CONSENT TO ASSIGNMENT AGREEMENT
THIS
CONSENT TO ASSIGNMENT
AGREEMENT (this “Agreement”)
is entered into as of February 16, 2010 (the “Effective Date”), by
and among Geoxplor Corp., a Nevada corporation (“Geo”),
Next Lithium Corp., a Province of Ontario corporation (“Lithium”),
Next Lithium (Nevada) Corp., a Nevada corporation (“Lithium
US” and together with Lithium, “Next”),
and Li3 Energy, Inc., a Nevada corporation (“Li3”).
RECITALS
WHEREAS,
A. Li3 and
Lithium entered into that certain binding offer dated November 24, 2009 (the
“Binding
Offer”) according to which Li3 is to acquire Next or the assets (the
“Assets”)
of Next (the “Acquisition”).
B. The
Assets of Next consist of (1) that certain BSV option agreement dated October
30, 2009, as amended by the Amending Agreement dated February 16, 2010 (as so
amended, the “BSV Option
Agreement”) and (2) that certain CSV, LM and MW option agreement dated
October 30, 2009, as amended by the Amending Agreement dated February 16, 2010
(as so amended, the “CSV Option
Agreement” and together with the BSV Option Agreement, the “Option
Agreements”), each by and among Geo and Next.
C. Li3
and Next have agreed, and are proceeding, to negotiate a definitive purchase
agreement (the “Purchase
Agreement”) pursuant to which Li3 shall acquire Next or the
Assets.
D. A
condition precedent to the closing of the Acquisition (the “Closing”)
is the assignment of the Option Agreements from Geo to Li3.
NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are acknowledged, the undersigned hereby agree as follows:
1. Consent to Assignment of the Option
Agreements. Geo does hereby consent to the assignment from
Next to Li3 at Closing of all right, title and interest of Next in and to the
Option Agreements.
2. Li3
Acknowledgement. In accordance with Section 11.2 of each of
the Option Agreements, Li3 does hereby acknowledge that it agrees, upon Closing,
to be bound by all of the provisions of the Option Agreements, as such
provisions may be modified by this Agreement, in place and stead of Next, and
that it will affirm this acknowledgement in the Purchase Agreement.
3. Waivers under the Option
Agreements. Geo hereby waives its pre-emptive rights
under Section 11.1 of each of the Option Agreements with respect to the proposed
assignment of the Assets from Next to Li3.
4. Modifications to Section 5.1
of the BSV Option
Agreement. The parties to this Agreement agree that Subsection
5.1(b) to the BSV Option Agreement is hereby amended and replaced in its
entirety to provide that upon Closing, Geo shall receive from Next 1,000,000
restricted shares of the common stock, $0.001 par value per share (the “Common
Stock”), of Li3 instead of any shares of Lithium. These shares of Li3 Common
Stock shall carry registration rights as set forth in Schedule A
hereto.
5. Modifications to Section 5.1
of the CSV Option
Agreement. (a) The parties to this Agreement further agree
that instead, and in full satisfaction, of the payments by Next to Geo specified
in Subsection 5.1 (c) of the CSV Option Agreement, Li3 shall pay to Geo,
upon Closing, the aggregate amount of US $25,000. (b) Additionally,
the parties to this Agreement agree that Subsection 5.1(d) to the CSV Option
Agreement is hereby amended and replaced in its entirety to provide that upon
Closing, Geo shall receive from Next 500,000 restricted shares of Li3 Common
Stock instead of any shares of Lithium. These shares of Li3 Common
Stock shall carry registration rights as set forth in Schedule A
hereto.
6. Acknowledgement of Payment
under
Subsection 5.1(a) of the CSV Option
Agreement. Geo acknowledges receipt of the US $163,393 from
Next paid in full satisfaction of the payment specified in Subsection 5.1(a) of
the CSV Option Agreement.
7. Waiver of Section 5.1
Termination Provisions. Geo acknowledges and agrees that the
failure of Next to have made any payments under Section 5.1 of each of the
Option Agreements required to be made on or prior to the Effective Date shall
not result in any default under, nor the termination of, the options granted
under the Option Agreements and that Geo hereby waives any such default or
termination and shall not be released from its obligations under the Option
Agreements as a result of any such failure.
