GEOGLOBAL RESOURCES INC. REGISTRATION RIGHTS AGREEMENT
Exhibit 10.4
This Registration Rights Agreement (this “Agreement”) is made and entered into as of the
8th day of September 2005 between GeoGlobal Resources Inc., a Delaware corporation (the
“Company”), and Xxxxx, Xxxxx & Company Limited (the “Agent”).
Recitals
WHEREAS, the Company proposes to issue to the Subscribers (as defined herein) units comprised
of common shares of the Company (“Common Shares”) and warrants entitling the Subscribers to
subscribe for common shares of the Company (“Warrant Shares”) pursuant to subscription agreements
as described in the Agency Agreement, dated September 8, 2005, between the Company and the Agent
(the “Agency Agreement”);
WHEREAS, the Company proposes to issue to the Agent compensation options exercisable for units
comprised of common shares of the Company (“Compensation Shares”) and warrants entitling the Agent
to subscribe for common shares of the Company (“Compensation Warrant Shares”) pursuant to the
Agency Agreement;
WHEREAS, pursuant to the Agency Agreement, the Company has agreed to effect the registration
of the Common Shares, Warrant Shares, Compensation Shares and Compensation Warrant Shares on the
terms and subject to the conditions set forth therein and herein;
NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable
consideration, the parties hereby agree as follows:
1. REGISTRATION RIGHTS.
1.1 Certain Definitions. As used in this Agreement, the following terms shall have the
meanings set forth below:
(a) “Closing” shall mean the closing of the initial sale of the Registrable Securities;
(b) “Commission” shall mean the Securities and Exchange Commission or any other federal agency
at the time administering the Securities Act;
(c) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended;
(d) “Holder” shall mean any holder of Registrable Securities and any holder of Registrable
Securities to whom the registration rights conferred by this Agreement have been transferred in
compliance with Section 1.8 hereof.
(e) “Registrable Securities” shall mean the (i) Common Shares, (ii) Warrant Shares, (iii)
Compensation Shares, (iv) Compensation Warrant Shares, and (v) any common shares of the Company
issued as a dividend or other distribution with respect to or in exchange for or in replacement of
the shares referenced in (i), (ii), (iii) and (iv) above, provided, however, that Registrable
Securities shall not include (a) any common shares of the Company which have previously been
registered or which have been sold to the public either pursuant to a registered public offering or
Rule 144, or (b) common shares of the Company held by a Holder that may immediately be sold under
Rule 144 during any 90-day period and including Rule 144(k).
(f) The terms “register,” “registered” and “registration” shall refer to a registration
effected by preparing and filing the Registration Statement, and the declaration or ordering of the
effectiveness of such registration statement.
(g) “Registration Expenses” shall mean all expenses incurred in effecting any registration
pursuant to this Agreement, including, without limitation, all registration, qualification, and
filing fees, printing expenses, escrow fees, fees and disbursements of counsel for the Company,
blue sky fees and expenses, fees and disbursements of counsel for the Holders (which shall not
exceed US$10,000) and expenses of any regular or special audits incident to or required by any such
registration, but shall not include Selling Expenses, and the compensation of regular employees of
the Company, which shall be paid in any event by the Company.
(h) “Registration Statement” shall mean the registration statement filed pursuant to the
Securities Act relating to the resale of the Registrable Securities by the Holders, and all
amendments and supplements to such Registration Statement, including pre- and post-effective
amendments.
(i) “Rule 144” shall mean Rule 144 as promulgated by the Commission under the Securities Act,
as such Rule may be amended from time to time, or any similar successor rule that may be
promulgated by the Commission.
(j) “Securities Act” shall mean the Securities Act of 1933, as amended.
(k) “Selling Expenses” shall mean all underwriting discounts, selling commissions and stock
transfer taxes applicable to the sale of Registrable Securities.
(l) “Subscribers” means the persons buying Registrable Securities pursuant to subscription
agreements in the form agreed upon by the Agent and the Company.
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1.2 Registration
(a) The Company covenants to prepare and file with the Commission, as promptly as practicable
following the Closing and in any event within 60 days after the Closing, a Registration Statement
for an offering to be made on a continuous shelf basis following the date of effectiveness covering
the resale of the Registrable Securities by the Holders. The Registration Statement shall be on
Form S-3 under the Securities Act or another appropriate form selected by the Company permitting
registration of the resale of the Registrable Securities by the Holders from time to time. The
Company shall use its reasonable best efforts to cause the Registration Statement to become
effective pursuant to the Securities Act within 90 days after the Closing.
