REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”) is made and
entered into effective as of February 16, 2010 among Li3 Energy, Inc., a Nevada
corporation (the “Company”), Next Lithium Corp.,
an Ontario corporation (“Next”), and Next Lithium
(Nevada) Corp., a Nevada corporation (together with Next, the “Purchasers”).
RECITALS:
WHEREAS,
the Company and the Purchasers are parties to the Asset Purchase Agreement,
dated as of February 16, 2010 (the “Asset Purchase Agreement”), pursuant to
which the Company agreed to purchase and acquire from the Purchasers all of the
right, title and interest of the Purchasers in and to the Purchased Assets (as
defined in the Asset Purchase Agreement);
WHEREAS,
as consideration for the Purchased Assets, the Company agreed to issue to the
Purchasers an aggregate of 4,000,000 shares of the Company’s common stock (the
“Purchase Price
Shares”);
WHEREAS,
the closing of the transactions contemplated by the Asset Purchase Agreement
will have taken place on or prior to the Effective Date (as defined below);
and
WHEREAS,
in connection with the Asset Purchase Agreement, the Company agreed to provide
certain contingent demand registration rights related to the Purchase Price
Shares, on the terms set forth herein;
NOW,
THEREFORE, in consideration of the mutual promises, representations, warranties,
covenants, and conditions set forth herein, the parties mutually agree as
follows:
1. Certain
Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
“Blackout Period”
means, with respect to a registration, a period, in each case commencing on the
day immediately after the Company notifies the Purchasers that they are
required, because of the occurrence of an event of the kind described in Section
4(f) hereof, to suspend offers and sales of Registrable Shares during which the
Company, in the good faith judgment of its board of directors, determines
(because of the existence of, or in anticipation of, any acquisition, financing
activity, or other transaction involving the Company, or the unavailability for
reasons beyond the Company’s control of any required financial statements,
disclosure of information which is in its best interest not to publicly
disclose, or any other event or condition of similar significance to the
Company) that the registration and distribution of the Registrable Shares to be
covered by such Registration Statement, if any, would be seriously detrimental
to the Company and its stockholders and ending on the earlier of (1) the date
upon which the material non-public information commencing the Blackout Period is
disclosed to the public or ceases to be material and (2) such time as the
Company notifies the selling Holders that sales pursuant to such Registration
Statement or a new or amended Registration Statement may
resume.
“Business Day” means
any day of the year, other than a Saturday, Sunday, or other day on which the
Commission is required or authorized to close.
“Commission” means the
U. S. Securities and Exchange Commission or any other federal agency at the time
administering the Securities Act.
“Common Stock” means
the common stock, par value $0.001 per share, of the Company and any and all
shares of capital stock or other equity securities of: (i) the Company which are
added to or exchanged or substituted for the Common Stock by reason of the
declaration of any stock dividend or stock split, the issuance of any
distribution or the reclassification, readjustment, recapitalization or other
such modification of the capital structure of the Company; and (ii) any other
corporation, now or hereafter organized under the laws of any state or other
governmental authority, with which the Company is merged, which results from any
consolidation or reorganization to which the Company is a party, or to which is
sold all or substantially all of the shares or assets of the Company, if
immediately after such merger, consolidation, reorganization or sale, the
Company or the stockholders of the Company own equity securities having in the
aggregate more than 50% of the total voting power of such other
corporation.
“Effective Date” means
the date of the Closing (as defined in the Asset Purchase
Agreement).
“Exchange Act” means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder.
“Holder” means each
Purchaser or any of such Purchaser’s respective successors and Permitted
Assignees who acquire rights in accordance with this Agreement with respect to
any Registrable Shares directly or indirectly from a Purchaser or from any
Permitted Assignee.
“Majority Holders”
means at any time Holders representing a majority of the Registrable
Shares.
