REGISTRATION RIGHTS AGREEMENT
EXECUTION
COPY
REGISTRATION
RIGHTS AGREEMENT
(this
"Agreement"),
dated
as of January 20, 2006, by and between GOLDEN
PHOENIX MINERALS, INC., a
Minnesota corporation, (the "Company"),
and
FUSION
CAPITAL FUND II, LLC
(together with it permitted assigns, the “Buyer”).
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Common Stock Purchase Agreement by and
between the parties hereto, dated as of the date hereof (as amended, restated,
supplemented or otherwise modified from time to time, the "Purchase
Agreement").
WHEREAS:
A. The
Company has agreed, upon the terms and subject to the conditions of the Purchase
Agreement, to issue to the Buyer (i) up to Six Million Two Hundred Thousand
Dollars ($6,200,000) of the Company's common stock, no par value per share
(the
"Common
Stock")
(the
"Purchase
Shares"),
and
(ii) such number of shares of Common Stock as is required pursuant to Section
4(f) of the Purchase Agreement (the "Commitment
Shares");
and
B. To
induce
the Buyer to enter into the Purchase Agreement, the Company has agreed to
provide certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the "1933
Act"),
and
applicable state securities laws.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged,
the Company and the Buyer hereby agree as follows:
1. DEFINITIONS.
As
used
in this Agreement, the following terms shall have the following
meanings:
a. "Investor"
means
the Buyer, any transferee or assignee thereof to whom a Buyer assigns its rights
under this Agreement and who agrees to become bound by the provisions of this
Agreement in accordance with Section 9 and any transferee or assignee thereof
to
whom a transferee or assignee assigns its rights under this Agreement and who
agrees to become bound by the provisions of this Agreement in accordance with
Section 9.
b. "Person"
means
any person or entity including any corporation, a limited liability company,
an
association, a partnership, an organization, a business, an individual, a
governmental or political subdivision thereof or a governmental
agency.
c. "Register,"
"registered,"
and
"registration"
refer
to a registration effected by preparing and filing one or more registration
statements of the Company in compliance with the 1933 Act and pursuant to Rule
415 under the 1933 Act or any successor rule providing for offering securities
on a continuous basis ("Rule
415"),
and
the declaration or ordering of effectiveness of such registration statement(s)
by the United States Securities and Exchange Commission (the "SEC").
d. "Registrable
Securities"
means
the Purchase Shares which have been, or which may from time to time be, issued
or issuable upon purchases of the Available Amount under the Purchase Agreement
(without regard to any limitation or restriction on purchases) and the
Commitment Shares issued or issuable to the Investor and any shares of capital
stock issued or issuable with respect to the Purchase Shares, the Commitment
Shares or
the
Purchase Agreement as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, without regard to
any
limitation on purchases under the Purchase Agreement.
1
e. "Registration
Statement"
means
the registration statement of the Company covering only the sale of the
Registrable Securities.
2. REGISTRATION.
a. Mandatory
Registration.
The
Company shall within ten (10) Trading Days from the date hereof file with the
SEC the Registration Statement. The Registration Statement shall register only
the Registrable Securities and no other securities of the Company. The Investor
and its counsel shall have a reasonable opportunity to review and comment upon
such registration statement or amendment to such registration statement and
any
related prospectus prior to its filing with the SEC. Investor shall furnish
all
information reasonably requested by the Company for inclusion therein. The
Company shall use its best efforts to have the Registration Statement or
amendment declared effective by the SEC at the earliest possible date. The
Company shall use reasonable best efforts to keep the Registration Statement
effective pursuant to Rule 415 promulgated under the 1933 Act and available
for
sales of all of the Registrable Securities at all times until the earlier of
(i)
the date as of which the Investor may sell all of the Registrable Securities
without restriction pursuant to Rule 144(k) promulgated under the 1933 Act
(or
successor thereto) or (ii) the date on which (A) the Investor shall have sold
all the Registrable Securities and no Available Amount remains under the
Purchase Agreement (the "Registration
Period").
