INVESTOR RIGHTS AGREEMENT
This
Investor Rights Agreement is made and entered into as of July 31, 2006 (this
“Agreement”),
among
Adera Mines Limited, a Nevada corporation (the “Company”),
and
each of the purchasers executing this Agreement and listed on Schedule
1
attached
hereto (collectively, the “Purchasers”).
This
Agreement is being entered into pursuant to the Common Stock and Warrant
Purchase Agreement dated as of the date hereof, by and among the Company and
the
Purchasers (the “Purchase
Agreement”).
The
Company and the Purchasers hereby agree as follows:
1. Certain
Definitions.
Capitalized
terms used and not otherwise defined herein shall have the meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
shall have the following meanings:
“Advice”
shall
have the meaning set forth in Section 3(m).
“Affiliate”
means,
with respect to any Person, any other Person that directly or indirectly
controls or is controlled by or under common control with such Person. For
the
purposes of this definition, “control,” when used with respect to any Person,
means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms of
“affiliated,” “controlling” and “controlled” have meanings correlative to the
foregoing.
“Blackout
Period”
shall
have the meaning set forth in Section 3(n).
“Board”
shall
have the meaning set forth in Section 3(n).
“Business
Day”
means
any day except Saturday, Sunday and any day which shall be a federal or state
legal holiday or a day on which banking institutions in the State of New York
generally are authorized or required by law or other government actions to
close.
“Commission”
means
the Securities and Exchange Commission.
“Common
Stock”
means
the Company's Common Stock, par value $0.00001.
“Effectiveness
Date”
shall
have the meaning set forth in Section 2.
“Effectiveness
Period”
shall
have the meaning set forth in Section 2.
“Event”
shall
have the meaning set forth in Section 7(e).
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Filing
Date”
means
the 60th day following the Closing Date.
“Holder”
or
“Holders”
means
the holder or holders, as the case may be, from time to time of Registrable
Securities, including without limitation the Purchasers and their assignees.
“Indemnified
Party”
shall
have the meaning set forth in Section 5(c).
“Indemnifying
Party”
shall
have the meaning set forth in Section 5(c).
“Losses”
shall
have the meaning set forth in Section 5(a).
“Person”
means
an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.
“Proceeding”
means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“Prospectus”
means
the prospectus included in any Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by such Registration Statement,
and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference in such
Prospectus.
“Purchased
Shares”
means
the shares of Common Stock purchased by the Purchasers pursuant to the Purchase
Agreement and includes, without limitation, shares of Common Stock issued upon
an adjustment pursuant to Article VI of the Purchase Agreement.
“Registrable
Securities”
means
(a) the Purchased Shares and the Warrant Shares (without regard to any
limitations on beneficial ownership contained in the Purchase Agreement or
Warrants) or other securities issued or issuable to each Purchaser or its
transferee or designee (i) upon exercise of the Warrants, or (ii) upon any
distribution with respect to, any exchange for or any replacement of such
Purchased Shares or Warrants or (iii) upon any conversion, exercise or exchange
of any securities issued in connection with any such distribution, exchange
or
replacement; (b) securities issued or issuable upon any stock split, stock
dividend, recapitalization or similar event with respect to the foregoing;
and
(c) any other security issued as a dividend or other distribution with respect
to, in exchange for, in replacement or redemption of, or in reduction of the
liquidation value of, any of the securities referred to in the preceding
clauses; provided, however, that such securities shall cease to be Registrable
Securities when such securities have been sold to or through a broker or dealer
or underwriter in a public distribution or a public securities transaction
or
when such securities may be sold without any restriction pursuant to Rule 144(k)
as determined by the counsel to the Company pursuant to a written opinion
letter, addressed to the Company's transfer agent to such effect as described
in
Section 2 of this Agreement.
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“Registration
Statement”
means
the registration statements and any additional registration statements
contemplated by Section 2, including (in each case) the Prospectus, amendments
and supplements to such registration statement or Prospectus, including pre-
and
post-effective amendments, all exhibits thereto, and all material incorporated
by reference in such registration statement.
“Rule
144”
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Rule
158”
means
Rule 158 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Rule
415”
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Special
Counsel”
means
Xxxxxx and Xxxx LLP.
“Warrant
Shares”
means
the shares of Common Stock issued or issuable upon the exercise of the Warrants
issued or to be issued to the Purchasers or their assignees or designees in
connection with the offering consummated under the Purchase Agreement.
2. Registration.
As soon
as possible following the Closing Date (but not later than the Filing Date),
the
Company shall prepare and file with the Commission a “shelf” Registration
Statement covering all Registrable Securities for a secondary or resale offering
to be made on a continuous basis pursuant to Rule 415. The Registration
Statement shall be on Form S-3 (or if such form is not available to the Company
on Form S-1 or another form appropriate for such registration in accordance
herewith). The Company shall use its best efforts to cause the Registration
Statement to be declared effective under the Securities Act not later than
the
date that is sixty (60) days, or, if the Registration Statement is reviewed
by
the Commission, ninety (90) days, after the date on which the Registration
Statement is filed with the Commission (as applicable, the “Effectiveness
Date”)
and to
keep such Registration Statement continuously effective under the Securities
Act, subject to Section 3(n) hereof, until such date as is the earlier of (x)
the date when all Registrable Securities covered by such Registration Statement
have been sold or (y) with respect to any Holder, such time as all Registrable
Securities held by such Holder may be sold without any restriction pursuant
to
Rule 144(k) as determined by the counsel to the Company pursuant to a written
opinion letter addressed to the Company's transfer agent to such effect (the
“Effectiveness
Period”).