8. Payment of Legal
Fees. Li3 agrees that upon Closing, it will pay up to US $40,000 of Geo’s
legal fees incurred in connection with the Option Agreements and the
transactions contemplated under this Agreement.
9. Affirmation. The
Option Agreements are hereby in all other respects ratified and
confirmed.
10. Representations and
Warranties Bring-Down. The representations and warranties of
Geo and Next contained in Article 13 of the each of the Option Agreements were
true, correct and complete in all material respects when made (except for
representations and warranties that speak as of a specific date, which
representations and warranties shall be true, correct and complete in all
material respects as of such date) and are true, correct in all material
respects and complete as at the date hereof.
11. Miscellaneous.
(a) Headings. The
headings and captions used in this Agreement are for convenience only and will
not be deemed to limit, amplify or modify the terms of this Agreement, the
Subscription Agreement or the Note.
(b) Successors and
Assigns. This Agreement shall be binding upon and inure to the
benefit of each of the undersigned and their respective successors and permitted
assigns.
(c) Multiple
Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if all signatories had signed the same
document. All counterparts must be construed together to constitute
one and the same instrument. This Agreement may be transmitted and
signed by facsimile or portable document format (PDF). The
effectiveness of any such documents and signatures shall, subject to applicable
law, have the same force and effect as manually-signed originals and shall be
binding on Borrower and Holder.
(d) Governing
Law. This Agreement must be construed, and its performance
enforced, under the laws of the Province of Ontario and the federal laws of
Canada.
[Signatures are on the following
page.]
The
Agreement is executed as of the date set out in the preamble to this
Agreement.
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GEOXPLOR
CORP.
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By:
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/s/ E. Xxxxx Xxxxxxxx
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Name: E.
Xxxxx Xxxxxxxx
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Title: Authorized
Signatory
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NEXT
LITHIUM CORP.
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By:
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/s/ Xxxxx X. XxxXxxxxxxx
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Name: Xxxxx
X. XxxXxxxxxxx
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Title: Director
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NEXT
LITHIUM (NEVADA) CORP.
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By:
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/s/ Xxxxx X. XxxXxxxxxxx
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Name: Xxxxx
X. XxxXxxxxxxx
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Title: Director
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By:
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/s/ Xxxx Xxxxx
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Name: Xxxx
Xxxxx
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Title: CEO
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SCHEDULE
A
REGISTRATION
RIGHTS
1. Certain
Definitions. As used in this Schedule, the following terms
shall have the following respective meanings:
“Agreement” means the
Consent to Assignment Agreement to which this Schedule is attached.
“Blackout Period”
means, with respect to a registration, a period, in each case commencing on the
day immediately after the Company notifies the Holders 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 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 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.
“Company” means Li3
Energy, Inc.
2
“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 Geo and
its successors and Permitted Assignees who acquire rights in accordance with
this Schedule with respect to any Registrable Securities.
“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 Schedule.
“Piggyback
Registration” means, in any registration of Common Stock referenced in
Section 3(a) of this Schedule, the right of each Holder to include the
Registrable Securities of such Holder in such registration.
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 Company Common Stock acquired by Geo
pursuant to Sections 4 and 5 of the Agreement, but excluding (i) any Registrable
Securities 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 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
Statement” means any registration statement including a Piggyback
Registration.
“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.
3
“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
Schedule shall terminate on the earlier of: (i) two years from the Effective
Date; (ii) such date on which all shares of Registrable Securities 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.
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 Securities Act Rule 145 transaction or 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 include as a Piggyback
Registration all of the Registrable Securities specified in a written request
delivered by the Holder thereof 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. Notwithstanding the foregoing, in the event that the
Commission limits the amount of shares that may be registered in such
registration statement, the Company may scale back from the registration
statement such number of shares of Registrable Securities, on a pro-rata basis,
as is required to meet the scale back requirements. Additionally, in
any such registration statement, Commission scale back requirements shall apply
first to the Registrable Securities and second, to any other shares being
registered pursuant to a mandatory or demand registration obligation of the
Company.
