required by applicable law or legal process or stock
exchange requirements, no Investor
19
may make any public announcement concerning this Agreement or the transactions
contemplated by this Agreement without obtaining the prior written consent of
the Company and giving the Company no less than 48 hours to review and comment
on such public announcement prior to release.
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SIGNATURE PAGES TO FOLLOW]
20
IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
NORTH AMERICAN PALLADIUM LTD.
By: _______________________________
Name: ________________________
Title: ________________________
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SIGNATURE PAGES OF PURCHASERS TO FOLLOW]
21
PURCHASERS:
[PURCHASER]
By: ______________________________
Name:_________________________
Title:________________________
Address for Notice:
Xxx Xxxx, XX 00000
Telephone No.:
Facsimile No.:
Attn:
With a copy to:
Proskauer Rose LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attn: Xxxx X. Xxxxxxx
XXXXXX-XXXXXXX OIL COMPANY
By: ______________________________
Name:_________________________
Title:________________________
Address for Notice:
X.X. Xxx 00000
Xxxxx, Xxxxxxxx 00000-0000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Attn: Chief Financial Officer
With a copy to:
Xxxxxxxx Xxxxxxx, Lawyers
000 Xxxx 0xx Xxxxxx
Xxxxx, Xxxxxxxx 00000-0000
Telephone No.:
Facsimile No.:
Attn: H. Xxxxxx Xxxxxx
EXHIBIT A
PLAN OF DISTRIBUTION
The selling stockholders may, from time to time, sell any or all of
their shares of common stock on any stock exchange, market or trading facility
on which the shares are traded or in private transactions. These sales may be at
fixed or negotiated prices. The selling stockholders may use any one or more of
the following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal
to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the applicable
exchange;
o privately negotiated transactions;
o short sales;
o broker-dealers may agree with the selling stockholders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
The selling stockholders may also engage in short sales against the box,
puts and calls and other transactions in our securities or derivatives of our
securities and may sell or deliver shares in connection with these trades.
Broker-dealers engaged by the selling stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved. Any
profits on the resale of shares of common stock by a broker-dealer acting as
principal might be deemed to be underwriting discounts or commissions under the
Securities Act. Discounts, concessions, commissions and similar selling
expenses, if any, attributable to the sale of shares will be borne by a selling
stockholder. The selling stockholders may agree to indemnify any agent, dealer
or broker-dealer that participates in transactions involving sales of the shares
if liabilities are imposed on that person under the Securities Act.
The selling stockholders may from time to time pledge or grant a
security interest in some or all of the shares of common stock owned by them
and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock from
time to time under this prospectus after we have filed an amendment to this
prospectus under the applicable provisions of the Securities Act of 1933
amending the list of selling stockholders to include the pledgee, transferee or
other successors in interest as selling stockholders under this prospectus.
The selling stockholders also may transfer the shares of common stock in
other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this
prospectus and may sell the shares of common stock from time to time under this
prospectus after we have filed an amendment to this prospectus under the
applicable provisions of the Securities Act of 1933 amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus.
The selling stockholders and any broker-dealers or agents that are
involved in selling the shares of common stock may be deemed to be
"underwriters" within the meaning of the Securities Act in connection with such
sales. In such event, any commissions received by such broker-dealers or agents
and any profit on the resale of the shares of common stock purchased by them may
be deemed to be underwriting commissions or discounts under the Securities Act.
We are required to pay all fees and expenses incident to the
registration of the shares of common stock, other than the fees and
disbursements of counsel to the selling stockholders. We have agreed to
indemnify the selling stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
The selling stockholders have advised us that they have not entered into
any agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their shares of common stock, nor is there
an underwriter or coordinating broker acting in connection with a proposed sale
of shares of common stock by any selling stockholder. If we are notified by any
selling stockholder that any material arrangement has been entered into with a
broker-dealer for the sale of shares of common stock, if required, we will file
a supplement to this prospectus. If the selling stockholders use this prospectus
for any sale of the shares of common stock, they will be subject to the
prospectus delivery requirements of the Securities Act.
The anti-manipulation rules of Regulation M under the Securities Exchange Act of
Exchange may apply to sales of our common stock and activities of the selling
stockholders.
EXHIBIT B
FORM OF DECLARATION FOR REMOVAL OF LEGEND
TO: NORTH AMERICAN PALLADIUM LTD.
AND TO: COMPUTERSHARE TRUST COMPANY OF CANADA
The undersigned holds common shares (the "COMMON SHARES") of North
American Palladium Ltd. (the "Issuer") that were issued upon the exercise of
convertible securities of the Issuer that the undersigned originally purchased
from the Issuer in March, 2006. The undersigned hereby requests the removal of
all Canadian securities law legends from the certificates representing such
Common Shares and, in furtherance thereof, represents, warrants and certifies
that it proposes to sell such Common Shares either:
(1) under a U.S. registration statement in the U.S.;
(2) to a U.S. person in accordance with applicable U.S. securities
laws;
(3) through the facilities of a U.S. stock exchange; or
(4) otherwise outside Canada.
DATED this day of , 200 .
Witness: )
)
)
) Signature of Registered Holder
)
)
Name of Registered Holder
