GEOGLOBAL RESOURCES INC. REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”) is made and
entered into as of the 19 day of June, 2007 between GeoGlobal Resources Inc.,
a
Delaware corporation (the “Company”), and Primary Capital Inc.
and Xxxxx, Xxxxx & Company Limited (the
“Agents”).
RECITALS
WHEREAS
the Company proposes to issue to the Subscribers (as defined herein) units
comprised of common shares of the Company (“Common Shares”) and
common share purchase warrants entitling the Subscribers to subscribe for common
shares of the Company (“Warrant Shares”) pursuant to
subscription agreements as described in the Agency Agreement dated June 19,
2007
between the Company and the Agents (the “Agency
Agreement”);
AND
WHEREAS the Company proposes to issue to the Agents compensation
options exercisable for units comprised of common shares of the Company
(“Compensation Shares”) pursuant to the Agency
Agreement;
AND
WHEREAS, pursuant to the Agency Agreement, the Company has agreed to
effect the registration of the Common Shares, Warrant Shares and Compensation
Shares on the terms and subject to the conditions set forth therein and
herein;
NOW
THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the parties hereby agree as
follows:
1. REGISTRATION
RIGHTS.
1.1 Certain
Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below:
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(a)
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“Closing”
shall mean the closing of the initial sale of the Registrable
Securities;
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(b)
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“Commission”
shall mean the United States Securities and Exchange Commission or
any
other federal agency at the time administering the Securities
Act;
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(c)
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“Exchange
Act” shall mean the United States Securities Exchange Act of
1934, as amended;
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(d)
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“Holder”
shall mean any holder of Registrable Securities and any holder of
Registrable Securities to whom the registration rights conferred
by this
Agreement have been transferred in compliance with Section 1.8
hereof;
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(e)
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“Registrable
Securities” shall mean (i) the Common Shares, (ii) the Warrant
Shares, (iii) the Compensation Shares, and (iv) any common shares
of the
Company issued as a dividend or other distribution with respect to
or in
exchange for or in replacement of the shares referenced in (i), (ii)
and
(iii) above, provided, however, that Registrable Securities shall
not
include (a) any common shares of the Company which have previously
been
registered or which have been sold to the public either pursuant
to a
registered public offering or Rule 144, or (b) any common shares
of the
Company held by a Holder that may immediately be sold under Rule
144
during any 90-day period and including Rule
144(k);
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(f)
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The
terms “register,” “registered” and
“registration” shall refer to a registration effected by
preparing and filing the Registration Statement, and the declaration
or
ordering of the effectiveness of such registration
statement;
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(g)
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“Registration
Expenses” shall mean all expenses incurred in effecting any
registration pursuant to this Agreement, including, without limitation,
all registration, qualification and filing fees, printing expenses,
escrow
fees, fees and disbursements of counsel for the Company, blue sky
fees and
expenses, fees and disbursements of counsel for the Holders (which
shall
not exceed US$10,000) and expenses of any regular or special audits
incident to or required by any such registration, but shall not include
Selling Expenses, and the compensation of regular employees of the
Company, which shall be paid in any event by the
Company;
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(h)
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“Registration
Statement” shall mean the registration statement filed pursuant
to the Securities Act relating to the resale of the Registrable Securities
by the Holders, and all amendments and supplements to such Registration
Statement, including pre- and post-effective
amendments;
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(i)
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“Rule
144” shall mean Rule 144 as promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time,
or any
similar successor rule that may be promulgated by the
Commission;
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(j)
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“Securities
Act” shall mean the United States Securities Act of
1933, as amended;
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(k)
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“Selling
Expenses” shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the sale of Registrable
Securities; and
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(l)
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“Subscribers”
shall mean the persons buying Registrable Securities pursuant to
subscription agreements in the form agreed upon by the Agents and
the
Company.