For
purposes of the obligations of the Company under this Agreement, no Registration
Statement shall be considered “effective” with respect to any Registrable
Securities unless such Registration Statement lists the Holders of such
Registrable Securities as “Selling Stockholders” and includes such other
information as is required to be disclosed with respect to such Holders to
permit them to sell their Registrable Securities pursuant to such Registration
Statement, unless any such Holder is not included as a “Selling Stockholder”
pursuant to Section 3(m). Such Registration Statement also shall cover, to
the
extent allowable under the Securities Act and the Rules promulgated thereunder
(including Securities Act Rule 416), such indeterminate number of additional
shares of Common Stock resulting from stock splits, stock dividends or similar
transactions with respect to the Registrable Securities. Whether or not the
Effectiveness Date has occurred, if the Company is notified (orally or in
writing, whichever is earlier) by the Commission that a Registration Statement
will not be “reviewed,” or not be subject to further review, then the Company
shall file with the Commission a request for acceleration of effectiveness
in
accordance with Rule 461 promulgated under the Securities Act within three
(3)
Business Days following receipt of such notice from the Commission.
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3. Registration
Procedures.
In
connection with the Company's registration obligations hereunder, the Company
shall:
(a)
Prepare and file with the Commission on or prior to the Filing Date, a
Registration Statement on Form S-3 (or if such form is not available to the
Company on Form S-1 or another form appropriate for such registration in
accordance herewith) (which shall include a Plan of Distribution substantially
in the form of Exhibit
A
attached
hereto), and cause the Registration Statement to become effective and remain
effective as provided herein; provided, however, that not less than three (3)
Business Days prior to the filing of the Registration Statement or any related
Prospectus or any amendment or supplement thereto, the Company shall (i) furnish
to the Special Counsel, copies of all such documents proposed to be filed,
which
documents (other than those incorporated by reference) will be subject to the
review of such Special Counsel, and (ii) at the request of any Holder cause
its
officers and directors, counsel and independent certified public accountants
to
respond to such inquiries as shall be necessary, in the reasonable opinion
of
counsel to such Holders, to conduct a reasonable investigation within the
meaning of the Securities Act. The Company shall not file the Registration
Statement or any such Prospectus or any amendments or supplements thereto to
which the Holders of a majority of the Registrable Securities or the Special
Counsel shall reasonably object within three (3) Business Days after their
receipt thereof; provided, however, that if the Registration Statement is
provided to the Special Counsel and in the reasonable opinion of counsel to
the
Company complies with the requirements of this Agreement and is ready to be
filed with the Commission, then no liquidated damages shall accrue with respect
to any delay in filing after the Filing Date that results from such objection
and the Effectiveness Date will be correspondingly extended by the number of
days of delay after the Filing Date resulting from such objection. In the event
of any such objection, the Holders shall provide the Company with any and all
requested revisions to such prospectus or supplement within two (2) Business
Days of such objection.
(b) (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement as may be necessary to keep the
Registration Statement continuously effective as to all of the Registrable
Securities for the Effectiveness Period and to the extent any Registrable
Securities are not included in such Registration Statement for reasons other
than the failure of the Holder to comply with Section 3(m) hereof (including,
without limitation, Registrable Securities issued or issuable upon adjustment
pursuant to Article VI of the Purchase Agreement), shall prepare and file with
the Commission such amendments to the Registration Statement or such additional
Registration Statements in order to register for resale under the Securities
Act
all Registrable Securities and cause such amendments or additional Registration
Statements to be declared effective as soon as practicable following the time
at
which the Company would be permitted by applicable law and by the rules and
regulations of the Commission to register such Registrable Securities; (ii)
cause the related Prospectus to be amended or supplemented by any required
Prospectus supplement, and as so supplemented or amended to be filed pursuant
to
Rule 424 (or any similar provisions then in force) promulgated under the
Securities Act; (iii) respond as promptly as possible, and in no event later
than ten (10) Business Days (or 15 Business Days if the comments relate to
accounting matters), to any comments received from the Commission with respect
to the Registration Statement or any amendment thereto and as promptly as
reasonably possible provide the Holders true and complete copies of all
correspondence from and to the Commission relating to the Registration
Statement; and (iv) comply in all material respects with the provisions of
the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by the Registration Statement during the
applicable period in accordance with the intended methods of disposition by
the
Holders thereof set forth in the Registration Statement as so amended or in
such
Prospectus as so supplemented.
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(c) Notify
Holders of Registrable Securities to be sold and the Special Counsel as promptly
as possible (A) when a Prospectus or any Prospectus supplement or post-effective
amendment to the Registration Statement is proposed to be filed (but in no
event
in the case of this subparagraph (A), less than three (3) Business Days prior
to
date of such filing); (B) when the Commission notifies the Company whether
there
will be a “review” of such Registration Statement and whenever the Commission
comments in writing on such Registration Statement; and (C) with respect to
the
Registration Statement or any post-effective amendment, when the same has become
effective, and after the effectiveness thereof: (i) of any request by the
Commission or any other Federal or state governmental authority for amendments
or supplements to the Registration Statement or Prospectus or for additional
information; (ii) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement covering any or all of the
Registrable Securities or the initiation of any Proceedings for that purpose;
(iii) of the receipt by the Company of any notification with respect to the
suspension of the qualification or exemption from qualification of any of the
Registrable Securities for sale in any jurisdiction, or the initiation or
threatening of any Proceeding for such purpose; and (iv) if the financial
statements included in the Registration Statement become ineligible for
inclusion therein or of the occurrence of any event that makes any statement
made in the Registration Statement or Prospectus or any document incorporated
or
deemed to be incorporated therein by reference untrue in any material respect
or
that requires any revisions to the Registration Statement, Prospectus or other
documents so that, in the case of the Registration Statement or the Prospectus,
as the case may be, it will not contain any 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, in the light of the circumstances under which
they
were made, not misleading. Without limitation to any remedies to which the
Holders may be entitled under this Agreement, if any of the events described
in
Section 3(c)(C)(i), 3(c)(C)(ii) and 3(c)(C)(iii) occur, the Company shall use
its best efforts to respond to and correct the event.
(d) Use
its
best efforts to avoid the issuance of, or, if issued, use best efforts to obtain
the withdrawal of, (i) any order suspending the effectiveness of the
Registration Statement or (ii) any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable time.
5
(e) If
requested by any Holder of Registrable Securities, (i) promptly incorporate
in a
Prospectus supplement or post-effective amendment to the Registration Statement
such information as the Company reasonably agrees should be included therein
and
(ii) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such Prospectus supplement
or
post-effective amendment.