“Permitted Assignee”
means (a) with respect to a partnership, its partners or former partners in
accordance with their partnership interests, (b) with respect to a corporation,
its stockholders in accordance with their interest in the corporation, (c) with
respect to a limited liability company, its members or former members in
accordance with their interest in the limited liability company, (d) an entity
that is controlled by, controls, or is under common control with a transferor,
or (e) a party to this Agreement.
The terms
“register,”
“registered,”
and “registration” refer
to a registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
“Registrable Shares”
means the Purchase Price Shares, less any shares transferred by the Purchasers
to Geoxplor Corp. pursuant to the terms of the Consent to Assignment Agreement,
dated as of February 16, 2010, and excluding (i) any Registrable Shares that
have been publicly sold or may be immediately sold under the Securities Act
either pursuant to Rule 144 of the Securities Act or otherwise during any ninety
(90) day period; (ii) any Registrable Shares sold by a person in a transaction
pursuant to a registration statement filed under the Securities Act, or (iii)
any Registrable Shares that are at the time subject to an effective registration
statement under the Securities Act.
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“Registration
Statement” means the registration statement that the Company may be
required to file pursuant to Section 3(a) of this Agreement to register the
Registrable Shares.
“Rule 145” means Rule
145 promulgated by the Commission under the Securities Act, as such rule may be
amended or supplemented from time to time, or any similar successor rule that
may be promulgated by the Commission.
“Rule 144” means Rule
144 promulgated by the Commission under the Securities Act, as such rule may be
amended or supplemented from time to time, or any similar successor rule that
may be promulgated by the Commission.
“Rule 415” means Rule
415 promulgated by the Commission under the Securities Act, as such rule may be
amended or supplemented from time to time, or any similar successor rule that
may be promulgated by the Commission.
“Securities Act” means
the Securities Act of 1933, as amended, or any similar federal statute
promulgated in replacement thereof, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the
time.
“SEC Effective Date”
means the date the Registration Statement is declared effective by the
Commission.
“Trading Day” means
any day on which such national securities exchange, the Over-the-Counter
Bulletin Board or such other securities market or quotation system, which at the
time constitutes the principal securities market for the Common Stock, is open
for general trading of securities.
2. Term. This
Agreement shall terminate on the earlier of: (i) two years from the Effective
Date; (ii) such date on
which all shares of Registrable Shares held or entitled to be held upon
conversion by such Holder may immediately be sold under Rule 144 during any
ninety (90) day period; or (iii) unless terminated sooner
hereunder.
3. Registration.
(a) Demand Registration on Form
S-1. If following the 13th month after the Closing (as defined
in the Asset Purchase Agreement) the Registrable Shares cannot be resold under
Rule 144 without restriction at any time due to the Company’s status as a former
“shell” company and its failure to file required reports with the
Commission, and not because of any fault of any Purchaser, then the Company
shall file with the Commission a Registration Statement on Form S-1, or other
applicable form, relating to the resale by the Holders of all of the Registrable
Shares, and the Company shall use its commercially reasonable efforts to cause
such Registration Statement to be declared effective; provided, that the
Company shall not be obligated to effect any such registration, qualification or
compliance pursuant to this Section, or keep such registration effective
pursuant to the terms hereunder in any particular jurisdiction in which the
Company would be required to qualify to do business as a foreign corporation or
as a dealer in securities under the securities laws of such jurisdiction or to
execute a general consent to service of process in effecting such registration,
qualification or compliance, in each case where it has not already done
so. Notwithstanding the foregoing, in the event that the Commission
limits the amount of Registrable Shares that may be sold, the Company may scale
back from the Registration Statement such number of Registrable Shares on a
pro-rata basis. In such event, the Company shall give the Purchasers
prompt notice of the number of Registrable Shares excluded
therein.
