REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated as of May 10th,
2010, by and between GENESIS ELECTRONICS GROUP, INC. a Nevada
corporation (the "Company"), and TANGIERS INVESTORS, LP, a Delaware
limited partnership (the "Investor").
WHEREAS:
A. In connection with the Securities Purchase Agreement by and between
the parties hereto of even date herewith (the "Securities Purchase
Agreement"), the Company has agreed, upon the terms and subject to the
conditions of the Securities Purchase Agreement, to issue and sell to
the Investor that number of shares of the Company's common stock, par
value $0.001 per share (the "Common Stock"), which can be purchased
pursuant to the terms of the Securities Purchase Agreement for an
aggregate purchase price of up to Five Million Dollars ($5,000,000).
Capitalized terms not defined herein shall have the meaning ascribed to
them in the Securities Purchase Agreement.
B. To induce the Investor to execute and deliver the Securities
Purchase Agreement, the Company has agreed to provide certain
registration rights under the Securities Act of 1933, as amended, and
the rules and regulations thereunder, or any similar successor statute
(collectively, the "Securities Act"), and applicable state securities
laws.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
Company and the Investor hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following
meanings:
a. "Person" means a corporation, a limited liability company, an
association, a partnership, an organization, a business, an individual,
a governmental or political subdivision thereof or a governmental
agency.
b. "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 pursuant
to Rule 415 under the Securities Act or any successor rule providing
for offering securities on a continuous or delayed basis ("Rule 415"),
and the declaration or ordering of effectiveness of such Registration
Statement(s) by the United States Securities and Exchange Commission
(the "SEC").
c. "Registrable Securities" means the Investor's Shares, as defined in
the Securities Purchase Agreement, and shares of Common Stock issuable
to Investors pursuant to the Securities Purchase Agreement.
d. "Registration Statement" means a registration statement under the
Securities Act, which covers the Registrable Securities.
2. REGISTRATION.
a. Mandatory Registration. The Company shall prepare and file with the
SEC a Registration Statement on Form S-1 or on such other form as is
available. The Company shall cause such Registration Statement to be
2
declared effective by the SEC prior to the first sale to the Investor
of the Company's Common Stock pursuant to the Securities Purchase
Agreement. The Company shall cause the Registration Statement to remain
effective until the full completion of the Commitment Period (as such
term is defined in the Securities Purchase Agreement).
b. 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
pursuant to the Securities Purchase Agreement, the Company shall amend
the Registration Statement, or file a new Registration Statement (on
the short form available therefore, if applicable), or both, so as to
cover all of such Registrable Securities pursuant to the Securities
Purchase Agreement as soon as practicable, but in any event not later
than fifteen (15) days after the necessity therefore 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. For purposes of the foregoing provision,
the number of shares available under a Registration Statement shall be
deemed "insufficient to cover all of the Registrable Securities" if at
any time the number of Registrable Securities issuable on an Advance
Notice Date is greater than the number of shares available for resale
under such Registration Statement.
3. RELATED OBLIGATIONS.
a. The Company shall keep the Registration Statement effective pursuant
to Rule 415 at all times until the completion of the Commitment Period
(as such term is defined in the Securities Purchase Agreement) (the
"Registration Period"), which 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 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 a Registration
Statement and the prospectus used in connection with such Registration
Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the Securities Act, as may be necessary to keep such
Registration Statement effective at all times during the Registration
Period, and, during such period, comply with the provisions of the
Securities Act with respect to the disposition of all Registrable
Securities of the Company covered by such Registration Statement until
such time as all of such Registrable Securities shall have been
disposed of in accordance with the intended methods of disposition by
the seller or sellers thereof as set forth in such Registration
Statement. In the case of amendments and supplements to a Registration
Statement which are required to be filed pursuant to this Agreement
(including pursuant to this Section 3(b)) by reason of the Company's
filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous
report under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), the Company shall have incorporated such report by
reference into the 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 the Registration Statement.