(f) Furnish
to each Holder and the Special Counsel, without charge, at least one conformed
copy of each Registration Statement and each amendment thereto, including
financial statements and schedules, and all exhibits to the extent requested
by
such Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.
(g) Promptly
deliver to each Holder and the Special Counsel, without charge, as many copies
of the Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request; and
the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus
and
any amendment or supplement thereto.
(h) Prior
to
any public offering of Registrable Securities, use its best efforts to register
or qualify or cooperate with the selling Holders and the Special Counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and
sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any Holder requests in writing, to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things necessary or advisable to enable
the
disposition in such jurisdictions of the Registrable Securities covered by
a
Registration Statement; provided, however, that the Company shall not be
required to qualify generally to do business in any jurisdiction where it is
not
then so qualified or to take any action that would subject it to general service
of process in any jurisdiction where it is not then so subject or subject the
Company to any material tax in any such jurisdiction where it is not then so
subject.
6
(i) Cooperate
with the Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold pursuant to a
Registration Statement, which certificates shall be free, to the extent
permitted by applicable law and the Purchase Agreement, of all restrictive
legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any Holder may request at least two (2) Business
Days prior to any sale of Registrable Securities. In connection therewith,
the
Company shall promptly after the effectiveness of the Registration Statement
cause an opinion of counsel to be delivered to and maintained with its transfer
agent, together with any other authorizations, certificates and directions
required by the transfer agent, which authorize and direct the transfer agent
to
issue such Registrable Securities without legend upon sale by the Holder of
such
shares of Registrable Securities under the Registration Statement.
(j) Following
the occurrence of any event contemplated by Section 3(c)(C)(iv), as promptly
as
possible, prepare a supplement or amendment, including a post-effective
amendment, to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein
by
reference, and file any other required document so that, as thereafter
delivered, neither the Registration Statement nor such Prospectus will contain
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, in the light
of the circumstances under which they were made, not misleading.
(k) Cause
all
Registrable Securities relating to such Registration Statement to be listed
on
any United States securities exchange, quotation system, market or
over-the-counter bulletin board, if any, on which similar securities issued
by
the Company are then listed.
(l) Comply
in
all material respects with all applicable rules and regulations of the
Commission and make generally available to its security holders earnings
statements satisfying the provisions of Section 11(a) of the Securities Act
and
Rule 158 not later than 45 days after the end of any 3-month period (or 90
days
after the end of any 12-month period if such period is a fiscal year) commencing
on the first day of the first fiscal quarter of the Company after the effective
date of the Registration Statement, which statement shall conform to the
requirements of Rule 158.
(m) Request
each selling Holder to furnish to the Company information regarding such Holder
and the distribution of such Registrable Securities as is required by law or
the
Commission to be disclosed in the Registration Statement, and the Company may
exclude from such registration the Registrable Securities of any such Holder
who
fails to furnish such information within a reasonable time prior to the filing
of each Registration Statement, supplemented Prospectus and/or amended
Registration Statement.
If
the
Registration Statement refers to any Holder by name or otherwise as the holder
of any securities of the Company, then such Holder shall have the right to
require (if such reference to such Holder by name or otherwise is not required
by the Securities Act or any similar federal statute then in force) the deletion
of the reference to such Holder in any amendment or supplement to the
Registration Statement filed or prepared subsequent to the time that such
reference ceases to be required.
7
Each
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the
kind
described in Section 3(c)(C)(i), 3(c)(C)(ii), 3(c)(C)(iii), 3(c)(C)(iv), or
3(n), such Holder will forthwith discontinue disposition of such Registrable
Securities under the Registration Statement until such Holder's receipt of
the
copies of the supplemented Prospectus and/or amended Registration Statement
contemplated by Section 3(j), or until it is advised in writing (the
“Advice”)
by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement.
(n) If
(i)
there is material non-public information regarding the Company which the
Company's Board of Directors (the “Board”)
reasonably determines not to be in the Company's best interest to disclose
and
which the Company is not otherwise required to disclose, or (ii) there is a
significant business opportunity (including, but not limited to, the acquisition
or disposition of assets (other than in the ordinary course of business) or
any
merger, consolidation, tender offer or other similar transaction) available
to
the Company which the Board reasonably determines not to be in the Company's
best interest to disclose and which the Company would be required to disclose
under the Registration Statement, then the Company may postpone or suspend
filing or effectiveness of a registration statement for a period not to exceed
20 consecutive days, provided that the Company may not postpone or suspend
its
obligation under this Section 3(n) for more than 40 days in the aggregate during
any 12 month period (each, a “Blackout
Period”).
4. Registration
Expenses.
All
fees
and expenses incident to the performance of or compliance with this Agreement
by
the Company shall be borne by the Company whether or not the Registration
Statement is filed or becomes effective and whether or not any Registrable
Securities are sold pursuant to the Registration Statement. The fees and
expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with any
securities exchange, quotation system, market or over-the-counter bulletin
board
on which Registrable Securities are required hereunder to be listed, (B) with
respect to filings required to be made with the Commission, and (C) in
compliance with state securities or Blue Sky laws (including, without
limitation, reasonable and documented fees and disbursements of Special Counsel
in connection with Blue Sky qualifications of the Registrable Securities and
determination of the eligibility of the Registrable Securities for investment
under the laws of such jurisdictions as the Holders of a majority of Registrable
Securities may designate)), (ii) printing expenses (including, without
limitation, expenses of printing certificates for Registrable Securities and
of
printing or photocopying prospectuses), (iii) messenger, telephone and delivery
expenses, (iv) Securities Act liability insurance, if the Company so desires
such insurance, (v) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated
by
this Agreement, including, without limitation, the Company's independent public
accountants (including, in the case of an underwritten offering, the expenses
of
any comfort letters or costs associated with the delivery by independent public
accountants of a comfort letter or comfort letters) and legal counsel, and
(vi)
reasonable and documented fees and expenses of the Special Counsel (not to
exceed $7,500) in connection with any Registration Statement hereunder. In
addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated
by
this Agreement (including, without limitation, all salaries and expenses of
its
officers and employees performing legal or accounting duties), the expense
of
any annual audit, the fees and expenses incurred in connection with the listing
of the Registrable Securities on any securities exchange as required
hereunder.