(b) The Registration Statement shall not be deemed to have become effective under the
Securities Act (i) unless it has been filed and has been declared effective under the Securities
Act by the Commission and remains effective pursuant to the Securities Act with respect to the
disposition of all Registrable Securities on a continuous shelf basis until all such Registrable
Securities are sold or cease to be Registrable Securities, or (ii) if the offering of the
Registrable Securities pursuant to such Registration Statement is interfered with by any stop
order, cease trade order, injunction or other order or requirement of the Commission or any other
governmental agency, court or stock exchange.
1.3 Expenses of Registration. The Company shall pay all Registration Expenses whether or not
such registration shall become effective.
1.4 Registration Procedures. In the case of the registration effected by the Company pursuant
to this Agreement, the Company will keep each Holder advised in writing as to the initiation of
such registration and as to the completion thereof. At its expense, the Company will use its best
efforts to:
(a) Keep such registration effective until all such Registrable Securities are sold or cease
to be Registrable Securities;
(b) Prepare and file with the Commission such amendments and supplements to such Registration
Statement and the prospectus used in connection with such registration statement as may be
necessary to comply with the provisions of the Securities Act with respect to the disposition of
all Registrable Securities covered by such Registration Statement;
(c) Furnish such number of prospectuses and other documents incident thereto, including any
amendment of or supplement to the prospectus, as a Holder from time to time may reasonably request;
(d) Notify each seller of Registrable Securities covered by such Registration Statement at any
time when a prospectus relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such registration statement,
as then in effect, (i) no longer meets the requirements of Section 10(a)(3) of the Securities Act,
or (ii) includes an untrue
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statement of a material fact or omits to state a material fact required
to be stated therein or necessary to make the statements therein not misleading or incomplete in
the light of the circumstances then existing, and that offers and sales of Registrable Securities
in reliance on the prospectus included in the Registration Statement must cease. At the request of
any such seller, the Corporation shall prepare and furnish to such seller a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such shares, such prospectus used shall meet the
requirements of Section 10(a)(3) of the Securities Act, or not include an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading or incomplete in the light of the circumstances then
existing;
(e) Cause all such Registrable Securities registered pursuant hereunder to be listed on each
securities exchange on which similar securities issued by the Company are then listed;
(f) Use its best efforts to obtain all other approvals, consents, exemptions, or
authorizations from such governmental agencies or authorities as may be necessary to enable the
Holders to consummate the disposition of the Registrable Securities;
(g) Provide a transfer agent and registrar for all Registrable Securities registered pursuant
to the Registration Statement and a CUSIP number for all such Registrable Securities, in each case
not later than the effective date of such registration;
(h) Otherwise use its best efforts to comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as reasonably practicable, an
earnings statement covering the period of at least 12 months, but not more than 18 months,
beginning with the first month after the effective date of the Registration Statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act;
(i) Subject to compliance with the requirements of the Securities Act, cooperate with the
Holders to facilitate the timely preparation and delivery of certificates not bearing any
restrictive legends representing the Registrable Securities sold pursuant to the Registration
Statement, and cause such Registrable Securities to be issued in such denominations and registered
in such names in accordance with instructions of the Holders that are provided to the Company;
(j) In connection with any underwritten offering pursuant to a registration statement filed
pursuant to Section 1 hereof, the Company will enter into an underwriting agreement with an underwriter selected and retained by the selling
securityholders, and reasonably acceptable to the Company in its discretion, in form reasonably
necessary to effect the offer and sale of common shares, provided such underwriting agreement
contains reasonable and customary provisions; and
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(k) Furnish, on the date that such Registrable Securities are delivered to the underwriters
for sale, if such securities are being sold through underwriters or, if such securities are not
being sold through underwriters, on the date that the Registration Statement becomes effective, (i)
an opinion, dated as of such date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in a underwritten
public offering and (ii) a letter, dated as of such date, from the independent certified public
accountants of the Company, in form and substance as is customarily given by the Company’s
independent registered public accountants to underwriters in an underwritten public offering,
addressed to the underwriters, if any, and if permitted by applicable accounting standards, to the
Holders participating in such registration.