3
c. The Company shall furnish to the Investor without charge, (i) at
least one copy of such Registration Statement as declared effective by
the SEC and any amendment(s) thereto, including financial statements
and schedules, all documents incorporated therein by reference, all
exhibits and each preliminary prospectus, (ii) ten (10) copies of the
final 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 as
such Investor may reasonably request from time to time in order to
facilitate the disposition of the Registrable Securities owned by such
Investor.
d. The Company shall use its best efforts to (i) register and qualify
the Registrable Securities covered by a Registration Statement under
such other securities or "blue sky" laws of such jurisdictions in the
United States as the Investor reasonably requests, (ii) prepare and
file in those jurisdictions, such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as
may be necessary to maintain the effectiveness thereof during the
Registration Period, (iii) take such other actions as may be necessary
to maintain such registrations and qualifications in effect at all
times during the Registration Period, and (iv) take all other actions
reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company
shall not be required in connection therewith or as a condition thereto
to (w) make any change to its certificate of incorporation or by-laws,
(x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (y) subject
itself to general taxation in any such jurisdiction, or (z) file a
general consent to service of process in any such jurisdiction. The
Company shall promptly notify the Investor 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
threat of any proceeding for such purpose.
e. As promptly as practicable after becoming aware of such event or
development, the Company shall notify the Investor in writing of the
happening of any event as a result of which the prospectus included in
a Registration Statement, as then in effect, includes an untrue
statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements
therein, in 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 promptly prepare a supplement or
amendment to such Registration Statement to correct such untrue
statement or omission, and deliver ten (10) copies of such supplement
or amendment to each Investor. The Company shall also promptly notify
the 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 the
Investor by facsimile on the same day of such effectiveness), (ii) of
any request by the SEC for amendments or supplements to a Registration
Statement or related prospectus or related information, and (iii) of
the Company's reasonable determination that a post-effective amendment
to a Registration Statement would be appropriate.
f. 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 the suspension of the qualification of any of the
4
Registrable Securities for sale in any jurisdiction within the United
States of America 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 the Investor 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.
g. At the reasonable request of the Investor, the Company shall furnish
to the Investor, on the date of the effectiveness of the Registration
Statement and thereafter from time to time on such dates as the
Investor may reasonably request (i) a letter, dated such date, from the
Company's independent certified public accountants in form and
substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, and
(ii) an opinion, dated as of such date, of counsel representing the
Company for purposes of such Registration Statement, in form, scope and
substance as is customarily given in an underwritten public offering,
addressed to the Investor.
h. The Company shall make available for inspection by (i) the Investor
and (ii) one firm of accountants or other agents retained by the
Investor (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 necessary
to enable them to exercise their due diligence responsibility, and
cause the Company's officers, directors and employees to supply all
information which any Inspector may reasonably request in connection
with the Registration Statement. The Investor agrees that Records
obtained by it as a result of such inspections which is conspicuously
marked by the Company as "Confidential" (subject to the Company's
obligations with respect to material non-public information set forth
in Section 8.1(a) herein) shall be deemed confidential and held in
strict confidence by the Investor, 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, (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 and the Investor has knowledge. The 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.
The Company shall hold in confidence and not make any disclosure of
information concerning the Investor provided to the Company unless (i)
disclosure of such information is necessary to comply with federal or
state securities laws, (ii) the disclosure of such information is
necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii) the release of such information is
ordered pursuant to a subpoena or other final, non-appealable order
from a court or governmental body of competent jurisdiction, or (iv)
such information has been made generally available to the public other
than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that
disclosure of such information concerning the Investor is sought in or
by a court or governmental body
5
of competent jurisdiction or through other means, give prompt written
notice to the Investor and allow the Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or
to obtain a protective order for, such information.
The Company shall use its best efforts either to cause all the
Registrable Securities covered by a Registration Statement (i) to be
listed on each securities exchange on which securities of the same
class or series issued by the Company are then listed, if any, if the
listing of such Registrable Securities is then permitted under the
rules of such exchange or to secure the inclusion for quotation on the
National Association of Securities Dealers, Inc. OTC Bulletin Board for
such Registrable Securities. The Company shall pay all fees and
expenses in connection with satisfying its obligation under this
Section 3(j).
The Company shall cooperate with the Investor to the extent applicable,
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 Investor may reasonably request and registered in such names
as the Investor may request.
The Company shall use its best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be
registered with or approved by such other governmental agencies or
authorities as may be necessary to consummate the disposition of such
Registrable Securities.
The Company shall make generally available to its security holders as
soon as practical, but not later than ninety (90) days after the close
of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the Securities Act) covering a
twelve-month period beginning not later than the first day of the
Company's fiscal quarter next following the effective date of the
Registration Statement.
The Company shall otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC in connection with any
registration hereunder.