8
5. Indemnification.
(a) Indemnification
by the Company.
The
Company shall, notwithstanding any termination of this Agreement, indemnify
and
hold harmless each Holder, the officers, directors, agents, brokers (including
brokers who offer and sell Registrable Securities as principal as a result
of a
pledge or any failure to perform under a margin call of Common Stock),
investment advisors and employees of each of them, each Person who controls
any
such Holder (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, agents and employees of
each such controlling Person, to the fullest extent permitted by applicable
law,
from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, costs of preparation and reasonable attorneys'
fees) and expenses (collectively, “Losses”),
as
incurred, arising out of or relating to any untrue or alleged untrue statement
of a material fact contained or incorporated by reference in the Registration
Statement, any Prospectus or any form of prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or
relating to any omission or alleged omission of a material fact required to
be
stated therein or necessary to make the statements therein (in the case of
any
Prospectus or form of prospectus or amendment or supplement thereto, in the
light of the circumstances under which they were made) not misleading, except
to
the extent, but only to the extent, that (i) such untrue statements or omissions
are based solely upon information regarding such Holder furnished in writing
to
the Company by such Holder expressly for use therein, which information was
reasonably relied on by the Company for use therein or to the extent that such
information relates to (x) such Holder and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement,
such
Prospectus or such form of prospectus or in any amendment or supplement thereto
or (y) such Holder's proposed method of distribution of Registrable Securities
as set forth in Exhibit
A
(or as
such Holder otherwise informs the Company in writing); or (ii) in the case
of an
occurrence of an event of the type described in Section 3(c)(C)(ii),
3(c)(C)(iii), 3(c)(C)(iv) or 3(n), the use by a Holder of an outdated or
defective Prospectus after the delivery to the Holder of written notice from
the
Company that the Prospectus is outdated or defective and prior to the receipt
by
such Holder of the Advice contemplated in Section 3(m); provided, however,
that
the indemnity agreement contained in this Section 5(a) shall not apply to
amounts paid in settlement of any Losses if such settlement is effected without
the prior written consent of the Company, which consent shall not be
unreasonably withheld. The Company shall notify the Holders promptly of the
institution, threat or assertion of any Proceeding of which the Company is
aware
in connection with the transactions contemplated by this Agreement. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of an Indemnified Party (as defined in Section 5(c) to
this
Agreement) and shall survive the transfer of the Registrable Securities by
the
Holders.
9
(b) Indemnification
by Holders.
Each
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents and employees
of
such controlling Persons, to the fullest extent permitted by applicable law,
from and against all Losses, as incurred, arising solely out of or based solely
upon any untrue statement of a material fact contained in the Registration
Statement, any Prospectus, or any form of prospectus, or in any amendment or
supplement thereto, or arising solely out of or based solely upon any omission
of a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in the light of the circumstances under which they were
made) not misleading, to the extent, but only to the extent, that (i) such
untrue statement or omission is contained in or omitted from any information
so
furnished in writing by such Holder to the Company specifically for inclusion
in
the Registration Statement or such Prospectus and that such information was
reasonably relied upon by the Company for use in the Registration Statement,
such Prospectus, or in any amendment or supplement thereto, or to the extent
that such information relates to (x) such Holder and was reviewed and expressly
approved in writing by such Holder expressly for use in the Registration
Statement, such Prospectus, or such form of prospectus or in any amendment
or
supplement thereto or (y) such Holder's proposed method of distribution of
Registrable Securities as set forth in Exhibit
A
(or as
such Holder otherwise informs the Company in writing) or (ii) in the case of
an
occurrence of an event of the type described in Section 3(c)(C)(ii),
3(c)(C)(iii), 3(c)(C)(iv) or 3(n), the use by a Holder of an outdated or
defective Prospectus after the delivery to the Holder of written notice from
the
Company that the Prospectus is outdated or defective and prior to the receipt
by
such Holder of the Advice contemplated in Section 3(m); provided, however,
that
the indemnity agreement contained in this Section 5(b) shall not apply to
amounts paid in settlement of any Losses if such settlement is effected without
the prior written consent of the Holder, which consent shall not be unreasonably
withheld. Notwithstanding anything to the contrary contained herein, the Holder
shall be liable under this Section 5(b) for only that amount as does not exceed
the net proceeds to such Holder as a result of the sale of Registrable
Securities pursuant to such Registration Statement.
(c) Conduct
of Indemnification Proceedings.
If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified
Party”),
such
Indemnified Party promptly shall notify the Person from whom indemnity is sought
(the “Indemnifying
Party”)
in
writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all reasonable fees and expenses incurred
in connection with defense thereof; provided, that the failure of any
Indemnified Party to give such notice shall not relieve the Indemnifying Party
of its obligations or liabilities pursuant to this Agreement, except (and only)
to the extent that it shall be finally determined by a court of competent
jurisdiction (which determination is not subject to appeal or further review)
that such failure shall have proximately and materially adversely prejudiced
the
Indemnifying Party.
10
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; or (2) the Indemnifying Party shall have failed promptly to assume
the
defense of such Proceeding and to employ counsel reasonably satisfactory to
such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing
that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof
and such counsel shall be at the reasonable expense of the Indemnifying Party).
The Indemnifying Party shall not be liable for any settlement of any such
Proceeding effected without its written consent, which consent shall not be
unreasonably withheld. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from
all
liability on claims that are the subject matter of such Proceeding and does
not
impose any monetary or other obligation or restriction on the Indemnified Party.
All
reasonable fees and expenses of the Indemnified Party (including reasonable
fees
and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten (10)
Business Days of written notice thereof to the Indemnifying Party, which notice
shall be delivered no more frequently than on a monthly basis (regardless of
whether it is ultimately determined that an Indemnified Party is not entitled
to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses
to
the extent it is finally judicially determined that such Indemnified Party
is
not entitled to indemnification hereunder).