4
(a) Underwriting. If
a Piggyback Registration is for a registered public offering that is to be made
by an underwriting, the Company shall so advise the Holders of the Registrable
Securities eligible for inclusion in such registration statement pursuant to
Section 3(a). In that 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 sell any of
their Registrable Securities 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 on 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) If
the Piggyback Registration was 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 therein; and
(ii) If
the Piggyback Registration was 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 therein.
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 such Holder’s Registrable Securities therefrom by delivering a
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.
5
4. Registration Procedures for
Registrable Securities.
(a) Each
Holder agrees to furnish to the Company a completed questionnaire in the form
attached to this Schedule as Annex A (a “Selling Shareholder
Questionnaire”) not later than three (3) Business Days following the date
on which such Holder receives a request therefor;
(b)
The Company shall furnish, without charge, to each Holder of
Registrable Securities covered by a 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 Securities owned by such Holder,
but only during the Effectiveness Period;
(c) The
Company shall, 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 Holders
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;
(d) The
Company shall 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;
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(c) hereof or of the commencement of a 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(c) 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.
6
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 Schedule to
any party without the prior written consent of the Company; provided, however, that any
Holder may assign its rights under this Schedule 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 Schedule; 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 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 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.
7
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 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 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 net
proceeds from the PPO, received by the Company, 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 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.
(b) As
a condition to including Registrable Securities in any registration statement
filed pursuant to this Schedule, 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
Securities 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.
8
(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.
(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.
9
(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 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. [RESERVED]
11. Reports Under the Exchange
Act. With a view to making available to the Holders the
benefits of Rule 144 and any other rule or regulation of the SEC that may at any
time permit the Holders to sell the Registrable Securities 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 Holder owns any Registrable
Securities, to furnish in writing upon such Holder’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 Holder 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 Holder of any rule or regulation of the
SEC permitting the selling of any such Registrable Securities without
registration and (iv) to undertake any additional actions reasonably necessary
to maintain the availability of the use of Rule 144.
12. Miscellaneous.
(a) Remedies. In
the event of a breach by the Company or by a Holder of any of their respective
obligations under this Schedule, 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 Schedule, including recovery of damages, shall be entitled to specific
performance of its rights under this Schedule. 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
Schedule 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.
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(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 Assignees, executors and administrators of the parties
hereto.
(c) Entire
Agreement. This Schedule constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof.
(d) 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 Schedule, 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 Schedule, or any waiver on the part of any Holder
of any provisions or conditions of this Schedule, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Schedule, or by law or otherwise afforded to any
holder, shall be cumulative and not alternative.
(e) Severability. In the
case any provision of this Schedule 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.
(f) Amendments. The
provisions of this Schedule may be amended at any time and from time to time,
and particular provisions of this Schedule may be waived, with and only with an
agreement or consent in writing signed by the Company and the Majority Holders.
The Holders 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
Holders under this Schedule.
11
Annex
A
Selling
Securityholder Notice and Questionnaire
The
undersigned beneficial owner of Registrable Securities 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 Securities, 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 Securities 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 Securities hereby elects to include the
Registrable Securities 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:
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(a)
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Full
Legal Name of Selling
Securityholder
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(b)
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Full
Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities are
held:
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(c)
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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):
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2. Address
for Notices to Selling Securityholder:
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Telephone:
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Fax:
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Email:
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Contact
Person:
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3. Broker-Dealer
Status:
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(a)
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Are
you a broker-dealer?
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Yes ¨ No ¨
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(b)
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If
“yes” to Section 3(a), did you receive your Registrable Securities as
compensation for investment banking services to the
Company?
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Yes ¨ No ¨
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Note:
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If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
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(c)
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Are
you an affiliate of a
broker-dealer?
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Yes ¨ No ¨
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(d)
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If
you are an affiliate of a broker-dealer, do you certify that you bought
the Registrable Securities in the ordinary course of business, and at the
time of the purchase of the Registrable Securities to be resold, you had
no agreements or understandings, directly or indirectly, with any person
to distribute the Registrable
Securities?
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Yes ¨ No ¨
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Note:
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If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
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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 PPO.
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(a)
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Type
and Amount of other securities (other than the Registrable Securities)
beneficially owned by the Selling
Securityholder:
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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:
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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.
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Dated: _________________________
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Beneficial Owner: _________________________________
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By:
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Name:
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Title:
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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
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