Within two (2) business days after a Registration Statement which
covers Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to
deliver, to the transfer agent for such Registrable Securities (with
copies to the Investor) confirmation that such Registration Statement
has been declared effective by the SEC in the form attached hereto as
Exhibit A.
The Company shall take all other reasonable actions necessary to
expedite and facilitate disposition by the Investor of Registrable
Securities pursuant to a Registration Statement.
4. OBLIGATIONS OF THE INVESTOR.
The Investor agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in Section 3(f) or
the first sentence of 3(e), the Investor will immediately discontinue
disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until the Investor's
receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(e) or receipt of notice that no supplement or
amendment is required. Notwithstanding anything to the contrary, the
6
Company shall cause its transfer agent to deliver unlegended
certificates for shares of Common Stock to a transferee of the Investor
in accordance with the terms of the Securities Purchase Agreement in
connection with any sale of Registrable Securities with respect to
which the Investor has entered into a contract for sale 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(f) or the first sentence of
3(e) and for which the Investor has not yet settled.
5. EXPENSES OF REGISTRATION.
All 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, legal and accounting fees shall be paid by the Company.
6. INDEMNIFICATION.
With respect to Registrable Securities which are included in a
Registration Statement under this Agreement:
To the fullest extent permitted by law, the Company will, and hereby
does, indemnify, hold harmless and defend the Investor, the directors,
officers, partners, employees, agents, representatives of, and each
Person, if any, who controls the Investor within 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, whether pending or
threatened, whether or not an indemnified party is or may be a party
thereto ("Indemnified Damages"), to which any of them may become
subject insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based
upon: (i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other "blue sky"
laws of any jurisdiction in which Registrable Securities are offered
("Blue Sky Filing"), or the omission or alleged omission to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; (ii) any untrue statement or alleged
untrue statement of a material fact contained in any final prospectus
(as amended or supplemented, if the Company files any amendment thereof
or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements
made therein, in light of the circumstances under which the statements
therein were made, not misleading; or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any
other law, including, without limitation, any state securities law, or
any rule or regulation there under relating to the offer or sale of the
Registrable Securities pursuant to a Registration Statement (the
matters in the foregoing clauses (i) through (iii) being, collectively,
"Violations"). The Company shall reimburse the Investor and each such
controlling person promptly as such expenses are incurred and are due
and payable, for any
7
legal fees or disbursements or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim.
In connection with a Registration Statement, the Investor agrees to
indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a), the Company, each of its
directors, each of its officers who signs the Registration Statement
and each Person, if any, who controls the Company within the meaning of
the 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
is based upon any Violation, in each case to the extent, and only to
the extent, that such Violation occurs in reliance upon and in
conformity with written information furnished to the Company by the
Investor expressly for use in connection with such Registration
Statement; and, subject to Section 6(d), the Investor will reimburse
any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such Claim; provided, however, that
the indemnity agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall not
apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Investor, which
consent shall not be unreasonably withheld; 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 the 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. Notwithstanding
anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(b) with respect to any prospectus
shall not inure to the benefit of any Indemnified Party if the untrue
statement or omission of material fact contained in the prospectus was
corrected and such new prospectus was delivered to the Investor prior
to the Investor's use of the prospectus to which the Claim relates.
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 fees and expenses of not more than one counsel
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 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
8
reasonably available to the Indemnified Party or Indemnified Person
which relates to such action or claim. The indemnifying party shall
keep the Indemnified Party or Indemnified Person fully apprised at all
times as to the status of the defense or any settlement negotiations
with respect thereto. No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its
prior written consent, provided, however, that the indemnifying party
shall not unreasonably withhold, delay or condition its consent. No
indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any
judgment or enter into any settlement or other compromise which does
not include as an unconditional term thereof the giving by the claimant
or plaintiff to such Indemnified Party or Indemnified Person of a
release from all liability in respect to such claim or litigation.
Following indemnification as provided for hereunder, the indemnifying
party shall be subrogated to all rights of the Indemnified Party or
Indemnified Person with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been
made. The failure to deliver written notice to the indemnifying party
within a reasonable time of the commencement of any such action shall
not relieve such indemnifying party of any liability to the Indemnified
Person or Indemnified Party under this Section 6, except to the extent
that the indemnifying party is prejudiced in its ability to defend such
action.
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.