(d) Contribution.
If a
claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party because of a failure or refusal of a governmental authority
to
enforce such indemnification in accordance with its terms (by reason of public
policy or otherwise), then each Indemnifying Party, in lieu of indemnifying
such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates
to
information supplied by, such Indemnifying Party or Indemnified Party, and
the
parties' relative intent, knowledge, access to information and opportunity
to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or
other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees
or
expenses if the indemnification provided for in this Section was available
to
such party in accordance with its terms. Notwithstanding anything to the
contrary contained herein, the Holder shall be required to contribute under
this
Section 5(d) for only that amount as does not exceed the net proceeds to such
Holder as a result of the sale of Registrable Securities pursuant to such
Registration Statement.
11
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by
any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties. The indemnity and contribution agreements herein are in addition to
and
not in diminution or limitation of any indemnification provisions under the
Purchase Agreement.
6. Rule
144.
As
long
as any Holder owns Purchased Shares, Warrants or Warrant Shares, the Company
covenants to timely file (or obtain extensions in respect thereof and file
within the applicable grace period) all reports required to be filed by the
Company after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange
Act. As long as any Holder owns Purchased Shares, Warrants or Warrant Shares,
if
the Company is not required to file reports pursuant to Section 13(a) or 15(d)
of the Exchange Act, it will prepare and furnish to the Holders and make
publicly available in accordance with Rule 144(c) promulgated under the
Securities Act annual and quarterly financial statements, together with a
discussion and analysis of such financial statements in form and substance
substantially similar to those that would otherwise be required to be included
in reports required by Section 13(a) or 15(d) of the Exchange Act, as well
as
any other information required thereby, in the time period that such filings
would have been required to have been made under the Exchange Act. The Company
further covenants that it will take such further action as any Holder may
reasonably request, all to the extent required from time to time to enable
such
Person to sell Purchased Shares and Warrant Shares without registration under
the Securities Act within the limitation of the exemptions provided by Rule
144
promulgated under the Securities Act, including compliance with the provisions
of the Purchase Agreement relating to the transfer of the Purchased Shares
and
Warrant Shares. Upon the request of any Holder, the Company shall deliver to
such Holder a written certification of a duly authorized officer as to whether
it has complied with such requirements.
12
7. Miscellaneous.
(a) Remedies.
In the
event of a breach by the Company or by a Holder, of any of their obligations
under this Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under
this
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and each Holder
agree that monetary damages would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense
that
a remedy at law would be adequate.
(b) No
Inconsistent Agreements.
Except
as otherwise disclosed in the Purchase Agreement, neither the Company nor any
of
its subsidiaries is a party to an agreement currently in effect, nor shall
the
Company or any of its subsidiaries, on or after the date of this Agreement,
enter into any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders in this Agreement or otherwise conflicts
with the provisions hereof. Without limiting the generality of the foregoing,
without the written consent of the Holders of a majority of the then outstanding
Registrable Securities, the Company shall not grant to any Person the right
to
request the Company to register any securities of the Company under the
Securities Act unless the rights so granted are subject in all respects to
the
rights of the Holders set forth herein, and are not otherwise in conflict with
the provisions of this Agreement. Except for a registration statement on Form
S-8, in no case shall the Company file any registration statement with the
Commission until the date which is the number of days after the date on which
the Registration Statement is declared effective (the “Effective
Date”)
equal
to the sum of (X) one hundred eighty (180) days, plus (Y) the number of days,
if
any, during which the sale of Registrable Securities was suspended after the
Effective Date (including, without limitation, pursuant to Section
3(n)).
(c) Notice
of Effectiveness.
Within
two (2) Business Days after the Registration Statement which includes the
Registrable Securities is ordered effective by the Commission, the Company
shall
deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Holders
whose
Registrable Securities are included in such Registration Statement) confirmation
that the Registration Statement has been declared effective by the Commission
in
the form attached hereto as Exhibit
B.
(d) Piggy-Back
Registrations.
If at
any time when there is not an effective Registration Statement covering all
of
the Registrable Securities, the Company shall determine to prepare and file
with
the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or its then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business
or
equity securities issuable in connection with stock option or other employee
benefit plans, the Company shall send to each Holder of Registrable Securities
written notice of such determination and, if within seven (7) Business Days
after receipt of such notice, any such Holder shall so request in writing (which
request shall specify the Registrable Securities intended to be disposed of
by
the Holder), the Company will cause the registration under the Securities Act
of
all Registrable Securities which the Company has been so requested to register
by the Holder, to the extent required to permit the disposition of the
Registrable Securities so to be registered, provided that if at any time after
giving written notice of its intention to register any securities and prior
to
the effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or
to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to such Holder and, thereupon, (i) in
the
case of a determination not to register, shall be relieved of its obligation
to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay expenses in accordance with Section 4 hereof),
and (ii) in the case of a determination to delay registering, shall be permitted
to delay registering any Registrable Securities being registered pursuant to
this Section 7(d) for the same period as the delay in registering such other
securities. The Company shall include in such registration statement all or
any
part of such Registrable Securities such Holder requests to be registered.
In
the case of an underwritten public offering, if the managing underwriter(s)
or
underwriter(s) should reasonably object to the inclusion of the Registrable
Securities in such registration statement, then if the Company after
consultation with the managing underwriter should reasonably determine that
the
inclusion of such Registrable Securities, would materially adversely affect
the
offering contemplated in such registration statement, and based on such
determination recommends inclusion in such registration statement of fewer
or
none of the Registrable Securities of the Holders, then (x) the number of
Registrable Securities of the Holders included in such registration statement
shall be reduced pro-rata among such Holders (based upon the number of
Registrable Securities requested to be included in the registration), if the
Company after consultation with the underwriter(s) recommends the inclusion
of
fewer Registrable Securities, or (y) none of the Registrable Securities of
the
Holders shall be included in such registration statement, if the Company after
consultation with the underwriter(s) recommends the inclusion of none of such
Registrable Securities; provided, however, that if securities are being offered
for the account of other persons or entities as well as the Company, such
reduction shall not represent a greater fraction of the number of Registrable
Securities intended to be offered by the Holders than the fraction of similar
reductions imposed on such other persons or entities (other than the
Company).
