REGISTRATION RIGHTS AGREEMENT
EXHIBIT
10.67
EXECUTION
VERSION
REGISTRATION
RIGHTS AGREEMENT
(this
“Agreement”),
dated
as of December 10, 2007, by and between TEKOIL
& GAS CORPORATION,
a
Delaware corporation, with offices located at 0000 Xx. Xxxxxxxx Xxxx., Xxxxx
000, Xxxxxxx, Xxxxxxx 00000 (the “Company”),
and
the “Buyer” so described on the signature page hereto (referred to as
“Buyer”).
PRELIMINARY
STATEMENTS
A. Pursuant
to a certain Purchase Agreement by and between the parties of even date herewith
(the “Purchase
Agreement”),
the
Company has agreed to issue to the Buyer 3,571,429 shares of the Company’s
common stock, par value $0.000001 per share (the “Common
Stock”)
and
the “Warrant” described below;
B. Pursuant
to a certain Warrant to Purchase Common Stock by and between the parties of
even
date herewith, (“Warrant”)
the
Company has agreed to issue up to an additional 3,571,429 shares of Common
Stock
on appropriate exercise thereunder and subject to the terms thereof;
and
C.
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.
a. As
used
in this Agreement, the following terms shall have the following
meanings:
(i) “Investor”
means
the Buyer and any transferee or assignee thereof who agrees to become bound
by
the provisions of this Agreement in accordance with Section 9
hereof.
(ii) “register,”
“registered,”
and
“registration”
refer
to a registration effected by preparing and filing a Registration Statement
or
Statements 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
by
the United States Securities and Exchange Commission (the “SEC”).
(iii) “Registrable
Securities”
means
the shares of Common Stock issued pursuant to the Purchase Agreement and the
Shares of common stock issued or issuable pursuant to the Warrant.
(iv) “Registration
Period”
means
the period commencing on the date on which the Registration Statement filed
pursuant to this Agreement is declared effective by the SEC and expiring on
the
date that (A) the Investor may sell the Registrable Securities pursuant to
Rule
144 (k) promulgated under the 1933 Act, or (B) the Investor has sold all of
the
Registrable Securities.
(v) “Registration
Statement”
means
a
registration statement of the Company under the 1933 Act, as described in
Section 1.a.(ii) above.
b. Capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings set forth in the Purchase Agreement.
2. REGISTRATION
RIGHTS.
Mandatory
Registration.
The
Company shall prepare and file with the SEC a Registration Statement on Form
S-3
(or, if such form is unavailable for such a registration, on such other form
as
is available for such a registration) covering the resale of the Registrable
Securities within 30 days of the date of the Purchase Agreement (the
“Filing
Date”).
The
Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided to and
approved by the Buyer and their counsel prior to its filing or other submission,
such approval not to be unreasonably withheld. The Company will use its
reasonable efforts to cause such Registration Statement to become effective
within 90 days of filing (the “Effective
Date”).
3. OBLIGATIONS
OF THE COMPANY.
In
connection with the registration of the Registrable Securities, the Company
shall have the following obligations:
a. A
Registration Statement filed pursuant to this Agreement (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. The
Company shall prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and
the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times during
the
Registration Period, and, during the Registration 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 until such
time
as all of such Registrable Securities have been disposed of in accordance with
the intended methods of disposition by the seller or sellers thereof as set
forth in the Registration Statement.
c. The
Company shall furnish to the Investor if its Registrable Securities are included
in the Registration Statement and its legal counsel (i) promptly after the
same
is prepared and publicly distributed, filed with the SEC, or received by the
Company, one copy of the Registration Statement and any amendment thereto,
each
preliminary prospectus and prospectus and each amendment or supplement thereto,
and (ii) such number of copies of a prospectus, including a preliminary
prospectus, and all amendments and supplements thereto and such other documents
as the Investor may reasonably request in order to facilitate the disposition
of
the Registrable Securities owned by the Investor.
d.
As
promptly as practicable after becoming aware of such event, the Company shall
notify the Investor of the happening of any event, of which the Company has
knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact
or
omission 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 use its best efforts promptly to prepare a supplement
or amendment to the Registration Statement to correct such untrue statement
or
omission, and deliver such number of copies of such supplement or amendment
to
the Investor as the Investor may reasonably request.
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e.
The
Company shall use its best efforts to prevent the issuance of any stop order
or
other suspension of effectiveness of a Registration Statement, and, if such
an
order is issued, to obtain the withdrawal of such order at the earliest possible
moment and to notify the Investor if the Investor holds Registrable Securities
being sold (or, in the event of an underwritten offering, the managing
underwriters) of the issuance of such order and the resolution thereof.
f.