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1.2 Registration
(a) The
Company covenants to prepare and file with the Commission, as promptly as
practicable following the Closing and in any event within 60 days after the
Closing, a Registration Statement for an offering to be made on a continuous
shelf basis following the date of effectiveness covering the resale of the
Registrable Securities by the Holders. The Registration Statement
shall be on Form S-3 under the Securities Act or another appropriate form
selected by the Company permitting registration of the resale of the Registrable
Securities by the Holders from time to time. The Company shall use
its reasonable best efforts to cause the Registration Statement to become
effective pursuant to the Securities Act within 90 days after the
Closing.
(b) The
Registration Statement shall not be deemed to have become effective under the
Securities Act (i) unless it has been filed and has been declared effective
under the Securities Act by the Commission and remains effective pursuant to
the
Securities Act with respect to the disposition of all Registrable Securities
on
a continuous shelf basis until all such Registrable Securities are sold or
cease
to be Registrable Securities, or (ii) if the offering of the Registrable
Securities pursuant to such Registration Statement is interfered with by any
stop order, cease trade order, injunction or other order or requirement of
the
Commission or any other governmental agency, court or stock
exchange.
1.3 Expenses
of Registration. The Company shall pay all Registration
Expenses whether or not such registration shall become effective.
1.4 Registration
Procedures. In the case of the registration effected by the
Company pursuant to this Agreement, the Company will keep each Holder advised
in
writing as to the initiation of such registration and as to the completion
thereof. At its expense, the Company will use its best efforts
to:
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(a)
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Keep
such registration effective until all such Registrable Securities
are sold
or cease to be Registrable
Securities;
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(b)
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Prepare
and file with the Commission such amendments and supplements to such
Registration Statement and the prospectus used in connection with
such
registration statement as may be necessary to comply with the provisions
of the Securities Act with respect to the disposition of all Registrable
Securities covered by such Registration
Statement;
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(c)
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Furnish
such number of prospectuses and other documents incident thereto,
including any amendment of or supplement to the prospectus, as a
Holder
from time to time may reasonably
request;
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(d)
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Notify
each seller of Registrable Securities covered by such Registration
Statement at any time when a prospectus relating thereto is required
to be
delivered under the Securities Act of the happening of any event
as a
result of which the prospectus included in such registration statement,
as
then in effect, (i) no longer meets the requirements of Section 10(a)(3)
of the Securities Act, or (ii) includes an untrue statement of a
material
fact or omits to state a material fact required to be stated therein
or
necessary to make the statements therein not misleading or incomplete
in
the light of the circumstances then existing, and that offers and
sales of
Registrable Securities in reliance on the prospectus included in
the
Registration Statement must cease. At the request of any such
seller, the Company shall prepare and furnish to such seller a reasonable
number of copies of a supplement to or an amendment of such prospectus
as
may be necessary so that, as thereafter delivered to the purchasers
of
such shares, such prospectus used shall meet the requirements of
Section
10(a)(3) of the Securities Act, or not include an 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 not misleading
or
incomplete in the light of the circumstances then
existing;
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(e)
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Cause
all such Registrable Securities registered pursuant hereunder to
be listed
on each securities exchange on which similar securities issued by
the
Company are then listed;
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(f)
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Use
its best efforts to obtain all other approvals, consents, exemptions
or
authorizations from such governmental agencies or authorities as
may be
necessary to enable the Holders to consummate the disposition of
the
Registrable Securities;
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(g)
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Provide
a transfer agent and registrar for all Registrable Securities registered
pursuant to the Registration Statement and a CUSIP number for all
such
Registrable Securities, in each case not later than the effective
date of
such registration;
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(h)
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Otherwise
use its best efforts to comply with all applicable rules and regulations
of the Commission, and make available to its security holders, as
soon as
reasonably practicable, an earnings statement covering the period
of at
least 12 months, but not more than 18 months, beginning with the
first
month after the effective date of the Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a)
of the
Securities Act;
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(i)
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Subject
to compliance with the requirements of the Securities Act, cooperate
with
the Holders to facilitate the timely preparation and delivery of
certificates not bearing any restrictive legends representing the
Registrable Securities sold pursuant to the Registration Statement,
and
cause such Registrable Securities to be issued in such denominations
and
registered in such names in accordance with instructions of the Holders
that are provided to the Company;
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(j)
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In
connection with any underwritten offering pursuant to a registration
statement filed pursuant to Section 1 hereof, the Company will enter
into
an underwriting agreement with an underwriter selected and retained
by the
selling security holders, and reasonably acceptable to the Company
in its
discretion, in form reasonably necessary to effect the offer and
sale of
common shares, provided such underwriting agreement contains reasonable
and customary provisions; and
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(k)
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Furnish,
on the date that such Registrable Securities are delivered to the
underwriters for sale, if such securities are being sold through
underwriters or, if such securities are not being sold through
underwriters, on the date that the Registration Statement becomes
effective, (i) an opinion, dated as of such date, of the counsel
representing the Company for the purposes of such registration, in
form
and substance as is customarily given to underwriters in a underwritten
public offering, and (ii) a letter, dated as of such date, from the
independent certified public accountants of the Company, in form
and
substance as is customarily given by the Company’s independent registered
public accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and if permitted by applicable
accounting standards, to the Holders participating in such
registration.
