EXHIBIT 10.2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of
November 29, 2006, is by and among Galaxy Energy Corporation, a Colorado
corporation (the "COMPANY"), and the undersigned buyers (each, a "BUYER" and
collectively, the "BUYERS").
WHEREAS:
A. PetroHunter Energy Corporation, a Nevada corporation
("PETROHUNTER"), has agreed to purchase from the Company and Dolphin Energy
Corporation, a Nevada corporation (the "PRB SALE"), all of their Leased Real
Property (as defined in the 2005 Purchase Agreement, (as defined below)) in the
Powder River Basin of Wyoming and Montana, as more specifically set forth on
SCHEDULE 1 to the November 2006 Waiver and Amendment (as defined below) (the
"PRB ASSETS").
B. The Company and certain of the Buyers (collectively, the "2004
BUYERS") entered into that certain Securities Purchase Agreement, dated as of
August 19, 2004, pursuant to which the Company issued to the 2004 Buyers senior
secured convertible notes (such notes, together with any promissory notes or
other securities issued in exchange or substitution therefor or replacement
thereof, and as any of the same may be amended, restated, supplemented or
otherwise modified and in effect from time to time, the "2004 NOTES"), dated
August 19, 2004, in an aggregate original principal amount of $15,000,000 and
warrants, dated August 19, 2004, to purchase initially an aggregate of 5,194,806
shares (subject to adjustment as provided therein) of the common stock, par
value $0.001 per share, of the Company, and subsequently issued to the 2004
Buyers senior secured convertible notes, dated October 27, 2004, in an aggregate
original principal amount of $5,000,000.
C. The Company and certain of the Buyers (the "2005 BUYERS") entered
into that certain Securities Purchase Agreement, dated as of May 31, 2005,
pursuant to which the 2005 Buyers acquired senior secured convertible notes in
an aggregate original principal amount of $10,000,000 (such notes, together with
any promissory notes or other securities issued in exchange or substitution
therefor or replacement thereof, and as any of the same may be amended,
restated, supplemented or otherwise modified and in effect from time to time,
the "2005 NOTES" and, collectively with the 2004 Notes, the "NOTES").
D. The obligations of the Company and its subsidiaries under the Notes
and certain other Transaction Documents (as defined in the November 2006 Waiver
and Amendment) are collateralized by, among other things, the PRB Assets.
E. The consent of the Buyers is required for the Company and
PetroHunter to consummate the PRB Sale.
F. The Company and PetroHunter are consummating the PRB Sale on the
date hereof.
G. In connection with the consent of the Buyers to the PRB Sale (the
"CONSENT") pursuant to that certain November 2006 Waiver and Amendment (the
"NOVEMBER 2006 WAIVER
AND AMENDMENT"), dated as of even date herewith, by and among the Buyers and the
Company, the Company has agreed that (a) in the event that an Approved PRB Sale
(as defined the November 2006 Waiver and Consent) is not consummated on or
before December 31, 2006, it shall issue an aggregate of 1,000,000 shares
(subject to proportionate adjustment for stock splits, stock dividends or
similar events occurring after the date hereof) (the "DECEMBER 2006 COMMON
SHARES") of the Company's common stock, $0.001 par value per share (the "COMMON
STOCK") to the Buyers pursuant to Section 6(c) thereof, unless certain
conditions are satisfied, and (b) in the event that an Approved PRB Sale is not
consummated on or before January 31, 2007, it shall issue an additional
aggregate of 1,000,000 shares (subject to proportionate adjustment for stock
splits, stock dividends or similar events occurring after the date hereof) (the
"JANUARY 2007 COMMON SHARES" and, collectively with the December 2006 Common
Shares, the "COMMON SHARES") of Common Stock to the Buyers pursuant to Section
6(c) thereof, unless certain conditions are satisfied.
G. To induce the Buyers to execute and deliver the November 2006 Waiver
and Amendment and grant the Consent pursuant thereto, the Company has agreed to
provide the Buyers with certain registration rights with respect to the Common
Shares upon issuance to the Buyers 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 each
of the Buyers hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the
following meanings:
a. "1934 ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, or any similar successor
statute.
b. "INVESTOR" means a 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.
c. "PERSON" means an individual, a limited liability company,
a partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
d. "PRINCIPAL MARKET" means the principal securities exchange
or trading market for a security.
e. "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in
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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 or delayed
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").
f. "REGISTRABLE SECURITIES" means (i) the Common Shares, and
(ii) any shares of capital stock issued or issuable with respect to the Common
Shares described in clause (i) as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise; provided, however,
that any such Registrable Securities shall cease to be Registrable Securities
when a Registration Statement with respect to the sale of such securities
becomes effective under the 1933 Act and such securities (a) are disposed of in
accordance with such Registration Statement, (b) are sold in accordance with
Rule 144 (as defined in Section 8) or (c) become transferable without any
restrictions in accordance with Rule 144(k) (or any successor provision).