The
Company shall hold in confidence and not make any disclosure of information
concerning the Investor provided to the Company unless (i) the Company
determines disclosure of such information is necessary to comply with federal
or
state securities laws, (ii) the disclosure of such information is necessary
to
avoid or correct a misstatement or omission in any Registration Statement,
(iii)
the release of such information is ordered pursuant to a subpoena or other
final, non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to
the
public other than by disclosure in violation of this or any other agreement. The
Company agrees that it shall, upon learning that disclosure of such information
concerning the Investor is sought in or by a court or governmental body of
competent jurisdiction or through other means, give prompt notice to the
Investor and allow the Investor, at the Investor’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, such information.
g. The
Company and the Investor agree that the Investor will suffer damages if the
Registration Statement is not filed by the Filing Date and not declared
effective by the SEC by the Effective Date, and maintained in the manner
contemplated by Section 3(b) hereof, and it would not be feasible to ascertain
the extent of such damages with precision. Accordingly, if (A) the Registration
Statement is not filed on or before the Filing Date, (B) is not declared
effective on or before the Effective Date, or (C) the Registration Statement
is
filed and declared effective but shall thereafter cease to be effective without
being succeeded within fifteen (15) business days by an effective replacement
or
amended registration statement or for a period of time which shall exceed 30
days in the aggregate per year (defined as a period of 365 days commencing
on
the actual Effective Date (each such event referred to in clauses (A) through
(C) of this Section 3(g) is referred to herein as a “Non-Registration
Event”),
then
the Company shall deliver to the holder of two percent (2%) of the Purchase
Price (as defined the Purchase Agreement) for each thirty (30) days or part
thereof (the “Liquidated
Damages”).
The
Company must pay the Liquidated Damages in cash. The Liquidated Damages must
be
paid within ten (10) days after the end of each thirty (30) day period or
shorter part thereof for which Liquidated Damages are payable.
4. OBLIGATIONS
OF THE INVESTOR.
In
connection with the registration of the Registrable Securities, the Investor
shall have the following obligations:
a. It
shall
be a condition precedent to the obligations of the Company to complete the
registration of Registrable Securities pursuant to this Agreement that 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. At
least five (5) days prior to the first anticipated filing date of the
Registration Statement, the Company shall notify the Investor of the information
the Company requires from the Investor if the Investor elects to have any of
the
Investor’s Registrable Securities included in the Registration Statement.
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b. The
Investor by the Investor’s acceptance of the Registrable Securities agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of the Registration Statement hereunder, unless
the Investor has notified the Company in writing of the Investor’s election to
exclude all of the Investor’s Registrable Securities from the Registration
Statement.
c. The
Investor agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 3(d) or 3(e), the
Investor will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until the Investor’s receipt of the copies of the supplemented or amended
prospectus contemplated by Section 3(d) or 3(e) and, if so directed by the
Company, the Investor shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of destruction)
all copies in the Investor’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such
notice.
d. Investor
may not participate in any underwritten registration hereunder unless the
Investor (i) agrees to sell the Investor’s Registrable Securities on the basis
provided in any underwriting arrangements, (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements, and (iii) agrees to pay its pro rata share of all underwriting
discounts and commissions.
e. The
Investor shall give notice to the Company when it has sold all of the
Registrable Securities.
5. EXPENSES
OF REGISTRATION.
All
reasonable expenses, other than underwriting discounts and 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, the fees and disbursements
of
counsel for the Company, shall be borne by the Company. Notwithstanding the
foregoing, the Investor shall be responsible for all expenses, fees and
disbursements incurred by such Investor or on such Investor’s behalf, including
all fees and disbursements of counsel to the Investor.
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6. INDEMNIFICATION.
In
the
event any Registrable Securities are included in a Registration Statement under
this Agreement:
a. To
the
extent permitted by law, the Company will indemnify, hold harmless and defend
(i) the Investor who holds such Registrable Securities, and (ii) the
directors, officers and each person who controls any Investor within the meaning
of the 1933 Act or the Securities Exchange Act of 1934, as amended (the
“1934
Act”),
if
any, (each, an “Indemnified
Person”),
against any losses, claims, damages, liabilities or expenses (joint or several)
(collectively, “Claims”)
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 a Registration Statement or the omission or alleged omission
to
state a material fact therein required to be stated or necessary to make the
statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus if used
prior to the effective date of such Registration Statement, or 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, or (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 a Registration Statement
(the
matters in the foregoing clauses (i) through (iii) being, collectively,
“Violations”).
