REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made and entered
into as of the ___ day of ________ 2005 (the "Effective Date") between
Goldstrike, Inc., a Nevada corporation (the "Company"), and the parties set
forth on the signature page and Exhibit A hereto (each, a "Purchaser" and
collectively, the "Purchasers").
RECITALS:
WHEREAS, the Company and Gran Tierra have agreed in principle to enter
into a definitive Agreement of Merger and Plan of Reorganization pursuant to
which it is expected that a newly organized, wholly-owned Canadian subsidiary of
the Company will merge with and into Gran Tierra (the "Merger") and immediately
after which (the "Merger Effective Date"), it is currently expected that the
Company will change its name to a name determined by Gran Tierra. As of the date
of this Agreement, no definitive terms have been agreed to, and neither party is
currently bound to proceed with the Merger.
WHEREAS, to facilitate the continuing discussions related to the
completion of the Merger and to enable Gran Tierra to consummate the acquisition
of certain interests in producing properties in Argentina (the "Argentine
Acquisition"), the Company agreed to provide bridge financing to Gran Tierra.
The funds required to provide such financing were derived by the Company from
the proceeds received in a private placement offering ("PPO") of units
consisting of one share of Common Stock and a warrant to purchase 1/2 a share of
Common Stock for an exercise price of $0.625 per one-half share, and is
exercisable for a five year period from the date of issuance.
WHEREAS, on September 1, 2005, the Company completed an initial closing on
the PPO and derived proceeds of $8,337,916 from the sale of 10,422,395 units;
the Company and Gran Tierra completed the bridge financing providing for the
borrowing of Gran Tierra of up to $8,337,916; Gran Tierra borrowed $6,665,198.30
and Gran Tierra consummated the Argentine Acquisition for a cost of
approximately $7,000,000.
WHEREAS, on October 7, 2005, the Company conducted a second closing on the
PPO and derived proceeds of $1,015,576 from the sale of 1,269,470 units. The
proceeds derived from the second closing were used to pay sales commissions
aggregating $52,178 incurred in connection with the PPO and increase the amount
available for borrowing by Gran Tierra under the bridge financing from
$8,337,916 to $9,353,492.
WHEREAS, the Company is offering pursuant to Rule 506 of Regulation D of
the Securities Act of 1933, as amended (the "Securities Act"), to "accredited
investors" (as such term is defined in Rule 501(a) of Regulation D,) 2.5 million
units (the "Units") consisting of 1 share of the Company's common stock, par
value $.001 per share (the "Common Stock"), and a warrant exercisable for five
years to purchase one-half of a share of Common Stock at an exercise price of
$.625 per one-half share (the "Investor Warrants") at the purchase price of $.80
per Unit (the "Offering").
WHEREAS, the Offering terminates on the receipt of acceptable
subscriptions representing 2.5 million Units (the "Termination Date") and will
close as soon as practicable thereafter (the "Offering Closing Date").
WHEREAS, the investors in the Offering (the "Investors"), in connection
with their intent to purchase Units in the Offering, shall execute and deliver
Subscription Agreements (the "Subscription Agreements") and Investor
Questionnaires (the "Investor Questionnaires") memorializing the Investors'
agreement to purchase and the Company's agreement to sell the number of Units
set forth therein (the "Investor's Units") at the purchase price of $0.80 per
Unit (the "Purchase Price") and this Agreement, pursuant to which the Company
will provide certain registration rights related to the shares of Common Stock
underlying the Units and the Investor Warrants on the terms set forth herein
(the Subscription Agreements, Investor Questionnaires and the Registration
Rights Agreements are collectively referred to as the "Transaction Documents");
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:
"Approved Market" means the NASD Over-The-Counter Bulletin Board, the
Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange,
Inc. or the American Stock Exchange, Inc.