1.5 Indemnification.
(a) The Company will indemnify each Holder, each of its officers, directors and partners,
legal counsel, and accountants and each person controlling such Holder within the meaning of
Section 15 of the Securities Act, with respect to which registration, qualification, or compliance
has been effected pursuant to this Agreement, and each underwriter, if any, and each person who
controls within the meaning of Section 15 of the Securities Act any underwriter, against all
expenses, claims, losses, damages, and liabilities (or actions, proceedings, or settlements in
respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any prospectus or other document (including any related registration
statement, notification, or the like) incident to any such registration, qualification, or
compliance, or based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in connection with any such
registration, qualification, or compliance, and will reimburse each such Holder, each of its
officers, directors, partners, legal counsel, and accountants and each person controlling such
Holder, each such underwriter, and each person who controls any such underwriter, for any legal and
any other expenses reasonably incurred in connection with investigating and defending or settling
any such claim, loss, damage, liability, or action, provided that the Company will not be liable in
any such case to the extent that any such claim, loss, damage, liability, or expense arises out of
or is based on any untrue statement or omission based upon written information furnished to the
Company by such Holder or underwriter and stated to be specifically for use therein. It is agreed
that the indemnity agreement contained in this Section 1.5 shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably withheld).
(b) Each Holder will, if Registrable Securities held by such Holder are included in the
securities as to which such registration, qualification, or compliance is being effected, indemnify
the Company, each of its directors, officers, partners, legal counsel, and accountants and each
underwriter, if any, of the Company’s securities covered by such a registration statement, each
person who controls the
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Company or such underwriter within the meaning of Section 15 of the
Securities Act, each other such Holder, and each of their officers, directors, and partners, and
each person controlling such Holder, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any such registration statement, prospectus, or other
document, or any omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and will reimburse the
Company and such Holders, directors, officers, partners, legal counsel, and accountants, persons,
underwriters, or control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage, liability, or action, in
each case to the extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration statement, prospectus or
other document in reliance upon and in conformity with written information furnished to the Company
by such Holder and stated to be specifically for use therein provided, however, that the
obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such
claims, losses, damages, or liabilities (or actions in respect thereof) if such settlement is
effected without the consent of such Holder (which consent shall not be unreasonably withheld); and
provided that in no event shall any indemnity under this Section 1.5 exceed the gross proceeds from
the offering received by such Holder.
(c) Each party entitled to indemnification under this Section 1.5 (the “Indemnified Party”)
shall give notice to the party required to provide indemnification (the “Indemnifying Party”)
promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may
be sought, and shall permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct
the defense of such claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at such party’s expense, and provided further that the failure of
any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of
its obligations under this Section 1.5, to the extent such failure is not prejudicial. No
Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent
of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does
not include as an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or litigation. Each
Indemnified Party shall furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably required in
connection with defense of such claim and litigation resulting therefrom.
(d) If the indemnification provided for in this Section 1.5 is held by a court of competent
jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim,
damage, or expense referred to therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such
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loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the
Indemnified Party on the other in connection with the statements or omissions that resulted in such
loss, liability, claim, damage, or expense as well as any other relevant equitable considerations.
The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the Indemnifying Party
or by the Indemnified Party and the parties’ relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection with the
underwritten public offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.
1.6 Information by Holder. Each Holder shall furnish to the Company such information
regarding such Holder and the distribution proposed by such Holder as the Company may reasonably
request in writing and as shall be reasonably required in connection with any registration,
qualification, or compliance referred to in this Agreement.
1.7 Rule 144 Reporting. With a view to making available the benefits of certain rules and
regulations of the Commission that may permit the sale of the Registrable Securities to the public
without registration, the Company agrees to use its best efforts to:
(a) File with the Commission in a timely manner all reports and other documents required of
the Company under the Securities Act and the Exchange Act at any time it is subject to such
reporting requirements;
(b) So long as a Holder owns any Registrable Securities, furnish to the Holder forthwith upon
written request a written statement by the Company as to its compliance with the reporting
requirements of Rule 144, and of the Securities Act and the Exchange Act, a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents so filed as a
Holder may reasonably request in availing itself of any rule or regulation of the Commission
allowing a Holder to sell any such securities without registration.