13
(e) Failure
to File Registration Statement; Failure to Get Effective and Other
Events.
The
Company and the Holders agree that the Holders will suffer damages if the
Registration Statement is not filed on or prior to the Filing Date, declared
effective on or prior to the Effectiveness Date and maintained in the manner
contemplated herein during the Effectiveness Period or if another Event (as
defined below) shall occur. The Company and the Holders further agree that
it
would not be feasible to ascertain the extent of such damages with precision.
Accordingly, if (i) the Registration Statement is not filed on or prior to
the
Filing Date, or (ii) the Company fails to file with the Commission a request
for
acceleration in accordance with Rule 461 promulgated under the Securities Act
within three (3) Business Days following the date that the Company is notified
(orally or in writing, whichever is earlier) by the Commission that a
Registration Statement will not be “reviewed,” or not subject to further review,
or, (iii) the Registration Statement is not declared effective by the Commission
on or prior to the Effectiveness Date, or (iv) the Registration Statement is
filed with and declared effective by the Commission but thereafter ceases to
be
effective as to all Registrable Securities at any time prior to the expiration
of the Effectiveness Period, without being succeeded immediately by a subsequent
Registration Statement filed with the Commission, except as otherwise permitted
by this Agreement, including pursuant to Section 3(n), or (v) an amendment
or
additional Registration Statement required to be filed pursuant to Section
3(b)
is either (A) not filed within 30 days following the date that the Company
would
first be permitted pursuant to applicable law and the rules and regulations
of
the Commission to register the applicable Registrable Securities or (B) is
not
declared effective within 30 days following the date on which it is filed,
or
(vi) trading in the Common Stock shall be suspended or if the Common Stock
is
delisted from any securities exchange, quotation system, market or
over-the-counter bulletin board on which Registrable Securities are required
hereunder to be listed (each an “Exchange”),
without immediately being listed on any other Exchange, for any reason for
more
than one (1) Business Day, other than pursuant to Section 3(n), or (vii) the
rights of any Holder to exercise into Warrant Shares are suspended for any
reason without the consent of the particular Holder (any such failure or breach
being referred to as an “Event”),
the
Company shall pay as liquidated damages for such failure and not as a penalty
to
each Holder an amount equal to one percent (1%) of such Holder's Subscription
Amount for each thirty (30) day period until the applicable Event has been
cured, which shall be pro rated for such periods less than thirty (30) days
(the
“Periodic
Amount”).
Payments to be made pursuant to this Section 7(e) shall be due and payable
immediately upon demand in immediately available cash funds; provided that
if
the Common Stock is then listed on a Trading Market (as defined in the Purchase
Agreement) payments with respect to an Event described in clause (iii) of the
foregoing sentence shall be payable at the option of the Company in either
cash
or Common Stock valued at the closing price of the Common Stock (or if there
is
no closing price, then the closing bid price) on the date the applicable
Periodic Amount became due (or if such date is not a Business Day then on the
immediately preceding Business Day). The parties agree that the Periodic Amount
represents a reasonable estimate on the part of the parties, as of the date
of
this Agreement, of the amount of damages that may be incurred by the Holders
if
the Registration Statement is not filed on or prior to the Filing Date, declared
effective on or prior to the Effectiveness Date and maintained in the manner
contemplated herein during the Effectiveness Period or if any other Event as
described herein has occurred. Notwithstanding the foregoing, the Company shall
remain obligated to cure the breach or correct the condition that caused the
Event, and the Holder shall have the right to take any action necessary or
desirable to enforce such obligation.
14
(f) Specific
Enforcement, Consent to Jurisdiction.
(i) The
Company and the Holders acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this Agreement
and
to enforce specifically the terms and provisions hereof, this being in addition
to any other remedy to which any of them may be entitled by law or
equity.
(ii) Each
of
the Company and the Holders (i) hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts located in New York City, New
York
for the purposes of any suit, action or proceeding arising out of or relating
to
this Agreement and (ii) hereby waives, and agrees not to assert in any such
suit, action or proceeding, any claim that it is not personally subject to
the
jurisdiction of such court, that the suit, action or proceeding is brought
in an
inconvenient forum or that the venue of the suit, action or proceeding is
improper. Each of the Company and the Holders consents to process being served
in any such suit, action or proceeding by mailing a copy thereof to such party
at the address in effect for notices to it under this Agreement and agrees
that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing in this Section 7(g) shall affect or limit any right to serve
process in any other manner permitted by law.
15
(g) Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this sentence, may
not
be amended, modified or supplemented, and waivers or consents to departures
from
the provisions hereof may not be given, unless the same shall be in writing
and
signed by the Company and the Holders of at least a majority of the Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to
the
rights of Holders and that does not directly or indirectly affect the rights
of
other Holders may be given by Holders of the Registrable Securities to which
such waiver or consent relates; provided, however, that the provisions of this
sentence may not be amended, modified, or supplemented except in accordance
with
the provisions of the immediately preceding sentence.
(i) Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be in writing and shall be deemed given and effective
on the earlier of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile telephone number specified for
notice prior to 5:00 p.m., New York City time, on a Business Day, (ii) the
next
Business Day after the date of transmission, if such notice or communication
is
delivered via facsimile at the facsimile number specified in this Section on
a
day that is not a Business Day or later than 5:00 p.m., New York City time,
on
any date and earlier than 11:59 p.m., New York City time, on such date, (iii)
the Business Day following the date of mailing, if sent by nationally recognized
overnight courier service such as Federal Express or (iv) actual receipt by
the
party to whom such notice is required to be given. The addresses for such
communications shall be with respect to each Holder at its address set forth
under its name on Schedule
1
attached
hereto, or with respect to the Company, addressed to:
Adera
Mines Limited
00000
Xxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
Attention:
Chief Financial Officer
Facsimile
No.: 000-000-0000
or
to
such other address or addresses or facsimile number or numbers as any such
party
may most recently have designated in writing to the other parties hereto by
such
notice. Copies of notices to the Company shall be sent to:
Xxxxxxxxxx
Xxxxx LLP
00000
Xxxxxxxx Xxxx.