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(b) Other
Registrations. Before such date that is six months following
the SEC Effective Date, the Company will not, without the prior written consent
of the Majority Holders, file any other registration statement with the
Commission or request the acceleration of any other registration statement filed
with the Commission, and during any time subsequent to the SEC Effective Date
when the Registration Statement for any reason is not available for use by any
Holder for the resale of any Registrable Shares, the Company shall not, without
the prior written consent of the Majority Holders, file any other registration
statement or any amendment thereto with the Commission under the Securities Act
or request the acceleration of the effectiveness of any other registration
statement previously filed with the Commission, other than (i) any registration
statement on Form S-8 or Form S-4 and (ii) any registration statement or
amendment which the Company is required to file or as to which the Company is
required to request acceleration pursuant to any obligation in effect on the
date of execution and delivery of this Agreement.
4. Registration Procedures for
Registrable Shares. The Company will keep each Holder
reasonably advised as to the filing and effectiveness of the Registration
Statement. At its expense with respect to the Registration Statement,
the Company will:
(a) prepare
and file with the Commission with respect to the Registrable Shares, a
Registration Statement on Form S-1, or any other form for which the Company then
qualifies or which counsel for the Company shall deem appropriate and which form
shall be available for the sale of the Registrable Shares in accordance with the
intended methods of distribution thereof, and use its commercially reasonable
efforts to cause such Registration Statement to become effective and shall
remain effective for a period of one year or for such shorter period ending on
the earlier to occur of (i) the sale of all Registrable Shares and (ii) the
availability under Rule 144 for the Holder to sell the Registrable Shares
without volume restriction (the “Effectiveness
Period”). Each Holder agrees to furnish to the Company a
completed questionnaire in the form attached to this Agreement as Annex A (a “Selling Shareholder
Questionnaire”) not later than three (3) Business Days following the date
on which such Holder receives draft materials of such Registration
Statement;
(b) if
the Registration Statement is subject to review by the Commission, promptly
respond to all comments and diligently pursue resolution of any comments to the
satisfaction of the Commission;
(c) prepare
and file with the Commission such amendments and supplements to such
Registration Statement as may be necessary to keep such Registration Statement
effective during the Effectiveness Period;
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(d) furnish,
without charge, to each Holder of Registrable Shares covered by such
Registration Statement (i) a reasonable number of copies of such Registration
Statement (including any exhibits thereto other than exhibits incorporated by
reference), each amendment and supplement thereto as such Holder may reasonably
request, (ii) such number of copies of the prospectus included in such
Registration Statement (including each preliminary prospectus and any other
prospectus filed under Rule 424 of the Securities Act) as such Holders may
reasonably request, in conformity with the requirements of the Securities Act,
and (iii) such other documents as such Holder may require to consummate the
disposition of the Registrable Shares owned by such Holder, but only during the
Effectiveness Period;
(e) use
its commercially reasonable efforts to register or qualify such registration
under such other applicable securities laws of such jurisdictions as any Holder
of Registrable Shares covered by such Registration Statement reasonably requests
and as may be necessary for the marketability of the Registrable Shares (such
request to be made by the time the applicable Registration Statement is deemed
effective by the Commission) and do any and all other acts and things necessary
to enable such Holder to consummate the disposition in such jurisdictions of the
Registrable Shares owned by such Holder; provided, that the
Company shall not be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph, (ii) subject itself to taxation in any such jurisdiction, or (iii)
consent to general service of process in any such jurisdiction.