g. "REGISTRATION STATEMENT" means a registration statement
or registration statements of the Company filed under the 1933 Act covering the
Registrable Securities.
h. "TRADING DAY" means any day on which the Common Stock
is traded on its Principal Market; provided that "TRADING DAY" shall not include
any day on which the Common Stock is scheduled to trade, or actually trades, on
its Principal Market for less than 4.5 hours.
i. "WEIGHTED AVERAGE PRICE OF THE COMMON STOCK" means as of
any date, the dollar volume-weighted average price for the Common Stock on its
Principal Market during the period beginning at 9:30 a.m. New York Time (or such
other time as its Principal Market publicly announces is the official open of
trading) and ending at 4:00 p.m. New York Time (or such other time as its
Principal Market publicly announces is the official close of trading) as
reported by Bloomberg Financial Markets ("BLOOMBERG") through its "Volume at
Price" functions, or if the foregoing does not apply, the dollar volume-weighted
average price of Common Stock in the over-the-counter market on the electronic
bulletin board for Common Stock during the period beginning at 9:30 a.m. New
York Time (or such other time as such over-the-counter market publicly announces
is the official open of trading) and ending at 4:00 p.m. New York Time (or such
other time as such over-the-counter market publicly announces is the official
close of trading) as reported by Bloomberg, or if no dollar volume-weighted
average price is reported for Common Stock by Bloomberg for such hours, the
average of the highest closing bid price and the lowest closing ask price of any
of the market makers for Common Stock as reported in the "pink sheets" by the
National Quotation Bureau, Inc. If the Weighted Average Price cannot be
calculated for Common Stock on such date on any of the foregoing bases, the
Weighted Average Price of Common Stock on such date shall be the fair market
value as mutually determined by the Company and the Investors holding at least
two-thirds (2/3) of the Registrable Securities then outstanding as to which such
determination is being made. All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination or other similar
transaction during any period during which the Weighted Average Price of the
Common Stock is being determined.
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2. REGISTRATION.
a. MANDATORY REGISTRATION. Following the issuance of the Common
Shares, the Company shall prepare and file with the SEC a Registration Statement
on Form S-3, covering the resale of all of the Registrable Securities. In the
event that Form S-3 is unavailable for such a registration, the Company shall
use such other form as is available for such a registration, subject to the
provisions of Section 2(c). The Registration Statement prepared pursuant hereto
shall register for resale all of the Registrable Securities issued to the Buyers
in accordance with the November 2006 Waiver and Amendment. The Company shall use
its best efforts to have the Registration Statement declared effective by the
SEC as soon as practicable, but in no event later than April 20, 2007 (the
"EFFECTIVENESS DEADLINE").
b. LEGAL COUNSEL. Subject to Section 5 hereof, the Buyers
holding securities representing at least two-thirds (2/3) of the
then-outstanding Registrable Securities shall have the right to select one (1)
legal counsel to review and oversee any offering pursuant to this Section 2
("LEGAL COUNSEL"), which shall be Xxxxxx Xxxxxx Xxxxxxxx LLP or such other
counsel as thereafter designated in writing to the Company by the Investors
holding at least two-thirds (2/3) of the then-outstanding Registrable
Securities. The Company shall reasonably cooperate with Legal Counsel in
performing the Company's obligations under this Agreement.
c. INELIGIBILITY FOR FORM S-3. In the event that Form S-3 is not
available for the registration of the resale of Registrable Securities
hereunder, the Company shall undertake to register the Registrable Securities on
Form S-3 as soon as such form is available, provided that the Company shall
maintain the effectiveness of the Registration Statement then in effect until
such time as a Registration Statement on Form S-3 covering the Registrable
Securities has been declared effective by the SEC.
d. EFFECT OF FAILURE TO FILE AND OBTAIN AND MAINTAIN
EFFECTIVENESS OF REGISTRATION STATEMENT.