"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, pursuant to Section 4(f), to suspend offers and sales of
Registrable Securities 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 Securities 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 the Company will no longer delay such filing of the Registration Statement,
recommence taking steps to make such Registration Statement effective, or allow
sales pursuant to such Registration Statement to resume; provided, however, that
(a) the Company shall limit its use of Blackout Periods, in the aggregate, to 30
Trading Days in any 12-month period and (b) no Blackout Period may commence
sooner than 60 days after the end of a prior Blackout Period.
"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.
"Closing Date" means the Merger Closing Date.
"Commission" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.
"Common Stock" means the common stock, par value $.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.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Family Member" means (a) with respect to any individual, such
individual's spouse, any descendants (whether natural or adopted), any trust all
of the beneficial interests of which are owned by any of such individuals or by
any of such individuals together with any organization described in Section
501(c)(3) of the Internal Revenue Code of 1986, as amended, the estate of any
such individual, and any corporation, association, partnership or limited
liability company all of the equity interests of which are owned by those above
described individuals, trusts or organizations and (b) with respect to any
trust, the owners of the beneficial interests of such trust.
"Holder" means each Purchaser or any of such Purchaser's respective
successors and Permitted Assigns who acquire rights in accordance with this
Agreement with respect to the Registrable Securities directly or indirectly from
a Purchaser or from any Permitted Assignee.
"Investor Warrants" mean the warrants issued in relation to the Purchasers
purchase of Units in the private placement offering.
"Majority Holders" means at any time Holders representing a majority of
the Registrable Securities.
"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) with respect to an individual party, any Family Member of such
party, (e) an entity that is controlled by, controls, or is under common control
with a transferor or (f) a party to this Agreement.
"Purchase Price" means the Purchase Price per Unit set forth in the
Subscription 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 Securities" means the shares of Common Stock issued or
issuable to each Purchaser in connection with such Purchaser's purchase of Units
pursuant to the Subscription Agreements, including the shares of Common Stock
issuable on exercise of the Investor Warrants issued to the Purchasers in
connection with their purchase of Units but excluding (i) any Registrable
Securities that have been publicly sold or may be sold immediately without
registration under the Securities Act either pursuant to Rule 144 of the
Securities Act or otherwise; (ii) any Registrable Securities sold by a person in
a transaction pursuant to a registration statement filed under the Securities
Act or (iii) any Registrable Securities that are at the time subject to an
effective registration statement under the Securities Act.
"Registration Default Date" means the date that is 120 days following the
Registration Filing Date.
"Registration Default Period" means the period following the Registration
Default Date during which any Registration Event occurs and is continuing.
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"Registration Event" means the occurrence of any of the following events:
(a) the Company fails to file with the Commission the Registration
Statement on or before the Registration Filing Date (as defined in Section
3(a));
(b) the Registration Statement is not declared effective by the
Commission on or before the Registration Default Date;
(c) after the SEC Effective Date, sales cannot be made pursuant to
the Registration Statement for any reason (including without limitation by
reason of a stop order, or the Company's failure to update the Registration
Statement) except as excused pursuant to Section 3(a); or
(d) the Common Stock generally or the Registrable Securities
specifically are not listed or included for quotation on an Approved Market, or
trading of the Common Stock is suspended or halted on the Approved Market, which
at the time constitutes the principal market for the Common Stock, for more than
two full, consecutive Trading Days; provided, however, a Registration Event
shall not be deemed to occur if all or substantially all trading in equity
securities (including the Common Stock) is suspended or halted on the Approved
Market for any length of time.
"Registration Filing Date" means the date that is 120 days after the
Closing Date.
"Registration Statement" means the registration statement that the Company
is required to file pursuant to this Agreement to register the Registrable
Securities.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"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.
"Subscription Agreement" means the Subscription Agreement dated as of the
date hereof between the Company and the Purchaser setting forth the terms and
conditions of the Company's offer of Units and the Purchaser's purchase of
Units.
"Trading Day" means any day on which the national securities exchange, the
Nasdaq Stock Market, the NASD 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.
"Units" mean the units offered by the Company and purchased by the
Purchaser pursuant to the Subscription Agreement which consist of 1 share of
Common Stock and an Investor Warrant representing the right of the Purchaser to
purchase .5 share of Common Stock at the exercise price of $0.625 per .5 share.