(f) as
promptly as practicable after becoming aware of such event, notify each Holder
of Registrable Shares, the disposition of which requires delivery of a
prospectus relating thereto under the Securities Act, of the happening of any
event, which comes to the Company’s attention, that will after the occurrence of
such event cause the prospectus included in such Registration Statement, if not
amended or supplemented, to contain an untrue statement of a material fact or an
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading and the Company shall promptly
thereafter prepare and furnish to such Holder a supplement or amendment to such
prospectus (or prepare and file appropriate reports under the Exchange Act) so
that, as thereafter delivered to the purchasers of such Registrable Shares, such
prospectus shall not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading, unless suspension of the use of such
prospectus otherwise is authorized herein or in the event of a Blackout Period,
in which case no supplement or amendment need be furnished (or Exchange Act
filing made) until the termination of such suspension or Blackout
Period;
(g) comply,
and continue to comply during the Effectiveness Period, in all material respects
with the Securities Act and the Exchange Act and with all applicable rules and
regulations of the Commission with respect to the disposition of all securities
covered by such Registration Statement;
(h) as
promptly as practicable after becoming aware of such event, notify each Holder
of Registrable Shares being offered or sold pursuant to the Registration
Statement of the issuance by the Commission of any stop order or other
suspension of effectiveness of the Registration Statement;
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(i) use
its commercially reasonable efforts to cause all the Registrable Shares covered
by the Registration Statement to be quoted on the OTC Bulletin Board or such
other principal securities market on which securities of the same class or
series issued by the Company are then listed or traded;
(j) provide
a transfer agent and registrar, which may be a single entity, for the shares of
Common Stock at all times;
(k) cooperate
with the Holders of Registrable Shares being offered pursuant to the
Registration Statement to issue and deliver, or cause its transfer agent to
issue and deliver, certificates representing Registrable Shares to be offered
pursuant to the Registration Statement within a reasonable time after the
delivery of certificates representing the Registrable Shares to the transfer
agent or the Company, as applicable, and enable such certificates to be in such
denominations or amounts as the Holders may reasonably request and registered in
such names as the Holders may request;
(l) during
the Effectiveness Period, refrain from bidding for or purchasing any Common
Stock or any right to purchase Common Stock or attempting to induce any person
to purchase any such security or right if such bid, purchase or attempt would in
any way limit the right of the Holders to sell Registrable Shares by reason of
the limitations set forth in Regulation M of the Exchange Act; and
(m) take
all other reasonable actions necessary to expedite and facilitate the
disposition by the Holders of the Registrable Shares pursuant to the
Registration Statement during the term of this Agreement.
5. Suspension of Offers and
Sales. Each Holder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
4(f) hereof or of the commencement of a Blackout Period, such Holder shall
discontinue the disposition of Registrable Shares included in the Registration
Statement until such Holder’s receipt of the copies of the supplemented or
amended prospectus contemplated by Section 4(f) hereof or notice of the end of
the Blackout Period, and, if so directed by the Company, such Holder shall
deliver to the Company (at the Company’s expense) all copies (including, without
limitation, any and all drafts), other than permanent file copies, then in such
Holder’s possession, of the prospectus covering such Registrable Shares current
at the time of receipt of such notice.
6. Registration
Expenses. The Company shall pay all expenses in connection
with any registration obligation provided herein, including, without limitation,
all registration, filing, stock exchange fees, printing expenses, all fees and
expenses of complying with applicable securities laws, and the fees and
disbursements of counsel for the Company and of its independent accountants;
provided, that,
in any underwritten registration, each party shall pay for its own underwriting
discounts and commissions and transfer taxes. Except as provided in this Section
and Section 9, the Company shall not be responsible for the expenses of any
attorney or other advisor employed by a Holder.
7. Assignment of
Rights. No Holder may assign its rights under this Agreement
to any party without the prior written consent of the Company; provided, however, that any
Holder may assign its rights under this Agreement without such consent to a
Permitted Assignee as long as (a) such transfer or assignment is effected in
accordance with applicable securities laws; (b) such transferee or assignee
agrees in writing to become subject to the terms of this Agreement; and (c) such
Holder notifies the Company in writing of such transfer or assignment, stating
the name and address of the transferee or assignee and identifying the
Registrable Shares with respect to which such rights are being transferred or
assigned.
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8. Information by
Holder. Holders included in any registration shall furnish to
the Company such information as the Company may reasonably request in writing
regarding such Holders and the distribution proposed by such Holders including
an updated Selling Shareholder Questionnaire if requested by the
Company.