i. If (x) a Registration Statement covering Registrable
Securities and required to be filed by the Company pursuant to Section 2(a) of
this Agreement is not declared effective by the SEC on or before the
Effectiveness Deadline or (y) on any day after a Registration Statement has been
declared effective by the SEC sales of all the Registrable Securities required
to be included on such Registration Statement cannot be made (other than during
an Allowable Grace Period (as defined in Section 3(t))) pursuant to such
Registration Statement (including because of a failure to keep the such
Registration Statement effective or to disclose such information as is necessary
for sales to be made pursuant to such Registration Statement, then in each case,
as partial relief for the damages to any holder of Common Shares by reason of
any such delay in or reduction of its ability to sell the Common Shares (which
remedy shall not be exclusive of any other remedies available at law or in
equity), the Company shall pay to such holder an amount in cash equal to the
product of (A) the total number of Registrable Securities held by such holder,
multiplied by (B) the greater of (I) the arithmetic average of the Weighted
Average Price of the Common Stock on each of the five (5) consecutive Trading
Days immediately preceding January 1, 2006 and (II) the arithmetic average of
the Weighted Average Price of the Common Stock on each of the five (5)
consecutive Trading Days immediately preceding February 1, 2006 (subject in each
case to appropriate adjustment for any
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share dividend, share split, share combination or other similar transaction
occurring during such period), multiplied by (C) the sum of (i) 0.02, if such
Registration Statement is not declared effective by the Effectiveness Deadline,
plus (ii) the product of 0.000667 multiplied by, as the case may be, (I) in the
event of an occurrence described in clause (B) of this Section 2(d)(i)(x), the
number of days after the Effectiveness Deadline that the Registration Statement
is not initially declared effective by the SEC, or (II) in the event of an
occurrence described in Section 2(d)(i)(y), the number of days after the
Registration Statement has been declared effective by the SEC that the
Registration Statement is not available (other than during an Allowable Grace
Period) for the sale of all the Registrable Securities required to be included
on such Registration.
ii. Any payment to which a holder shall be entitled pursuant
to Section 2(d)(i) is referred to herein as a "REGISTRATION DELAY PAYMENT." A
Registration Delay Payment shall be paid on the earlier of (A) the last day of
the calendar month during which such Registration Delay Payment is incurred and
(B) the third Business Day after the event or failure giving rise to the
Registration Delay Payment is cured.
iii. In the event that a Registration Statement covering
any Registrable Securities and required to be filed by the Company pursuant to
Section 2(d)(i) of this Agreement is not declared effective by the SEC on or
before the Effectiveness Deadline, then, in addition to the Registration Delay
Payments and as additional partial relief for the damages to any holder of such
Registrable Securities by reason of any such delay in its ability to sell such
Registrable Securities (which remedy shall not be exclusive of any other
remedies available at law or in equity), the Company shall, no later than the
third (3rd) Business Day after the applicable Registration Statement is declared
effective by the SEC, pay such holder an amount in cash equal to the amount (if
greater than $0) equal to the product of (A) the total number of such
Registrable Securities held by such holder, multiplied by (B) the result of (I)
the arithmetic average of the Weighted Average Price of the Common Stock on each
of the five (5) consecutive Trading Days immediately preceding the Effectiveness
Deadline (subject to appropriate adjustment for any share dividend, share split,
share combination or other similar transaction occurring during such period),
minus (II) the arithmetic average of the Weighted Average Price of the Common
Stock on each of the five (5) consecutive Trading Days immediately preceding the
date on which such Registration Statement is declared effective by the SEC. The
payments to which a holder shall be entitled pursuant to this Section 2(d)(iii)
are referred to herein as "ADDITIONAL REGISTRATION DELAY PAYMENTS."
iv. In the event the Company fails to make any Registration
Delay Payment or Additional Registration Delay Payment in a timely manner, such
Registration Delay Payment or Additional Registration Delay Payment, as the case
may be, shall bear interest at the rate of the lesser of 2.0% per month
(prorated for partial months) or the highest lawful interest rate, in each case,
until paid in full.
3. RELATED OBLIGATIONS.
At such time as the Company is obligated to file a
Registration Statement with the SEC pursuant to Section 2(a), the Company will
use its 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:
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a. The Company shall prepare and file with the SEC a Registration
Statement with respect to the applicable Registrable Securities and use its best
efforts to cause such Registration Statement relating to the Registrable
Securities to become effective as soon as practicable after such filing (but in
no event later than the Effectiveness Deadline). No later than the first
Business Day after such Registration Statement becomes effective, the Company
will file with the SEC the final prospectus included therein pursuant to Rule
424 (or successor thereto) promulgated under the 1933 Act ("RULE 424"). The
Company shall keep each Registration Statement effective pursuant to Rule 415 at
all times until the earlier of (i) the date as of which the Investors may sell
all of the Registrable Securities covered by such Registration Statement without
restriction pursuant to Rule 144(k) (or successor thereto) promulgated under the
1933 Act or (ii) the date on which the Investors shall have sold all the
Registrable Securities covered by such Registration Statement (the "REGISTRATION
PERIOD"). Such Registration Statement (including any amendments or supplements
thereto and any prospectuses (preliminary, final, summary or free writing)
contained therein or related thereto 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. The term "best efforts" shall mean, among other
things, that the Company shall submit to the SEC, within two (2) Business Days
after the Company learns that no review of a particular Registration Statement
will be made by the staff of the SEC or that the staff has no further comments
on the Registration Statement, as the case may be, a request for acceleration of
effectiveness of such Registration Statement to a time and date not later than
forty eight (48) hours after the submission of such request.