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1.5 Indemnification.
(a)
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The
Company will indemnify each Holder, each of its officers, directors
and
partners, legal counsel, and accountants and each person controlling
such
Holder within the meaning of Section 15 of the Securities Act, with
respect to which registration, qualification or compliance has been
effected pursuant to this Agreement, and each underwriter, if any,
and
each person who controls within the meaning of Section 15 of the
Securities Act any underwriter, against all expenses, claims, losses,
damages, and liabilities (or actions, proceedings or settlements
in
respect thereof) arising out of or based on any untrue statement
(or
alleged untrue statement) of a material fact contained in any prospectus
or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification
or compliance, or based on any omission (or alleged omission) to
state
therein a material fact required to be stated therein or necessary
to make
the statements therein not misleading, or any violation by the Company
of
the Securities Act or any rule or regulation thereunder applicable
to the
Company and relating to action or inaction required of the Company
in
connection with any such registration, qualification or compliance,
and
will reimburse each such Holder, each of its officers, directors,
partners, legal counsel, and accountants and each person controlling
such
Holder, each such underwriter, and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred
in
connection with investigating and defending or settling any such
claim,
loss, damage, liability or action, provided that the Company will
not be
liable in any such case to the extent that any such claim, loss,
damage,
liability or expense arises out of or is based on any untrue statement
or
omission based upon written information furnished to the Company
by such
Holder or underwriter and stated to be specifically for use
therein. It is agreed that the indemnity agreement contained in
this Section 1.5 shall not apply to amounts paid in settlement of
any such
loss, claim, damage, liability or action if such settlement is effected
without the consent of the Company (which consent shall not be
unreasonably withheld).
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(b)
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Each
Holder will, if Registrable Securities held by such Holder are included
in
the securities as to which such registration, qualification or compliance
is being effected, indemnify the Company, each of its directors,
officers,
partners, legal counsel, and accountants and each underwriter, if
any, of
the Company’s securities covered by such a registration statement, each
person who controls the Company or such underwriter within the meaning
of
Section 15 of the Securities Act, each other such Holder, and each
of
their officers, directors, and partners, and each person controlling
such
Holder, against all claims, losses, damages and liabilities (or actions
in
respect thereof) arising out of or based on any untrue statement
(or
alleged untrue statement) of a material fact contained in any such
registration statement, prospectus or other document, or any omission
(or
alleged omission) to state therein a material fact required to be
stated
therein or necessary to make the statements therein not misleading,
and
will reimburse the Company and such Holders, directors, officers,
partners, legal counsel, and accountants, persons, underwriters,
or
control persons for any legal or any other expenses reasonably incurred
in
connection with investigating or defending any such claim, loss,
damage,
liability or action, in each case to the extent, but only to the
extent,
that such untrue statement (or alleged untrue statement) or omission
(or
alleged omission) is made in such registration statement, prospectus
or
other document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically
for
use therein provided, however, that the obligations of such Holder
hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages or liabilities (or actions in respect thereof)
if
such settlement is effected without the consent of such Holder (which
consent shall not be unreasonably withheld); and provided that in
no event
shall any indemnity under this Section 1.5 exceed the gross proceeds
from
the offering received by such
Holder.