9. Indemnification.
(a) In
the event of the offer and sale of Registrable Shares under the Securities Act,
the Company shall, and hereby does, indemnify and hold harmless, to the fullest
extent permitted by law, each Holder, its directors, officers, partners, each
other person who participates as an underwriter in the offering or sale of such
securities, and each other person, if any, who controls or is under common
control with such Holder or any such underwriter within the meaning of Section
15 of the Securities Act, against any losses, claims, damages or liabilities,
joint or several, and expenses to which the Holder or any such director,
officer, partner or underwriter or controlling person may become subject under
the Securities Act or otherwise, insofar as such losses, claims, damages,
liabilities or expenses (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement of any material fact contained in any registration statement prepared
and filed by the Company under which Registrable Shares were registered under
the Securities Act, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission to state therein a material fact required to be stated or necessary to
make the statements therein in light of the circumstances in which they were
made not misleading, and the Company shall reimburse the Holder, and each such
director, officer, partner, underwriter and controlling person for any legal or
any other expenses reasonably incurred by them in connection with investigating,
defending or settling any such loss, claim, damage, liability, action or
proceeding; provided, that such
indemnity agreement found in this Section 9(a) shall in no event exceed the fair
market value of the Registrable Shares as of the Closing, except in the case of
fraud or willful misconduct by the Company; and provided further,
that the Company shall not be liable in any such case (i) to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement in or omission
from such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by a Holder for use
in the preparation thereof or (ii) if the person asserting any such loss, claim,
damage, liability (or action or proceeding in respect thereof) who purchased the
Registrable Shares that are the subject thereof did not receive a copy of an
amended preliminary prospectus or the final prospectus (or the final prospectus
as amended or supplemented) at or prior to the written confirmation of the sale
of such Registrable Shares to such person because of the failure of such Holder
or underwriter to so provide such amended preliminary or final prospectus and
the untrue statement or omission of a material fact made in such preliminary
prospectus was corrected in the amended preliminary or final prospectus (or the
final prospectus as amended or supplemented). Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
the Holders, or any such director, officer, partner, underwriter or controlling
person and shall survive the transfer of such shares by the Holder.
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(b) As
a condition to including Registrable Shares in any registration statement filed
pursuant to this Agreement, each Holder agrees to be bound by the terms of this
Section 9 and to indemnify and hold harmless, to the fullest extent permitted by
law, the Company, each of its directors, officers, partners, legal counsel and
accountants and each underwriter, if any, and each other person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Company or any such director or officer or controlling person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) that arises out of or is based upon an untrue
statement in or omission from such registration statement, any such preliminary
prospectus, final prospectus, summary prospectus, amendment or supplement in
reliance upon and in conformity with written information furnished by the Holder
for use in the preparation thereof, and such Holder shall reimburse the Company,
and such Holders, directors, officers, partners, legal counsel and accountants,
persons, underwriters, or control persons, each such director, officer, and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating, defending, or settling any such loss, claim,
damage, liability, action, or proceeding; provided, however, that such
indemnity agreement found in this Section 9(b) shall in no event exceed the net
proceeds received by such Holder as a result of the sale of Registrable Shares
pursuant to such registration statement, except in the case of fraud or willful
misconduct. Such indemnity shall remain in full force and effect,
regardless of any investigation made by or on behalf of the Company or any such
director, officer or controlling person and shall survive the transfer by any
Holder of such shares.
(c) Promptly
after receipt by an indemnified party of notice of the commencement of any
action or proceeding involving a claim referred to in this Section (including
any governmental action), such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party, give written notice to the
indemnifying party of the commencement of such action; provided, 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, except to
the extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an
indemnified party, unless in the reasonable judgment of counsel to such
indemnified party a conflict of interest between such indemnified and
indemnifying parties may exist or the indemnified party may have defenses not
available to the indemnifying party in respect of such claim, the indemnifying
party shall be entitled to participate in and to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified party and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof, unless in such indemnified
party’s reasonable judgment a conflict of interest between such indemnified and
indemnifying parties arises in respect of such claim after the assumption of the
defenses thereof or the indemnifying party fails to defend such claim in a
diligent manner, other than reasonable costs of
investigation. Neither an indemnified nor an indemnifying party shall
be liable for any settlement of any action or proceeding effected without its
consent. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any
settlement, which 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 of such claim or litigation. Notwithstanding
anything to the contrary set forth herein, and without limiting any of the
rights set forth above, in any event any party shall have the right to retain,
at its own expense, counsel with respect to the defense of a claim. 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 defense of such claim and
litigation resulting therefrom.