The
Registration Statement (including any amendments or supplements thereto and
prospectuses contained therein) shall not contain any 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 light of the circumstances in
which
they were made, not misleading.
b. Rule
424 Prospectus.
The
Company shall, as required by applicable securities regulations, from time
to
time file with the SEC, pursuant to Rule 424 promulgated under the 1933 Act,
the
prospectus and prospectus supplements, if any, to be used in connection with
sales of the Registrable Securities under the Registration Statement. The
Investor and its counsel shall have a reasonable opportunity to review and
comment upon such prospectus prior to its filing with the SEC. The Investor
shall use its reasonable best efforts to comment upon such prospectus within
one
(1) Trading Day from the date the Investor receives the final version of such
prospectus.
c. Sufficient
Number of Shares Registered.
In the
event the number of shares available under the Registration Statement is
insufficient to cover all of the Registrable Securities, the Company shall
amend
the Registration Statement or file a new registration statement (a ”New
Registration Statement”),
so as
to cover all of such Registrable Securities as soon as practicable, but in
any
event not later than ten (10) Trading Days after the necessity therefor arises.
The Company shall use it reasonable best efforts to cause such amendment and/or
New Registration Statement to become effective as soon as practicable following
the filing thereof.
3. RELATED
OBLIGATIONS.
With
respect to the Registration Statement and whenever any Registrable Securities
are to be registered pursuant to Section 2(b) including on any New Registration
Statement, the Company shall use its reasonable best efforts to effect the
registration of the Registrable Securities in accordance with the intended
method of disposition thereof and, pursuant thereto, the Company shall have
the
following obligations:
2
a. The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to any registration statement and
the
prospectus used in connection with such registration statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may
be
necessary to keep the Registration Statement or any New Registration Statement
effective at all times during the Registration Period, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition
of
all Registrable Securities of the Company covered by the Registration Statement
or any New Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the intended methods
of disposition by the seller or sellers thereof as set forth in such
registration statement.
b. The
Company shall permit the Investor to review and comment upon the Registration
Statement or any New Registration Statement and all amendments and supplements
thereto at least two (2) Trading Days prior to their filing with the SEC, and
not file any document in a form to which Investor reasonably objects. The
Investor shall use its reasonable best efforts to comment upon the Registration
Statement or any New Registration Statement and any amendments or supplements
thereto within two (2) Trading Days from the date the Investor receives the
final version thereof. The Company shall furnish to the Investor, without charge
any correspondence from the SEC or the staff of the SEC to the Company or its
representatives relating to the Registration Statement or any New Registration
Statement.
c. Upon
request of the Investor, the Company shall furnish to the Investor, (i) promptly
after the same is prepared and filed with the SEC, at least one copy of such
registration statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference and
all exhibits, (ii) upon the effectiveness of any registration statement, a
copy
of the prospectus included in such registration statement and all amendments
and
supplements thereto (or such other number of copies as the Investor may
reasonably request) and (iii) such other documents, including copies of any
preliminary or final prospectus, as the Investor may reasonably request from
time to time in order to facilitate the disposition of the Registrable
Securities owned by the Investor.
d. The
Company shall use reasonable best efforts to (i) register and qualify the
Registrable Securities covered by a registration statement under such other
securities or "blue sky" laws of such jurisdictions in the United States as
the
Investor reasonably requests, (ii) prepare and file in those jurisdictions,
such
amendments (including post-effective amendments) and supplements to such
registrations and qualifications as may be necessary to maintain the
effectiveness thereof during the Registration Period, (iii) take such other
actions as may be necessary to maintain such registrations and qualifications
in
effect at all times during the Registration Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided, however, that the Company shall not
be
required in connection therewith or as a condition thereto to (x) qualify to
do
business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d), (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of process in any such
jurisdiction. The Company shall promptly notify the Investor who holds
Registrable Securities of the receipt by the Company of any notification with
respect to the suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or "blue sky" laws of
any
jurisdiction in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such purpose.