2. Term. This Agreement shall continue in full force and effect for a
period of two years from the Effective Date, unless terminated sooner hereunder.
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3. Registration.
(a) Registration on Form SB-2. As promptly as reasonably practicable
after the date hereof, but in any event not later than 120 days after the
Closing Date (the "Registration Filing Date"), the Company shall file with the
Commission a registration statement on Form SB-2, or other applicable form,
relating to the resale by the Holders of all of the Registrable Securities, and
the Company shall use its commercially reasonable best efforts to cause such
registration statement to be declared effective within 120 days after the
Registration Filing Date; provided, however, 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: (i) 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 or blue sky 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 or
(ii) during any Blackout Period, in which case the Registration Filing Date
shall be extended to the date immediately following the last day of such
Blackout Period.
(b) Piggyback Registration. If the Company shall determine to
register for sale for cash any of its Common Stock, for its own account or for
the account of others (other than the Holders), other than (i) a registration
relating solely to employee benefit plans or securities issued or issuable to
employees, consultants (to the extent the securities owned or to be owned by
such consultants could be registered on Form S-8) or any of their Family Members
(including a registration on Form S-8) or (ii) a registration relating solely to
a Commission Rule 145 transaction, a registration on Form S-4 in connection with
a merger, acquisition, divestiture, reorganization, or similar event, the
Company shall promptly give to the Holders written notice thereof (and in no
event shall such notice be given less than 20 calendar days prior to the filing
of such registration statement), and shall, subject to Section 3(c), include in
such registration (a "Piggyback Registration"), all of the Registrable
Securities specified in a written request delivered by the Holder within 10
calendar days after receipt of such written notice from the Company. However,
the Company may, without the consent of the Holders, withdraw such registration
statement prior to its becoming effective if the Company or such other
stockholders have elected to abandon the proposal to register the securities
proposed to be registered thereby.
(c) Underwriting. If a Piggyback Registration is for a registered
public offering involving an underwriting, the Company shall so advise the
Holders. In such event, the right of any Holder to Piggyback Registration shall
be conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to include the Registrable
Securities they hold through such underwriting shall (together with the Company
and any other stockholders of the Company selling their securities through such
underwriting) enter into an underwriting agreement in customary form with the
underwriter selected for such underwriting by the Company or the selling
stockholders, as applicable. Notwithstanding any other provision of this
Section, if the underwriter or the Company determines that marketing factors
require a limitation of the number of shares of Common Stock or the amount of
other securities to be underwritten, the underwriter may exclude some or all
Registrable Securities from such registration and underwriting. The Company
shall so advise all Holders (except those Holders who failed to timely elect to
include their Registrable Securities through such underwriting or have indicated
to the Company their decision not to do so), and indicate to each such Holder
the number of shares of Registrable Securities that may be included in the
registration and underwriting, if any. The number of shares of Registrable
Securities to be included in such registration and underwriting shall be
allocated among such Holders as follows:
(i) In the event of a Piggyback Registration that is initiated by
the Company, the number of shares that may be included in the registration
and underwriting shall be allocated first to the Company and then, subject
to obligations and commitments existing as of the date hereof, to all
selling stockholders, including the Holders, who have requested to sell in
the registration on a pro rata basis according to the number of shares
requested to be included; and
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(ii) In the event of a Piggyback Registration that is initiated by
the exercise of demand registration rights by a stockholder or
stockholders of the Company (other than the Holders), then the number of
shares that may be included in the registration and underwriting shall be
allocated first to such selling stockholders who exercised such demand and
then, subject to obligations and commitments existing as of the date
hereof, to all other selling stockholders, including the Holders, who have
requested to sell in the registration, on a pro rata basis according to
the number of shares requested to be included.