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(c)
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Each
party entitled to indemnification under this Section 1.5 (the
“Indemnified Party”) shall give notice to the party
required to provide indemnification (the “Indemnifying
Party”) promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of such claim
or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation
resulting therefrom, shall be approved by the Indemnified Party (whose
approval shall not be unreasonably withheld), and the Indemnified
Party
may participate in such defense at such party’s expense, and provided
further that the failure of any Indemnified Party to give notice
as
provided herein shall not relieve the Indemnifying Party of its
obligations under this Section 1.5, to the extent such failure is
not
prejudicial. No Indemnifying Party, in the defense of any such
claim or litigation, shall, except with the consent of each Indemnified
Party, consent to entry of any judgment or enter into any settlement
that
does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from
all
liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself
or the
claim in question as an Indemnifying Party may reasonably request
in
writing and as shall be reasonably required in connection with the
defense
of such claim and litigation resulting
therefrom.
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(d)
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If
the indemnification provided for in this Section 1.5 is held by a
court of
competent jurisdiction to be unavailable to an Indemnified Party
with
respect to any loss, liability, claim, damage or expense referred
to
therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid
or
payable by such Indemnified Party as a result of such loss, liability,
claim, damage or expense in such proportion as is appropriate to
reflect
the relative fault of the Indemnifying Party on the one hand and
of the
Indemnified Party on the other in connection with the statements
or
omissions that resulted in such loss, liability, claim, damage or
expense
as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party
shall be determined by reference to, among other things, whether
the
untrue or alleged untrue statement of a material fact or the omission
to
state a material fact relates to information supplied by the Indemnifying
Party or by the Indemnified Party and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
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(e)
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Notwithstanding
the foregoing, to the extent that the provisions on indemnification
and
contribution contained in the underwriting agreement entered into
in
connection with the underwritten public offering are in conflict
with the
foregoing provisions, the provisions in the underwriting agreement
shall
control.
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1.6 Information
by Holder. Each Holder shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification or compliance
referred to in this Agreement.
1.7 Rule
144 Reporting. With a view to making available the benefits
of certain rules and regulations of the Commission that may permit the sale
of
the Registrable Securities to the public without registration, the Company
agrees to use its best efforts to:
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(a)
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File
with the Commission in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange
Act at
any time it is subject to such reporting requirements;
and
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(b)
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So
long as a Holder owns any Registrable Securities, furnish to the
Holder
forthwith upon written request a written statement by the Company
as to
its compliance with the reporting requirements of Rule 144, and of
the
Securities Act and the Exchange Act, a copy of the most recent annual
or
quarterly report of the Company, and such other reports and documents
so
filed as a Holder may reasonably request in availing itself of any
rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration.
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1.8 Transfer
or Assignment of Registration Rights. The registration
rights granted to a Holder by the Company under this Agreement may be
transferred or assigned by a Holder provided that the Company is given written
notice at the time of or within a reasonable time after said transfer or
assignment, stating the name and address of the transferee or assignee and
identifying the Registrable Securities being transferred or
assigned. Such transferees (other than transferees that acquire the
Registrable Securities in a registered public offering or pursuant to a sale
under Rule 144) shall automatically be entitled to receive the benefits of
and
be conclusively deemed to have agreed to be bound by the terms and provisions
of
this Agreement as if it were a party hereto, and shall be deemed to be Holders
under this Agreement.
1.9 Delay
of Registration. No Holder shall have any right to take any
action to restrain, enjoin or otherwise delay any registration as the result
of
any controversy that might arise with respect to the interpretation or
implementation of this Section 1.
2. COVENANTS
OF THE COMPANY.