3
e. As
promptly as practicable after becoming aware of such event or facts, the Company
shall notify the Investor in writing of the happening of any event or existence
of such facts as a result of which the prospectus included in any registration
statement, as then in effect, includes an untrue statement of a material fact
or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were
made, not misleading, and promptly prepare a supplement or amendment to such
registration statement to correct such untrue statement or omission, and deliver
a copy of such supplement or amendment to the Investor (or such other number
of
copies as the Investor may reasonably request). The Company shall also promptly
notify the Investor in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and when a registration
statement or any post-effective amendment has become effective (notification
of
such effectiveness shall be delivered to the Investor by facsimile on the same
day of such effectiveness and by overnight mail), (ii) of any request by the
SEC
for amendments or supplements to any registration statement or related
prospectus or related information, and (iii) of the Company's reasonable
determination that a post-effective amendment to a registration statement would
be appropriate.
f. The
Company shall use its reasonable best efforts to prevent the issuance of any
stop order or other suspension of effectiveness of any registration statement,
or the suspension of the qualification of any Registrable Securities for sale
in
any jurisdiction and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible moment and
to
notify the Investor of the issuance of such order and the resolution thereof
or
its receipt of actual notice of the initiation or threat of any proceeding
for
such purpose.
g. The
Company shall (i) cause all the Registrable Securities to be listed on each
securities exchange on which securities of the same class or series issued
by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange, or (ii) secure
designation and quotation of all the Registrable Securities on the Principal
Market. The Company shall pay all fees and expenses in connection with
satisfying its obligation under this Section.
h. The
Company shall cooperate with the Investor to facilitate the timely preparation
and delivery of certificates (not bearing any restrictive legend) representing
the Registrable Securities to be offered pursuant to any registration statement
and enable such certificates to be in such denominations or amounts as the
Investor may reasonably request and registered in such names as the Investor
may
request.
i. The
Company shall at all times provide a transfer agent and registrar with respect
to its Common Stock.
j. If
reasonably requested by the Investor, the Company shall (i) immediately
incorporate in a prospectus supplement or post-effective amendment such
information as the Investor believes should be included therein relating to
the
sale and distribution of Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being sold,
the
purchase price being paid therefor and any other terms of the offering of the
Registrable Securities; (ii) make all required filings of such prospectus
supplement or post-effective amendment as soon as notified of the matters to
be
incorporated in such prospectus supplement or post-effective amendment; and
(iii) supplement or make amendments to any registration
statement.
4
k. The
Company shall use its reasonable best efforts to cause the Registrable
Securities covered by the any registration statement to be registered with
or
approved by such other governmental agencies or authorities as may be necessary
to consummate the disposition of such Registrable Securities.
l. Within
one (1) Trading Day after any registration statement which includes the
Registrable Securities is ordered effective by the SEC, 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 Investor)
confirmation that such registration statement has been declared effective by
the
SEC in the form attached hereto as Exhibit
A.
Thereafter, if requested by the Buyer at any time, the Company shall require
its
counsel to deliver to the Buyer a written confirmation whether or not the
effectiveness of such registration statement has lapsed at any time for any
reason (including, without limitation, the issuance of a stop order) and whether
or not the registration statement is current and available to the Buyer for
sale
of all of the Registrable Securities.
m. The
Company shall take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of Registrable Securities pursuant to
any
registration statement.