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 seller of Registrable Securities
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
seller 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.
8. REPORTS UNDER THE EXCHANGE ACT.
With a view to making available to the Investor the benefits of Rule
144 promulgated under the Securities Act or any 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:
- make and keep public information available, as those terms are
understood and defined in Rule 144;
- 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
9
(it being understood that nothing herein shall limit the Company's
obligations under Section 6.3 of the Securities Purchase Agreement) and
the filing of such reports and other documents is required for the
applicable provisions of Rule 144; and
- furnish to the Investor so long as the Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule
144, the Securities Act and the Exchange Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports
and documents so filed by the Company, and (iii) such other information
as may be reasonably requested to permit the Investor to sell such
securities pursuant to Rule 144 without registration.
9. AMENDMENT OF REGISTRATION RIGHTS.
Provisions of this Agreement may be amended and the observance thereof
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only by a written agreement between
the Company and the Investor. Any amendment or waiver effected in
accordance with this Section 9 shall be binding upon the Investor and
the Company. 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.
10. MISCELLANEOUS.
A Person is deemed to be a holder of Registrable Securities whenever
such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices
or elections from two or more Persons with respect to the same
Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of
such Registrable Securities.
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, to:
Genesis Electronics Group, Inc. 0000 Xxxxxxxxx Xxxx. Xxxxx 000
Xxxxxxxxx, XX 00000 c/o Xxxxxx X. Xxxxxx Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Investor, to:
Tangiers Capital, LLC
000 Xxxx Xxxxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Managing Partner Telephone: 000-000-0000 Facsimile: 000-000-0000
10
Any party may change its address by providing written notice to the
other parties hereto at least five days prior to the effectiveness of
such change. Written confirmation of receipt (A) given by the recipient
of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile
machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) 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.
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.
The corporate laws of the State of California govern all issues
concerning the relative rights of the Company and the Investor. All
other questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by the internal laws
of the State of California, without giving effect to any choice of law
or conflict of law provision or rule (whether of the State of
California or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of California.
Each party hereby irrevocably submits to the non-exclusive jurisdiction
of the Superior Courts of the State of California, sitting in
California and the Federal District Court for the District of
California, 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.
This Agreement, the Securities Purchase Agreement and the Registration
Rights Agreement 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 and the
Securities Purchase Agreement supersede all prior agreements and
understandings among the parties hereto with respect to the subject
matter hereof and thereof.
11
This Agreement shall inure to the benefit of and be binding upon the
permitted successors and assigns of each of the parties hereto.
The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
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.
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 the 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.
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.
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.
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY: Genesis Electronics Group, Inc.
/s/Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
INVESTOR: Tangiers Investors, LP
/s/Xxxxxxx Xxxxxx
By: Tangiers Capital, LLC
Its: General Partner
14
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT
Attention:
Re: GENESIS ELECTRONICS GROUP, INC.
Ladies and Gentlemen:
We are counsel to GENESIS ELECTRONICS GROUP, INC. (the "Company"), and
have represented the Company in connection with that certain Securities
Purchase Agreement (the "Securities Purchase Agreement") entered into
by and between the Company and Tangiers Investors, LP (the "Investor")
pursuant to which the Company issued to the Investor shares of its
Common Stock, par value $0.001 per share (the "Common Stock"). Pursuant
to the Securities Purchase Agreement, the Company also has entered into
a Registration Rights Agreement with the Investor (the "Registration
Rights Agreement") pursuant to which the Company agreed, among other
things, to register the Registrable Securities (as defined in the
Registration Rights Agreement) under the Securities Act of 1933, as
amended (the "Securities Act"). In connection with the Company's
obligations under the Registration Rights Agreement, on ____________
____, the Company filed a Registration Statement on Form ________ (File
No. 333-_____________) (the "Registration Statement") with the
Securities and Exchange Commission (the "SEC") relating to the
Registrable Securities which names the Investor as a selling
stockholder thereunder.
In connection with the foregoing, we advise you that a member of the
SEC's staff has advised us by telephone that the SEC has entered an
order declaring the Registration Statement effective under the
Securities Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF
EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of a
member of the SEC's staff, that any stop order suspending its
effectiveness has been issued or that any proceedings for that purpose
are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the Securities Act pursuant
to the Registration Statement.
Very truly yours,
By:
cc: GENESIS ELECTRONICS GROUP, INC.