Subject to the restrictions set forth in Section 6(d) with respect to the number
of legal counsel, the Company shall reimburse the Investor or controlling
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 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 any Indemnified Person expressly for
use
in connection with the preparation of the 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) hereof; (ii) with respect
to
any preliminary 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 preliminary prospectus was corrected in the prospectus, as
then
amended or supplemented, if such prospectus was timely made available by the
Company pursuant to Section 3(c) hereof; (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; 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.
b. In
connection with any Registration Statement in which the Investor is
participating, the Investor agrees to indemnify, hold harmless and defend,
to
the same extent and in the same manner set forth in Section 6(a), the Company,
each of its directors, each of its officers who signs the Registration
Statement, each person, if any, who controls the Company within the meaning
of
the 1933 Act or the 1934 Act, any underwriter and any other stockholder selling
securities pursuant to the Registration Statement or any of its directors or
officers or any person who controls such stockholder or underwriter within
the
meaning of the 1933 Act or the 1934 Act (collectively and together with an
indemnified Person, an “Indemnified
Party”),
against any Claim to which any of them may become subject, under the 1933 Act,
the 1934 Act or otherwise, insofar as such Claim arises out of or is 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
furnished to the Company by the Investor expressly for use in connection with
such Registration Statement or to the extent such Claim is based upon any
violation or alleged violation by the Investor of the 1933 Act, 1934 Act or
any
other law; and 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) 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
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 Investors pursuant to Section 9. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(b) with respect to any preliminary prospectus shall
not inure to the benefit of any Indemnified Party if the untrue statement or
omission of material fact contained in the preliminary prospectus was corrected
on a timely basis in the prospectus, as then amended or
supplemented.
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c. The
Company shall be entitled to receive indemnities from underwriters, selling
brokers, dealer managers and similar securities industry professionals
participating in any distribution, to the same extent as provided above, with
respect to information such persons so furnished in writing by such persons
expressly for inclusion in the Registration Statement.
d. Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section
6
of notice of the commencement of any action (including any governmental action),
such Indemnified Person or Indemnified Party shall, if a Claim in respect
thereof is to 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 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. 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 such expense, loss, damage or liability is incurred
and is due and payable.
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 contribution
shall be made under circumstances where the maker would not have been liable
for
indemnification under the fault standards set forth in Section 6, (ii) 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 such fraudulent
misrepresentation, and (iii) 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. 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.
Any amendment or waiver effected in accordance with this Section 10 shall be
binding upon the Investor and the Company.
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9. MISCELLANEOUS.
a. A
person
or entity is deemed to be a holder of Registrable Securities whenever such
person or entity owns of record such Registrable Securities. If the Company
receives conflicting instructions, notices or elections from two or more persons
or entities 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 required or permitted to be given under the terms of this Agreement
shall be sent by registered or certified mail, return receipt requested, or
delivered personally or by courier and shall be effective five days after being
placed in the mail, if mailed, or upon receipt, if delivered personally or
by
courier, in each case addressed to a party. The addresses for such
communications shall be:
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If to the Company:
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Tekoil
& Gas Corporation
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0000
Xx. Xxxxxxxx Xxxx., Xxxxx 000
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Xxxxxxx,
Xxxxxxx 00000
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Telephone:
(000) 000-0000
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Telecopy:
(000) 000-0000
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Attention:
Mr. Xxxx Xxxxxxx
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With
copy to:
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Xxxxx
& Xxxxxxxxx LLP
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000
Xxxxx Xxxxxx Xxxxxx
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Xxxxxxx,
XX 00000
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Telephone:
(000) 000-0000
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Telecopy:
(000) 000-0000
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Attention:
Xxxxxxx X. Xxxxxx, Esq.
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If
to the
Buyer, at the address of Buyer set forth on the signature page
below.
Each
party shall provide notice to the other party of any change in
address.
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. This
Agreement shall be enforced, governed by and construed in accordance with the
laws of the State of Delaware applicable to agreements made and to be performed
entirely within such State. In the event that any provision of this Agreement
is
invalid or unenforceable under any applicable statute or rule of law, then
such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule
of
law. Any provision hereof which may prove invalid or unenforceable under any
law
shall not affect the validity or enforceability of any other provision
hereof.
e. This
Agreement, the Warrant 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
Warrant Agreement supersede all prior agreements and understandings among the
parties hereto with respect to the subject matter hereof and
thereof.
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f. Subject
to the restrictions on transfer provided in the agreements described herein
and
under applicable securities laws, this Agreement shall inure to the benefit
of
and be binding upon the 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 two or more 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.
[Signatures
on Following Page]
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IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as
of day and year first above written.
| “Company” | |
| TEKOIL & GAS CORPORATION | |
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By:
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/s/
Xxxx X. Western
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Xxxx
Xxxxxxx, Chairman and CEO
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“Buyer”
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RAB
Special Situations (Master) Fund Limited by
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/s/
Xxxxx Xxxxxxx
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(Signature)
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Xxxxx
Xxxxxxx
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(Name)
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/s/
Xxxx Xxxxxxxxx
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(Signature)
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Xxxx
Xxxxxxxxx
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(Name)
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Authorized
signatories for RAB Capital plc for and on behalf of RAB Special
Situations (Master) Fund Limited
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c/o
RAB Capital plc
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0
Xxxx Xxxxxx
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Xxxxxx
XX0X 0XX
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Xxxxxx
Xxxxxxx
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