4. OBLIGATIONS
OF THE INVESTOR.
a. The
Company shall notify the Investor in writing of the information the Company
reasonably requires from the Investor in connection with any registration
statement hereunder. The Investor shall furnish to the Company such information
regarding itself, the Registrable Securities held by it and the intended method
of disposition of the Registrable Securities held by it as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company
may
reasonably request.
b. The
Investor agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of any registration
statement hereunder.
c. The
Investor agrees that, upon receipt of any notice from the Company of the
happening of any event or existence of facts of the kind described in Section
3(f) or the first sentence of 3(e), the Investor will immediately discontinue
disposition of Registrable Securities pursuant to any registration statement(s)
covering such Registrable Securities until the Investor's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3(f) or the
first sentence of 3(e). Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to promptly deliver shares of Common Stock
without any restrictive legend in accordance with the terms of the Purchase
Agreement in connection with any sale of Registrable Securities with respect
to
which an Investor has entered into a contract for sale prior to the Investor's
receipt of a notice from the Company of the happening of any event of the kind
described in Section 3(f) or the first sentence of 3(e) and for which the
Investor has not yet settled.
5. EXPENSES
OF REGISTRATION.
All
reasonable expenses, other than sales or brokerage commissions, incurred in
connection with registrations, filings or qualifications pursuant to Sections
2
and 3, including, without limitation, all registration, listing and
qualifications fees, printers and accounting fees, and fees and disbursements
of
counsel for the Company, shall be paid by the Company.
5
6. INDEMNIFICATION.
a. To
the
fullest extent permitted by law, the Company will, and hereby does, indemnify,
hold harmless and defend the Investor, each Person, if any, who controls the
Investor, the members, the directors, officers, partners, employees, agents,
representatives of the Investor and each Person, if any, who controls the
Investor within the meaning of the 1933 Act or the Securities Exchange Act
of
1934, as amended (the "1934
Act")
(each,
an "Indemnified
Person"),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, attorneys' fees, amounts paid in settlement or expenses, joint
or several, (collectively, "Claims")
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto ("Indemnified
Damages"),
to
which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out
of
or are based upon: (i) any untrue statement or alleged untrue statement of
a
material fact in the Registration Statement, any New Registration Statement
or
any post-effective amendment thereto or in any filing made in connection with
the qualification of the offering under the securities or other "blue sky"
laws
of any jurisdiction in which Registrable Securities are offered ("Blue
Sky Filing"),
or
the omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact contained in
the
final prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading, (iii) any violation or alleged violation by the Company
of
the 1933 Act, the 1934 Act, any other law, including, without limitation, any
state securities law, or any rule or regulation thereunder relating to the
offer
or sale of the Registrable Securities pursuant to the Registration Statement
or
any New Registration Statement or (iv) any material violation by the Company
of
this Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, "Violations").
The
Company shall reimburse each Indemnified Person promptly as such expenses are
incurred and are due and payable, for any legal fees or other reasonable
expenses incurred by them in connection with investigating or defending any
such
Claim. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(a): (i) shall not apply
to
a Claim by an Indemnified Person arising out of or based upon a Violation which
occurs in reliance upon and in conformity with information furnished in writing
to the Company by such Indemnified Person expressly for use in connection with
the preparation of the Registration Statement, any New Registration Statement
or
any such amendment thereof or supplement thereto, if such prospectus was timely
made available by the Company pursuant to Section 3(c) or Section 3(e); (ii)
with respect to any superceded prospectus, shall not inure to the benefit of
any
such person from whom the person asserting any such Claim purchased the
Registrable Securities that are the subject thereof (or to the benefit of any
person controlling such person) if the untrue statement or omission of material
fact contained in the superceded prospectus was corrected in the revised
prospectus, as then amended or supplemented, if such revised prospectus was
timely made available by the Company pursuant to Section 3(c) or Section 3(e),
and the Indemnified Person was promptly advised in writing not to use the
incorrect prospectus prior to the use giving rise to a violation and such
Indemnified Person, notwithstanding such advice, used it; (iii) shall not be
available to the extent such Claim is based on a failure of the Investor to
deliver or to cause to be delivered the prospectus made available by the
Company, if such prospectus was timely made available by the Company pursuant
to
Section 3(c) or Section 3(e); and (iv) shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer
of
the Registrable Securities by the Investor pursuant to Section
9.