Xxx
Xxxxxxx, XX 00000
Attention:
Xxxx Xxxxx, Esq.
Facsimile
No.: 000-000-0000
Copies
of
notices to any Holder shall be sent to the addresses, if any, listed on
Schedule
1
attached
hereto.
16
(j) Successors
and Assigns.
This
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns and shall inure to the benefit of each
Holder and its successors and assigns; provided, that the Company may not assign
this Agreement or any of its rights or obligations hereunder without the prior
written consent of each Holder; and provided, further, that each Holder may
assign its rights hereunder in the manner and to the Persons as permitted under
the Purchase Agreement.
(k) Assignment
of Registration Rights.
The
rights of each Holder hereunder, including the right to have the Company
register for resale Registrable Securities in accordance with the terms of
this
Agreement, shall be automatically assignable by each Holder to any transferee
of
such Holder of all or a portion of the Purchased Shares, the Warrants or the
Registrable Securities if: (i) the Holder agrees in writing with the transferee
or assignee to assign such rights, and a copy of such agreement is furnished
to
the Company within a reasonable time after such assignment, (ii) the Company
is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee,
and
(b) the securities with respect to which such registration rights are being
transferred or assigned, (iii) following such transfer or assignment the further
disposition of such securities by the transferee or assignees is restricted
under the Securities Act and applicable state securities laws, (iv) at or before
the time the Company receives the written notice contemplated by clause (ii)
of
this Section 7(k), the transferee or assignee agrees in writing with the Company
to be bound by all of the provisions of this Agreement, and (v) such transfer
shall have been made in accordance with the applicable requirements of the
Purchase Agreement. The rights to assignment shall apply to the Holders (and
to
subsequent) successors and assigns.
The
Company may require, as a condition of allowing such assignment in connection
with a transfer of Purchased Shares, Warrants or Registrable Securities (i)
that
the Holder or transferee of all or a portion of the Purchased Shares, the
Warrants or the Registrable Securities as the case may be, furnish to the
Company a written opinion of counsel that is reasonably acceptable to the
Company to the effect that such transfer may be made without registration under
the Securities Act, (ii) that the Holder or transferee execute and deliver
to
the Company an investment letter in form and substance acceptable to the Company
and (iii) that the transferee be an “accredited investor” as defined in Rule
501(a) promulgated under the Securities Act.
(l) Counterparts;
Facsimile.
This
Agreement may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature
is
delivered by electronic means or facsimile transmission, such signature shall
create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.
17
(m) Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York, without regard to principles of conflicts of law
thereof.
(n) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
(o) Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, illegal, void or unenforceable in any
respect, the remainder of the terms, provisions, covenants and restrictions
set
forth herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and the parties hereto shall use their
reasonable efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be
hereafter declared invalid, illegal, void or unenforceable.
(p) Headings;
Construction.
The
headings herein are for convenience only, do not constitute a part of this
Agreement and shall not be deemed to limit or affect any of the provisions
hereof. Any references herein to “dollars” or use herein of the symbol “$” shall
refer to the currency of the United States of America.
(q) Registrable
Securities Held by the Company and its Affiliates.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by
the
Company or its Affiliates (other than any Holder or transferees or successors
or
assigns thereof if such Holder is deemed to be an Affiliate solely by reason
of
its holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
(r) Obligations
of Purchasers.
The
Company acknowledges that the obligations of each Purchaser under this
Agreement, are several and not joint with the obligations of any other
Purchaser, and no Purchaser shall be responsible in any way for the performance
of the obligations of any other Purchaser under this Agreement. The decision
of
each Purchaser to enter into to this Agreement has been made by such Purchaser
independently of any other Purchaser. The Company further acknowledges that
nothing contained in this Agreement, and no action taken by any Purchaser
pursuant hereto, shall be deemed to constitute the 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 hereby. 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.
18
Each
Purchaser has been represented by its own separate legal counsel in their review
and negotiation of this Agreement and with respect to the transactions
contemplated hereby. For reasons of administrative convenience only, this
Agreement has been prepared by Special Counsel (counsel for Vision Opportunity
Master Fund, Ltd.) and the Special Counsel will perform certain duties under
this Agreement. Such counsel does not represent all of the Purchasers but only
Vision Opportunity Master Fund, Ltd. The Company has elected to provide all
Purchasers with the same terms and Agreement for the convenience of the Company
and not because it was required or requested to do so by the Purchasers. The
Company acknowledges that such procedure with respect to this Agreement in
no
way creates a presumption that the Purchasers are in any way acting in concert
or as a group with respect to this Agreement or the transactions contemplated
hereby or thereby.
[signature
page follows]
19
IN
WITNESS WHEREOF, the parties hereto have caused this Investor Rights Agreement
to be duly executed by their respective authorized persons as of the date first
indicated above.
COMPANY:
ADERA
MINES LIMITED
By:______________________________
Name:
X.
Xxxxxxx Xxxxxx III
Title: President
20
PURCHASERS:
Print
Exact Name:_________________________________
By:_____________________________________________
Name:
Title:
[Omnibus
Adera Mines Limited Investor Rights Agreement Signature Page]
21
SCHEDULE
1
PURCHASERS
|
Name
and Address
|
Copy
of Notice to:
|
|
EXHIBIT
A
PLAN
OF
DISTRIBUTION
We
are
registering the shares of common stock on behalf of the selling security
holders. Sales of shares may be made by selling security holders, including
their respective donees, transferees, pledgees or other successors-in-interest
directly to purchasers or to or through underwriters, broker-dealers or through
agents. Sales may be made from time to time on the OTC Bulletin Board, any
other
exchange or market upon which our shares may trade in the future, in the
over-the-counter market or otherwise, at market prices prevailing at the time
of
sale, at prices related to market prices, or at negotiated or fixed prices.