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(d) If
an indemnifying party does or is not permitted to assume the defense of an
action pursuant to Sections 9(c) or in the case of the expense reimbursement
obligation set forth in Sections 9(a) and (b), the indemnification required by
Sections 9(a) and 9(b) shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills received or
expenses, losses, damages, or liabilities are incurred.
(e) If
the indemnification provided for in Section 9(a) or 9(b) 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 herein, the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall (i) contribute to the amount paid or payable by such indemnified party as
a result of such loss, liability, claim, damage or expense as is appropriate to
reflect the proportionate relative fault of the indemnifying party on the one
hand and the indemnified party on the other (determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission relates to information supplied by the indemnifying party or the
indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission), or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, not only the proportionate relative
fault of the indemnifying party and the indemnified party, but also the relative
benefits received by the indemnifying party on the one hand and the indemnified
party on the other, as well as any other relevant equitable considerations. No
indemnified party guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
indemnifying party who was not guilty of such fraudulent
misrepresentation.
(f) Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection with an underwritten
public offering are in conflict with the foregoing provisions, the provisions in
the underwriting agreement shall control.
(g) Other
Indemnification. Indemnification similar to that specified in
this Section (with appropriate modifications) shall be given by the Company and
each Holder of Registrable Shares with respect to any required registration or
other qualification of securities under any federal or state law or regulation
or governmental authority other than the Securities Act.
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10. Independent Nature of Each
Purchaser’s Obligations and Rights. The obligations of each
Purchaser under this Agreement are several and not joint with the obligations of
any other Purchaser, and each Purchaser shall not be responsible in any way for
the performance of the obligations of any other Purchaser under this Agreement.
Nothing contained herein and no action taken by any Purchaser pursuant hereto,
shall be deemed to constitute such Purchasers as a partnership, an association,
a joint venture, or any other kind of entity, or create a presumption that the
Purchasers are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement. Each Purchaser
shall be entitled to independently protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.
11. Reports Under the Exchange
Act. With a view to making available to the Purchasers the
benefits of Rule 144 and any other rule or regulation of the SEC that may at any
time permit the Purchasers to sell the Registrable Shares to the public without
registration, the Company agrees: (i) to make and keep public information
available as those terms are understood in Rule 144, (ii) to file with the SEC
in a timely manner all reports and other documents required to be filed by an
issuer of securities registered under the Securities Act or the Exchange Act
pursuant to Rule 144, (iii) as long as any Purchaser owns any Registrable
Shares, to furnish in writing upon such Purchaser’s request a written statement
by the Company confirming whether it has complied with the reporting
requirements of Rule 144 and of the Securities Act and the Exchange Act, and to
furnish to such Purchaser a copy of the most recent annual or quarterly report
of the Company, and such other reports and documents so filed by the Company as
may be reasonably requested in availing such Purchaser of any rule or regulation
of the SEC permitting the selling of any such Registrable Shares without
registration and (iv) to undertake any additional actions reasonably necessary
to maintain the availability of the use of Rule 144.
12. Miscellaneous.
(a) Governing Law. This
Agreement shall be governed by and construed in accordance with the laws of the
United States of America and the State of New York, both substantive and
remedial, without regard to New York conflicts of law principles. Any judicial
proceeding brought against either of the parties to this Agreement or any
dispute arising out of this Agreement or any matter related hereto shall be
brought in the courts of the State of New York, New York County, or in the
United States District Court for the Southern District of New York and, by its
execution and delivery of this Agreement, each party to this Agreement accepts
the jurisdiction of such courts. The foregoing consent to jurisdiction shall not
be deemed to confer rights on any person other than the parties to this
Agreement.