6
b. In
connection with the Registration Statement or any New Registration Statement,
the Investor agrees to severally and not jointly indemnify, hold harmless and
defend, to the same extent and in the same manner as is set forth in Section
6(a), the Company, each of its directors, each of its officers who signs the
Registration Statement or any New Registration Statement, each Person, if any,
who controls the Company within the meaning of the 1933 Act or the 1934 Act
(collectively and together with an Indemnified Person, an "Indemnified
Party"),
against any Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim
or
Indemnified Damages arise out of or are based upon any Violation, in each case
to the extent, and only to the extent, that such Violation occurs in reliance
upon and in conformity with written information about the Investor set forth
on
Exhibit
B
attached
hereto and furnished to the Company by the Investor expressly for use in
connection with such registration statement; and, subject to Section 6(d),
the
Investor will reimburse any legal or other expenses reasonably incurred by
them
in connection with investigating or defending any such Claim; provided, however,
that the indemnity agreement contained in this Section 6(b) and the agreement
with respect to contribution contained in Section 7 shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
prior
written consent of the Investor, which consent shall not be unreasonably
withheld; provided, further, however, that the Investor shall be liable under
this Section 6(b) for only that amount of a Claim or Indemnified Damages as
does
not exceed the net proceeds to the Investor as a result of the sale of
Registrable Securities pursuant to such registration statement. Such indemnity
shall remain in full force and effect regardless of any investigation made
by or
on behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Investor pursuant to Section 9.
c. Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section
6
of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such Indemnified Person
or
Indemnified Party shall, if a Claim in respect thereof is to be made against
any
indemnifying party under this Section 6, deliver to the indemnifying party
a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party
so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as
the
case may be; provided, however, that an Indemnified Person or Indemnified Party
shall have the right to retain its own counsel with the fees and expenses to
be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by
such
counsel in such proceeding. The Indemnified Party or Indemnified Person shall
cooperate fully with the indemnifying party in connection with any negotiation
or defense of any such action or claim by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to the
Indemnified Party or Indemnified Person which relates to such action or claim.
The indemnifying party shall keep the Indemnified Party or Indemnified Person
fully apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. No indemnifying party shall be liable for
any
settlement of any action, claim or proceeding effected without its written
consent, provided, however, that the indemnifying party shall not unreasonably
withhold, delay or condition its consent. No indemnifying party shall, without
the consent of the Indemnified Party or Indemnified Person, consent to entry
of
any judgment or enter into any settlement or other compromise which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such claim or litigation. Following indemnification as provided
for hereunder, the indemnifying party shall be subrogated to all rights of
the
Indemnified Party or Indemnified Person with respect to all third parties,
firms
or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 6, except to the extent that the indemnifying party
is
prejudiced in its ability to defend such action.
7
d. The
indemnification required by this Section 6 shall be made by periodic payments
of
the amount thereof during the course of the investigation or defense, as and
when bills are received or Indemnified Damages are incurred.
e. The
indemnity agreements contained herein shall be in addition to (i) any cause
of
action or similar right of the Indemnified Party or Indemnified Person against
the indemnifying party or others, and (ii) any liabilities the indemnifying
party may be subject to pursuant to the law.
7. CONTRIBUTION.
To
the
extent any indemnification by an indemnifying party is prohibited or limited
by
law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the
fullest extent permitted by law; provided, however, that: (i) no seller of
Registrable Securities guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 0000 Xxx) shall be entitled to contribution
from
any seller of Registrable Securities who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.
8. REPORTS
AND DISCLOSURE UNDER THE SECURITIES ACTS.