The
Company hereby covenants and agrees, so long as any Holder owns any Registrable
Securities, as follows:
2.1 Maintain
Listing. The Company covenants that, once it has registered
the Registrable Securities under the Securities Act, it shall use its reasonable
best efforts to maintain the listing of such securities on each stock exchange
or quotation system on which such securities are listed or quoted.
3. MISCELLANEOUS.
3.1 Governing
Law. This Agreement shall be governed by and be construed in
accordance with the laws of the State of Delaware and the laws of the United
States of America applicable therein and the parties hereto irrevocably attorn
to the jurisdiction of the courts of the State of Delaware.
3.2 Third
Party Beneficiaries. Each Holder (other than the Agents)
shall be a beneficiary of this Agreement and entitled to all of the rights
and
benefits of this Agreement as if such Holder was a party and signatory to this
Agreement and shall, for all purposes, be deemed a Holder under this
Agreement. If the Company shall so request, each Holder (other than
the Agents) shall agree in writing to be subject to all of the terms
hereof.
3.3 Successors
and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding upon, the
successors, assigns, heirs, executors and administrators of the parties
hereto.
3.4 Entire
Agreement; Amendment; Waiver. This Agreement (including the
Exhibit hereto) constitutes the full and entire understanding and agreement
between the parties with regard to the subjects hereof. Neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated,
except by a written instrument signed by the Company and the holders of at
least
50% of the Registrable Securities and any such amendment, waiver, discharge
or
termination shall be binding on all the Holders, but in no event shall the
obligation of any Holder hereunder be materially increased, except upon the
written consent of such Holder. This Agreement may be amended to add
additional stockholders as parties hereto with the consent of the Company
only.
3.5 Notices,
etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by United States
first-class mail, postage prepaid, sent by facsimile or delivered personally
by
hand or nationally recognized courier addressed (a) if to a Holder, as indicated
on the list of Holders attached hereto as Exhibit “A”, or at such other address
or facsimile number as such holder or permitted assignee shall have furnished
to
the Company in writing, or (b) if to the Company, at such address or facsimile
number as the Company shall have furnished to each Holder in
writing. All such notices and other written communications shall be
effective on the date of mailing, confirmed facsimile transfer or
delivery.
3.6 Delays
or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any Holder, upon any breach or default of the
Company under this Agreement shall impair any such right, power or remedy of
such Holder nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default
be
deemed a waiver of any other breach or default therefore or thereafter
occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any Holder of any breach or default under this
Agreement or any waiver on the part of any Holder of any provisions or
conditions of this Agreement must be made in writing and shall be effective
only
to the extent specifically set forth in such writing. All remedies,
either under this Agreement or by law or otherwise afforded to any Holder,
shall
be cumulative and not alternative.
3.7 Rights;
Severability. Unless otherwise expressly provided herein, a
Holder’s rights hereunder are several rights, not rights jointly held with any
of the other Holders. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of
the remaining provisions shall not in any way be affected or impaired
thereby.
3.8 Information
Confidential. Each Holder acknowledges that the information
received by them pursuant hereto may be confidential and for its use only,
and
it will not use such confidential information in violation of the Exchange
Act
or reproduce, disclose or disseminate such information to any other person
(other than its employees or agents having a need to know the contents of such
information, and its attorneys), except in connection with the exercise of
rights under this Agreement, unless the Company has made such information
available to the public generally or such Holder is required to disclose such
information by a governmental body.
3.9 Titles
and Subtitles. The titles of the paragraphs and
subparagraphs of this Agreement are for convenience of reference only and are
not to be considered in construing or interpreting this Agreement.
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3.10 Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall
be
an original, but all of which together shall constitute one
instrument.
IN
WITNESS WHEREOF, the parties hereto have executed this Registration Rights
Agreement effective as of the day and year first above written.
Per: /s/
Xxxxx X. Xxxx
Authorized
Signing
Officer
PRIMARY
CAPITAL INC.
Per: /s/
Xxxxx Xxxxxx
Authorized
Signing
Officer
XXXXX,
XXXXX & COMPANY LIMITED
Per: /s/
Xxxx Xxxxxxx
Authorized
Signing
Officer