1.8 Transfer or Assignment of Registration Rights. The registration rights granted to a
Holder by the Company under this Agreement may be transferred or assigned by a Holder provided that
the Company is given written notice at the time of or within a reasonable time after said transfer
or assignment, stating the name and address of the transferee or assignee and identifying the
Registrable Securities being transferred or assigned. Such transferees (other than transferees
that acquire the Registrable Securities
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in a registered public offering or pursuant to a sale under
Rule 144) shall automatically be entitled to receive the benefits of and be conclusively deemed to
have agreed to be bound by the terms and provisions of this Agreement as if it were a party hereto,
and shall be deemed to be Holders under this Agreement.
1.9 Delay of Registration. No Holder shall have any right to take any action to restrain,
enjoin, or otherwise delay any registration as the result of any controversy that might arise with
respect to the interpretation or implementation of this Section 1.
2. COVENANTS OF THE COMPANY.
The Company hereby covenants and agrees, so long as any Holder owns any Registrable
Securities, as follows:
2.1 Maintain Listing. The Company covenants that, once it has registered the Registrable
Securities under the Securities Act, it shall use its reasonable best efforts to maintain the
listing of such securities on each stock exchange or quotation system on which such securities are
listed or quoted.
3. MISCELLANEOUS.
3.1 Governing Law. This Agreement shall be governed in all respects by the laws of the State
of New York.
3.2 Third Party Beneficiaries Each Holder other than the Agent shall be a beneficiary of this
Agreement and entitled to all of the rights and benefits of this Agreement as if such Holder was a
party and signatory to this Agreement and shall, for all purposes, be deemed a Holder under this
Agreement. If the Company shall so request, each Holder other than the Agent shall agree in
writing to be subject to all of the terms hereof.
3.3 Successors and Assigns. Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto.
3.4 Entire Agreement; Amendment; Waiver. This Agreement (including the Exhibits hereto)
constitutes the full and entire understanding and agreement between the parties with regard to the
subjects hereof. Neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated, except by a written instrument signed by the Company and the holders of at least 50% of
the Registrable Securities and any such amendment, waiver, discharge or termination shall be
binding on all the Holders, but in no event shall the obligation of any Holder hereunder be
materially increased, except upon the written consent of such Holder. This Agreement may be
amended to add additional stockholders as parties hereto with the consent of the Company only.
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3.5 Notices, etc. All notices and other communications required of permitted hereunder shall
be in writing and shall be mailed by United States first-class mail, postage prepaid, sent by
facsimile or delivered personally by hand or nationally recognized courier addressed (a) if to a
Holder, as indicated on the list of Holders attached hereto as Exhibit A, or at such other address
or facsimile number as such holder or permitted assignee shall have furnished to the Company in
writing, or (b) if to the Company, at such address or facsimile number as the Company shall have
furnished to each Holder in writing. All such notices and other written communications shall be
effective on the date of mailing, confirmed facsimile transfer or delivery.
3.6 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing
to any Holder, upon any breach or default of the Company under this Agreement shall impair any such
right, power or remedy of such Holder nor shall it be construed to be a waiver of any such breach
or default, or an acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other
breach or default therefore or thereafter occurring. Any waiver, permit, consent or approval of any
kind or character on the part of any Holder of any breach or default under this Agreement or any
waiver on the part of any Holder of any provisions or conditions of this Agreement must be made in
writing and shall be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any Holder, shall be
cumulative and not alternative.
3.7 Rights; Separability. Unless otherwise expressly provided herein, a Holder’s rights hereunder are several rights,
not rights jointly held with any of the other Holders. In case any provision of the Agreement shall
be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
3.8 Information Confidential. Each Holder acknowledges that the information received by them
pursuant hereto may be confidential and for its use only, and it will not use such confidential
information in violation of the Exchange Act or reproduce, disclose or disseminate such information
to any other person (other than its employees or agents having a need to know the contents of such
information, and its attorneys), except in connection with the exercise of rights under this
Agreement, unless the Company has made such information available to the public generally or such
Holder is required to disclose such information by a governmental body.
3.9 Titles and Subtitles. The titles of the paragraphs and subparagraphs of this Agreement
are for convenience of reference only and are not to be considered in construing or interpreting
this Agreement.
3.10 Counterparts. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement
effective as of the day and year first above written.
| GEOGLOBAL RESOURCES INC. | ||||
| By: | ||||
| Title: | ||||
| XXXXX, XXXXX & COMPANY LIMITED | ||||
| By: | ||||
| Title: | ||||
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EXHIBIT A
List of Holders
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