With
a
view to making available to the Investor the benefits of Rule 144 promulgated
under the 1933 Act or any other similar rule or regulation of the SEC that
may
at any time permit the Investor to sell securities of the Company to the public
without registration ("Rule
144"),
the
Company agrees, at the Company’s sole expense, to:
a. make
and
keep public information available, as those terms are understood and defined
in
Rule 144;
b. file
with
the SEC in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company remains
subject to such requirements and the filing of such reports and other documents
is required for the applicable provisions of Rule 144; and
c. furnish
to the Investor so long as the Investor owns Registrable Securities, promptly
upon request, (i) a written statement by the Company that it has complied with
the reporting and or disclosure provisions of Rule 144, the 1933 Act and the
1934 Act, (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and (iii)
such other information as may be reasonably requested to permit the Investor
to
sell such securities pursuant to Rule 144 without registration.
d. take
such
additional action as is requested by the Investor to enable the Investor to
sell
the Registrable Securities pursuant to Rule 144, including, without limitation,
delivering all such legal opinions, consents, certificates, resolutions and
instructions to the Company’s Transfer Agent as may be requested from time to
time by the Investor and otherwise fully cooperate with Investor and Investor’s
broker to effect such sale of securities pursuant to Rule 144.
8
The
Company agrees that damages may be an inadequate remedy for any breach of the
terms and provisions of this Section 8 and that Investor shall, whether or
not
it is pursuing any remedies at law, be entitled to equitable relief in the
form
of a preliminary or permanent injunctions, without having to post any bond
or
other security, upon any breach or threatened breach of any such terms or
provisions.
| 9. |
ASSIGNMENT
OF REGISTRATION RIGHTS.
|
The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Investor, including by merger or
consolidation. The Investor may not assign its rights under this Agreement
without the written consent of the Company, other than to an affiliate of the
Investor controlled by Xxxxxx X. Xxxxxx or Xxxxxx X. Xxxxxxxxxx.
10. AMENDMENT
OF REGISTRATION RIGHTS.
Provisions
of this Agreement may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the
Investor.
11. MISCELLANEOUS.
a. A
Person
is deemed to be a holder of Registrable Securities whenever such Person owns
or
is deemed to own of record such Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company shall act upon the
basis
of instructions, notice or election received from the registered owner of such
Registrable Securities.
b. Any
notices, consents, waivers or other communications required or permitted to
be
given under the terms of this Agreement must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one (1) Trading Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:
9
If
to the
Company:
Golden
Phoenix Minerals, Inc.
0000
X.
Xxxxxx Xxx, Xxxxx 000
Xxxxxx,
Xxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention:
Chief
Executive Officer
With
a
copy to:
Xxxxxxxxxxx
& Xxxxxxxx LLP
000
Xxxxx
Xxxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx,
XX
00000
Telephone: 000-000-0000
Facsimile: 305-358-7095
Attention: Xxxxxxx
X. Xxxxxx, Esq.
If
to the
Investor:
Fusion
Capital Fund II, LLC
000
Xxxxxxxxxxx Xxxx Xxxxx, Xxxxx 0-000
Xxxxxxx,
XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx
X.
Xxxxxx
or
at
such other address and/or facsimile number and/or to the attention of such
other
person as the recipient party has specified by written notice given to each
other party three (3) Trading Days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C)
provided by a nationally recognized overnight delivery service, shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from
a
nationally recognized overnight delivery service in accordance with clause
(i),
(ii) or (iii) above, respectively.
10
c. Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as
a
waiver thereof.
d. The
corporate laws of the State of Minnesota shall govern all issues concerning
the
relative rights of the Company and its stockholders. All other questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of Illinois,
without giving effect to any choice of law or conflict of law provision or
rule
(whether of the State of Illinois or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of
Illinois. Each party hereby irrevocably submits to the exclusive jurisdiction
of
the state and federal courts sitting the City of Chicago, for the adjudication
of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is
not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the
address for such notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. If any provision of this Agreement
shall
be invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
e. This
Agreement, and the Purchase Agreement constitute the entire agreement among
the
parties hereto with respect to the subject matter hereof and thereof. There
are
no restrictions, promises, warranties or undertakings, other than those set
forth or referred to herein and therein. This Agreement and the Purchase
Agreement supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof.
f. Subject
to the requirements of Section 9, this Agreement shall inure to the benefit
of
and be binding upon the permitted successors and assigns of each of the parties
hereto.
g. The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
h. This
Agreement may be executed in identical counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same agreement.