(b) Remedies. In
the event of a breach by the Company or by a Holder of any of their respective
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, shall be entitled to
specific performance of its rights under this Agreement. The Company
and each Holder agree that monetary damages would not provide adequate
compensation for any losses incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific performance in respect of such breach, it shall not assert
or shall waive the defense that a remedy at law would be adequate.
10
(c) Successors and
Assigns. Except as otherwise provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
Permitted Assignees, executors and administrators of the parties
hereto.
(d) No Inconsistent
Agreements. The Company has not entered, as of the date
hereof, and shall not enter, on or after the date of this Agreement, into any
agreement with respect to its securities that would have the effect of impairing
the rights granted to the Holders in this Agreement or otherwise conflicts with
the provisions hereof.
(e) Entire
Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof.
(f) Notices, etc. All
notices or other communications which are required or permitted under this
Agreement shall be in writing and sufficient if delivered by hand, by facsimile
transmission, by registered or certified mail, postage pre-paid, by electronic
mail, or by courier or overnight carrier, to the persons at the addresses set
forth below (or at such other address as may be provided hereunder), and shall
be deemed to have been delivered as of the date so delivered:
If to the
Company to:
Xx. Xxxxx
x Xxxxxx 000 Xx. 000
Xxx
Xxxxxx, Xxxx, Xxxx
Attention: Xxxx
Xxxxx, Chief Executive Officer
Facsimile:
Telephone:
00-0-000-0000
with copy to:
Gottbetter
& Partners, LLP
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
XX 00000
Attention: Xxxx
X. Xxxxxxxxxx, Esq.
Facsimile: (000)
000-0000
If to the
Purchasers:
To each
Purchaser at the address set forth on the signature page hereto;
or at
such other address as any party shall have furnished to the other parties in
writing.
11
(g) 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 any similar breach or default thereunder
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore 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 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.
(h) Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
enforceable against the parties actually executing such counterparts, and all of
which together shall constitute one instrument. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such facsimile
signature page were an original thereof.
(i) Severability. In
the case any provision of this 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.
(j) Amendments. The
provisions of this Agreement may be amended at any time and from time to time,
and particular provisions of this Agreement may be waived, with and only with an
agreement or consent in writing signed by the Company and the Majority Holders.
The Purchasers acknowledge that by the operation of this Section, the Majority
Holders may have the right and power to diminish or eliminate all rights of the
Purchasers under this Agreement.
(k) Limitation on Subsequent
Registration Rights. After the date of this Agreement, the
Company shall not, without the prior written consent of the Majority Holders,
enter into any agreement with any holder or prospective holder of any securities
of the Company that would grant such holder registration rights senior or equal
to those granted to the Holders hereunder.
[SIGNATURE
PAGES FOLLOW]
12
This
Registration Rights Agreement is hereby executed as of the date first above
written.
|
COMPANY:
|
||
|
By:
|
/s/
Xxxx Xxxxx
|
|
|
Name:
|
Xxxx
Xxxxx
|
|
|
Title:
|
Chief
Executive Officer
|
|
[SIGNATURE
PAGE OF PURCHASERS FOLLOWS]
13
This
Registration Rights Agreement is hereby executed by the undersigned, as a
Purchaser thereunder, as of the 16th day of February, 2010.
|
NEXT
LITHIUM CORP.
|
|
|
By:
|
/s/
Xxxxx X. XxxXxxxxxxx
|
|
Name:
|
Xxxxx
X. XxxXxxxxxxx
|
|
Title:
|
President
|
|
Address
for notices:
|
|
|
City State Zip
Code
|
|
|
NEXT
LITHIUM (NEVADA) CORP.