No Registrable Securities excluded from the underwriting by reason of the
underwriter's marketing limitation shall be included in such registration. If
any Holder disapproves of the terms of any such underwriting, such Holder may
elect to withdraw their Registrable Securities therefrom by delivery of written
notice to the Company and the underwriter. The Registrable Securities so
withdrawn from such underwriting shall also be withdrawn from such registration;
provided, however, that, if by the withdrawal of such Registrable Securities a
greater number of Registrable Securities held by other Holders may be included
in such registration (up to the maximum of any limitation imposed by the
underwriters), then the Company shall offer to all Holders who have included
Registrable Securities in the registration the right to include additional
Registrable Securities pursuant to the terms and limitations set forth herein in
the same proportion used above in determining the underwriter limitation.
(d) Other Registrations. Prior to the SEC Effective Date, the
Company will not, without the prior written consent of the Majority Holders,
file 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 Securities, 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.
(e) Failure to File Registration Statement. If a Registration Event
occurs, then the Company will make payments to each Purchaser (a "Qualified
Purchaser"), as partial liquidated damages for the minimum amount of damages to
the Qualified Purchaser by reason thereof, and not as a penalty, at a rate equal
to 1% of the Purchase Price per share of Registrable Securities then held by a
Qualified Purchaser monthly, for each calendar month of the Registration Default
Period (pro rated for any period less than 30 days); provided, however, if a
Registration Event occurs (or is continuing) on a date more than one-year after
the Qualified Purchaser acquired the Registrable Securities (and thus the
one-year holding period under Rule 144(d) has elapsed), liquidated damages shall
be paid only with respect to that portion of the Qualified Purchaser's
Registrable Securities that cannot then be immediately resold in reliance on
Rule 144. Each such payment shall be due and payable within five days after the
end of each calendar month of the Registration Default Period until the
termination of the Registration Default Period and within five days after such
termination. Such payments shall be in partial compensation to the Qualified
Purchaser, and shall not constitute the Qualified Purchaser's exclusive remedy
for such events. The Registration Default Period shall terminate upon (i) the
filing of the Registration Statement in the case of clause (a) of the definition
of Registration Event, (ii) the SEC Effective Date in the case of clause (b) of
the definition of Registration Event, (iii) the ability of the Qualified
Purchaser to effect sales pursuant to the Registration Statement in the case of
clause (c) of the definition of Registration Event, (iv) the listing or
inclusion and/or trading of the Common Stock on an Approved Market, as the case
may be, in the case of clause (d) of the definition of Registration Event, and
(v) in the case of the events described in clauses (b) and (c) of the definition
of Registration Event, the earlier termination of the Registration Default
Period. The amounts payable as partial liquidated damages pursuant to this
paragraph shall be payable in lawful money of the United States. Amounts payable
as partial liquidated damages to each Qualified Purchaser hereunder with respect
to each share of Registrable Securities shall cease when the Qualified Purchaser
no longer holds such shares of Registrable Securities or such shares of
Registrable Securities can be immediately sold by the Qualified Purchaser in
reliance on Rule 144.
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4. Registration Procedures. 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 Securities, a registration statement on Form SB-2, 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
Securities in accordance with the intended methods of distribution thereof, and
use its commercially reasonable efforts to cause such registration statement to
become and remain effective at for a period of two years or for such shorter
period ending on the earlier to occur of (i) the sale of all Registrable
Securities and (ii) the availability under Rule 144(k) for the Holder to sell
the Registrable Securities (in either case, the "Effectiveness Period");
(b) if a 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 and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective
during the Effectiveness Period;
(d) furnish, without charge, to each Holder of Registrable
Securities 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 under 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 Securities owned by such Holder,
but only during the Effectiveness Period;
(e) use its commercially reasonable best efforts to register or
qualify such registration under such other applicable securities or blue sky
laws of such jurisdictions as any Holder of Registrable Securities covered by
such registration statement reasonably requests and as may be necessary for the
marketability of the Registrable Securities (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 Securities
owned by such Holder; provided, however, 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;
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(f) as promptly as practicable after becoming aware of such event,
notify each Holder of Registrable Securities, 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 Securities, 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 Securities 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;
(i) use its best efforts to cause all the Registrable Securities
covered by the Registration Statement to be quoted on the NASD 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 Securities being
offered pursuant to the Registration Statement to issue and deliver, or cause
its transfer agent to issue and deliver, certificates representing Registrable
Securities to be offered pursuant to the Registration Statement within a
reasonable time after the delivery of certificates representing the Registrable
Securities 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 Securities by reason of the limitations set forth in Regulation M
under the Exchange Act; and
(m) take all other reasonable actions necessary to expedite and
facilitate the disposition by the Holders of the Registrable Securities pursuant
to the Registration Statement.