The
shares may be sold by one or more of, or a combination of, the
following:
|
-
|
a
block trade in which the broker-dealer so engaged will attempt to
sell the
shares as agent but may position and resell a portion of the block
as
principal to facilitate the transaction (including crosses in which
the
same broker acts as agent for both sides of the
transaction);
|
|
-
|
purchases
by a broker-dealer as principal and resale by such broker-dealer,
including resales for its account, pursuant to this
prospectus;
|
|
-
|
ordinary
brokerage transactions and transactions in which the broker solicits
purchases;
|
|
-
|
through
options, swaps or derivatives;
|
|
-
|
in
privately negotiated transactions;
|
|
-
|
in
making short sales or in transactions to cover short sales; and
|
|
-
|
put
or call option transactions relating to the shares.
|
The
selling security holders may effect these transactions by selling shares
directly to purchasers or to or through broker-dealers, which may act as agents
or principals. These broker-dealers may receive compensation in the form of
discounts, concessions or commissions from the selling security holders and/or
the purchasers of shares for whom such broker-dealers may act as agents or
to
whom they sell as principals, or both (which compensation as to a particular
broker-dealer might be in excess of customary commissions). The selling security
holders have advised us that they have not entered into any agreements,
understandings or arrangements with any underwriters or broker-dealers regarding
the sale of their securities.
The
selling security holders may enter into hedging transactions with broker-dealers
or other financial institutions. In connection with those transactions, the
broker-dealers or other financial institutions may engage in short sales of
the
shares or of securities convertible into or exchangeable for the shares in
the
course of hedging positions they assume with the selling security holders.
The
selling security holders may also enter into options or other transactions
with
broker-dealers or other financial institutions which require the delivery of
shares offered by this prospectus to those broker-dealers or other financial
institutions. The broker-dealer or other financial institution may then resell
the shares pursuant to this prospectus (as amended or supplemented, if required
by applicable law, to reflect those transactions).
The
selling security holders and any broker-dealers that act in connection with
the
sale of shares may be deemed to be “underwriters” within the meaning of Section
2(11) of the Securities Act of 1933, and any commissions received by
broker-dealers or any profit on the resale of the shares sold by them while
acting as principals may be deemed to be underwriting discounts or commissions
under the Securities Act. The selling security holders may agree to indemnify
any agent, dealer or broker-dealer that participates in transactions involving
sales of the shares against liabilities, including liabilities arising under
the
Securities Act. We have agreed to indemnify each of the selling security holders
and each selling security holder has agreed, severally and not jointly, to
indemnify us against some liabilities in connection with the offering of the
shares, including liabilities arising under the Securities Act.
The
selling security holders will be subject to the prospectus delivery requirements
of the Securities Act. We have informed the selling security holders that the
anti-manipulative provisions of Regulation M promulgated under the Securities
Exchange Act of 1934 may apply to their sales in the market.
Selling
security holders also may resell all or a portion of the shares in open market
transactions in reliance upon Rule 144 under the Securities Act, provided they
meet the criteria and conform to the requirements of Rule 144.
Upon
being notified by a selling security holder that a material arrangement has
been
entered into with a broker-dealer for the sale of shares through a block trade,
special offering, exchange distribution or secondary distribution or a purchase
by a broker or dealer, we will file a supplement to this prospectus, if required
pursuant to Rule 424(b) under the Securities Act, disclosing:
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the
name of each such selling security holder and of the participating
broker-dealer(s);
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the
number of shares involved;
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|
the
initial price at which the shares were
sold;
|
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the
commissions paid or discounts or concessions allowed to the
broker-dealer(s), where applicable;
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that
such broker-dealer(s) did not conduct any investigation to verify
the
information set out or incorporated by reference in this prospectus;
and
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other
facts material to the transactions.
|
In
addition, if required under applicable law or the rules or regulations of the
Commission, we will file a supplement to this prospectus when a selling security
holder notifies us that a donee or pledgee intends to sell more than 500 shares
of common stock.
We
are
paying all expenses and fees customarily paid by the issuer in connection with
the registration of the shares. The selling security holders will bear all
brokerage or underwriting discounts or commissions paid to broker-dealers in
connection with the sale of the shares.
EXHIBIT
B
FORM
OF
NOTICE OF EFFECTIVENESS OF REGISTRATION STATEMENT
[Name
and
Address of Transfer Agent]
Re:
Adera
Mines Limited
Dear
[______]:
We
are
counsel to Adera Mines Limited, a Nevada corporation (the “Company”),
and
have represented the Company in connection with that certain Common Stock and
Warrant Purchase Agreement (the “Purchase
Agreement”)
dated
as of July __, 2006 by and among the Company and the buyers named therein
(collectively, the “Holders”)
pursuant to which the Company issued to the Holders shares of its Common Stock,
par value $0.00001 (the
“Common
Stock”),
and
warrants to purchase shares of the Common Stock (the “Warrants”).
Pursuant to the Purchase Agreement, the Company has also entered into an
Investor Rights Agreement with the Holders (the “Investor
Rights Agreement”)
pursuant to which the Company agreed, among other things, to register the shares
of Common Stock issued pursuant to the Purchase Agreement and the Common Stock
issuable upon exercise of the Warrants, under the Securities Act of 1933, as
amended (the “1933
Act”).
In
connection with the Company's obligations under the Investor Rights Agreement,
on ____________ ___, 2005, the Company filed a Registration Statement on Form
S-__ (File No. 333-_____________) (the “Registration
Statement”)
with
the Securities and Exchange Commission (the “SEC”)
relating to the Registrable Securities which names each of the Holders as a
selling securityholder thereunder.
In
connection with the foregoing, we advise you that a member of the SEC's staff
has advised us by telephone that the SEC has entered an order declaring the
Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the
Registration Statement.
Very
truly yours,
By:__________________________________
cc:
[LIST
NAMES OF HOLDERS]