|
|
|
By:
|
/s/
Xxxxx X. XxxXxxxxxxx
|
|
Name:
|
Xxxxx
X. XxxXxxxxxxx
|
|
Title:
|
President
|
|
Address
for notices:
|
|
|
City
State Zip
Code
|
|
14
Annex
A
Selling
Securityholder Notice and Questionnaire
The
undersigned beneficial owner of Registrable Shares of Li3 Energy, Inc., a Nevada
corporation (the “Company”),
understands that the Company has filed or intends to file with the Securities
and Exchange Commission a registration statement (the “Registration
Statement”) for the registration and resale under Rule 415 of the
Securities Act of 1933, as amended, of the Registrable Shares, in accordance
with the terms of the Registration Rights Agreement (the “Registration Rights
Agreement”) to which this document is annexed. A copy of the
Registration Rights Agreement is available from the Company upon request at the
address set forth below. All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights
Agreement.
Certain
legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly,
holders and beneficial owners of Registrable Shares are advised to consult their
own securities law counsel regarding the consequences of being named or not
being named as a selling securityholder in the Registration Statement and the
related prospectus.
NOTICE
The
undersigned beneficial owner (the “Selling
Securityholder”) of Registrable Shares hereby elects to include the
Registrable Shares owned by it in the Registration Statement.
The
undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
QUESTIONNAIRE
1. Name:
|
|
(a)
|
Full
Legal Name of Selling Securityholder
|
|
|
(b)
|
Full
Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Shares are held:
|
|
|
(c)
|
Full
Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose
of the securities covered by the questionnaire):
|
2. Address
for Notices to Selling Securityholder:
|
Telephone: ________________________________________
Fax: _____________________________________________
|
|
Email:
______________________________________________________________________________________________
|
|
Contact
Person:
______________________________________________________________________________________
|
3. Broker-Dealer
Status:
|
|
(a)
|
Are
you a broker-dealer?
|
Yes ¨ No ¨
|
|
(b)
|
If
“yes” to Section 3(a), did you receive your Registrable Shares as
compensation for investment banking services to the
Company?
|
Yes ¨ No ¨
|
Note:
|
If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
|
|
|
(c)
|
Are
you an affiliate of a
broker-dealer?
|
Yes ¨ No ¨
|
|
(d)
|
If
you are an affiliate of a broker-dealer, do you certify that you bought
the Registrable Shares in the ordinary course of business, and at the time
of the purchase of the Registrable Shares to be resold, you had no
agreements or understandings, directly or indirectly, with any person to
distribute the Registrable Shares?
|
Yes ¨ No ¨
|
Note:
|
If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
|
4. Beneficial
Ownership of Securities of the Company Owned by the Selling
Securityholder:
Except
as set forth below in this Item 4, the undersigned is not the beneficial or
registered owner of any securities of the Company other than the securities
issuable pursuant to the Asset Purchase Agreement.
|
|
(a)
|
Type
and Amount of other securities (other than the Registrable Shares)
beneficially owned by the Selling Securityholder:
|
2
5. Relationships
with the Company:
Except
as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Company (or its predecessors or affiliates)
during the past three years.
State any
exceptions here:
|
|
|
|
The
undersigned agrees to promptly notify the Company of any inaccuracies or changes
in the information provided herein that may occur subsequent to the date hereof
at any time while the Registration Statement remains effective.
By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 5 and the inclusion of such
information in the Registration Statement and the related prospectus and any
amendments or supplements thereto. The undersigned understands that
such information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus.
IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Selling Securityholder Notice and Questionnaire to be executed and delivered
either in person or by its duly authorized agent.
|
Beneficial Owner:
|
|
By:
|
||
|
Name:
|
||
|
Title:
|
PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:
Gottbetter
& Partners, LLP
000
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx,
XX 00000
Attention: Xxxxxx
X. XxXxxxxx
Facsimile: (000)
000-0000
3