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 an Blackout Period,
such Holder shall discontinue the disposition of Registrable Securities 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 Securities current at the time of receipt of such notice.
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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 securities or blue sky 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 a 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) the Company is given written notice by such Holder of such
transfer or assignment, stating the name and address of the transferee or
assignee and identifying the Registrable Securities with respect to which such
rights are being transferred or assigned.
8. Information by Holder. Holders included in any registration shall
furnish to the Company such information as the Company may reasonable request in
writing regarding such Holders and the distribution proposed by such Holders.
9. Indemnification.
(a) In the event of the offer and sale of Registrable Securities
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 shares of Registrable Securities 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 therein 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 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 through an instrument duly
executed by or on behalf of such Holder specifically stating that it is 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 Securities 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 Securities 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.
9
(b) As a condition to including Registrable Securities 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, its directors and officers,
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 to the Holder through an instrument duly
executed by or on behalf of the Company specifically stating that it is for use
in the preparation thereof, and such Holder shall reimburse the Company, and
each such director, officer, and controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating,
defending, or settling and such loss, claim, damage, liability, action, or
proceeding; provided, however, that such indemnity agreement found in this
Section 9 shall in no event exceed the gross proceeds from the offering received
by such Holder. 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.
10
(d) In the event that 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 (b) hereof 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 this Section 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) Other Indemnification. Indemnification similar to that specified
in this Section (with appropriate modifications) shall be given by the Company
and each Holder of Registrable Securities 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.
10. Rule 144. For a period of at least 24 months following the Closing
Date, the Company will use its commercially reasonable best efforts to timely
file all reports required to be filed by the Company after the date hereof under
the Securities Act and the Exchange Act and the rules and regulations adopted by
the Commission thereunder, and if the Company is not required to file reports
pursuant to such sections, it will prepare and furnish to the Purchasers and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell shares of Common Stock under Rule 144.
11. 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
12. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York and the United States of
America, both substantive and remedial. 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) Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall inure to the benefit of, and be binding upon, the
successors, Permitted Assigns, executors and administrators of the parties
hereto. In the event the Company merges with, or is otherwise acquired by, a
direct or indirect subsidiary of a publicly traded company, the Company shall
condition the merger or acquisition on the assumption by such parent company of
the Company's obligations under this Agreement.
(c) Entire Agreement. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof.
(d) 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:
Goldstrike, Inc.
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Telephone number (000) 000-0000
If to the Purchasers:
To each Purchaser at the address
set forth on Exhibit A
or at such other address as any party shall have furnished to the other parties
in writing.
(e) 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
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.
12
(f) 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.
(g) 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.
(h) 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.
(i) 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 to those granted to the Holders hereunder.
[SIGNATURE PAGES FOLLOW]
13
This Registration Rights Agreement is hereby executed as of the date first above
written.
COMPANY:
GOLDSTRIKE, INC.
By: ________________________________
Name:_______________________________
Its:________________________________
[SIGNATURE PAGE OF PURCHASER FOLLOWS]
14
This Registration Rights Agreement is hereby executed as of the date first
above written.
PURCHASER:
__________________________________________
__________________________________________
(PRINT NAME)
By: ______________________________________
Name: ____________________________________
Its: _____________________________________
15
Exhibit A
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Purchasers
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Purchaser Name Purchaser Address Number of Shares
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