This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.
i. Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
11
j. The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent and no rules of strict construction
will
be applied against any party.
k. This
Agreement is intended for the benefit of the parties hereto and their respective
permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.
*
* * * * *
12
IN
WITNESS WHEREOF,
the
parties have caused this Registration Rights Agreement to be duly executed
as of
day and year first above written.
THE
COMPANY:
GOLDEN
PHOENIX MINERALS, INC.
By:
/s/ Xxxxxxx X. Xxxxxx
Name:
Xxxxxxx X. Xxxxxx
Title:
Interim Chief Executive Officer
BUYER:
FUSION
CAPITAL FUND II, LLC
BY:
FUSION CAPITAL PARTNERS, LLC
BY:
ROCKLEDGE CAPITAL CORPORATION
By:
/s/ Xxxx Xxxxxxxxxx
Name:
Xxxx Xxxxxxxxxx
Title:
President
13
EXHIBIT
A
FORM
OF NOTICE OF EFFECTIVENESS
OF
REGISTRATION STATEMENT
[Date]
Nevada
Agency & Trust
00
X.
Xxxxxxx, Xxxxx 000
Xxxx,
Xxxxxx 00000
Attention:
Xxxxxx Xxxxxxxxxx
RE:
_________________
Ladies
and Gentlemen:
We
are
counsel to GOLDEN
PHOENIX MINERALS, INC.,
a
Minnesota corporation (the "Company"),
and
have represented the Company in connection with that certain Common Stock
Purchase Agreement, dated as of _________, 2006 (the "Purchase
Agreement"),
entered into by and between the Company and Fusion Capital Fund II, LLC (the
"Buyer")
pursuant to which the Company may sell to the Buyer up to Six Million Dollars
($6,000,000) of the Company's Common Stock, no par value per share (the
"Common
Stock")
in
accordance with the terms of the Purchase Agreement. The (the "Purchase
Shares.")
In
addition, pursuant to the Stock Purchase Agreement, the Company issued to the
Buyer 2,191,919 shares of Common Stock (the
"Commitment Shares").
Pursuant to the Purchase Agreement, the Company also has entered into a
Registration Rights Agreement, dated as of ______, 2006, with the Buyer (the
"Registration
Rights Agreement")
pursuant to which the Company agreed, among other things, to register the
Purchase Shares, and the Commitment Shares under the Securities Act of 1933,
as
amended (the "1933
Act").
In
connection with the Company's obligations under the Purchase Agreement and
the
Registration Rights Agreement, on _______, 200_, the Company filed a
Registration Statement (File No. 333-_________) (the "Registration
Statement")
with
the Securities and Exchange Commission (the "SEC")
relating to the sale of the Purchase Shares, and the Commitment
Shares.
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 5:00 P.M. on __________,
200_ 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 Purchase Shares, and the Commitment Shares are available for sale under
the 1933 Act pursuant to the Registration Statement.
The
Buyer
has confirmed it shall comply with all securities laws and regulations
applicable to it including applicable prospectus delivery requirements upon
sale
of the Purchase Shares, and the Commitment Shares.
Very
truly yours,
[Company
Counsel]
By:____________________
CC:
Fusion
EXHIBIT
B
Information
About The Investor Furnished To The Company By The Investor
Expressly
For Use In Connection With The Registration Statement
As
of the
date of the Purchase Agreement, Fusion Capital beneficially owned _______ shares
of common stock of the Company. Xxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxxxxxx,
the
principals of Fusion Capital, are deemed to be beneficial owners of all of
the
shares of common stock owned by Fusion Capital. Messrs. Xxxxxx and Xxxxxxxxxx
have shared voting and investment power over the shares being offered under
the
prospectus filed with the SEC in connection with the transactions contemplated
under the Purchase Agreement.