b. The Company shall prepare and file with the SEC such amendments
(including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection with such Registration
Statement, which prospectus is to be filed pursuant to Rule 424, as may be
necessary to keep such 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 such 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.
c. The Company shall (i) permit Legal Counsel to review and
comment upon (A) any Registration Statement at least five (5) Business Days
prior to its filing with the SEC, and (B) all amendments and supplements to all
Registration Statements (except for Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K and any similar or
successor reports) within a reasonable number of days prior to their filing with
the SEC, and (ii) not file any document, registration statement, amendment or
supplement described in the foregoing clause (i) in a form to which Legal
Counsel reasonably objects. The Company shall not submit a request for
acceleration of the effectiveness of a Registration Statement or any amendment
or supplement thereto without providing prior notice thereof to Legal Counsel
and each Investor. The Company shall furnish to Legal Counsel, without charge,
(x) promptly after the same is prepared and filed with the SEC, one copy of any
Registration Statement and any amendment(s) thereto, including financial
statements and schedules, all documents incorporated therein by reference, and
all exhibits and (y) upon the effectiveness of any Registration
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Statement, one (1) copy of the prospectus included in such Registration
Statement and all amendments and supplements thereto. The Company shall
reasonably cooperate with Legal Counsel in performing the Company's obligations
pursuant to this Section 3.
d. The Company shall furnish to each Investor whose Registrable
Securities are included in any Registration Statement, without charge, (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 that
have not been filed via XXXXX, all exhibits and each preliminary prospectus,
(ii) upon the effectiveness of any Registration Statement, at least one copy of
the prospectus included in such Registration Statement and all amendments and
supplements thereto and (iii) such other documents, including copies of any
prospectus (preliminary, final, summary or free writing), as such Investor may
reasonably request from time to time in order to facilitate the disposition of
the Registrable Securities owned by such Investor.
e. The Company shall use its best efforts to (i) register and
qualify, unless an exemption from registration and qualification applies, the
resale by the Investors of the Registrable Securities covered by a Registration
Statement under the securities or "blue sky" laws of all the states of the
United States, (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(e) or (y) subject itself to general taxation in any such jurisdiction.
The Company shall promptly notify Legal Counsel and each 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.
f. The Company shall notify Legal Counsel and each Investor in
writing of the happening of any event, as promptly as practicable after becoming
aware of such event, as a result of which the prospectus included in a
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 (provided that in no event shall such
notice contain any material, nonpublic information), and promptly prepare and
file with the SEC a supplement or amendment to such Registration Statement to
correct such untrue statement or omission, and deliver at least one (1) copy of
such supplement or amendment to Legal Counsel and each Investor. The Company
shall also promptly notify Legal Counsel and each 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 Legal
Counsel and each Investor by facsimile on the same day of such effectiveness and
by overnight mail), (ii) of any request by the SEC for
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amendments or supplements to a 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. In
the event that the Company shall file a post-effective amendment that amends or
modifies a prospectus or prospectus supplement in any way, the Company shall
file a prospectus supplement, which prospectus supplement shall be filed
pursuant to Rule 424, containing such amended or modified prospectus or
prospectus supplement within one (1) Business Day of the date on which such
post-effective amendment has become effective.
g. The Company shall use its best efforts to prevent the issuance
of any stop order or other suspension of effectiveness of a Registration
Statement, or the suspension of the qualification of any of the 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 Legal Counsel and each Investor who holds
Registrable Securities being sold 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.
h. At the reasonable request (in the context of the securities
laws) of any Investor, the Company shall furnish to such Investor, on the date
of the effectiveness of the Registration Statement and thereafter from time to
time on such dates as an Investor may reasonably request (i) a letter, dated
such date, from the Company's independent certified public accountants in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
Investors, and (ii) an opinion, dated as of such date, of counsel representing
the Company for purposes of such Registration Statement, in form, scope and
substance as is customarily given in an underwritten public offering, addressed
to the Investors.
i. At the reasonable request (in the context of the securities
laws) of any Investor, the Company shall make available for inspection during
regular business hours by (i) any Investor, (ii) Legal Counsel and (iii) one (1)
firm of accountants or other agents retained by the Investors (collectively, the
"INSPECTORS"), all pertinent financial and other records, and pertinent
corporate documents and properties of the Company (collectively, the "RECORDS"),
as shall be reasonably deemed necessary by each Inspector, and cause the
Company's officers, directors and employees to supply all information which any
Inspector may reasonably request; provided, however, that each Inspector shall
agree to hold in strict confidence and shall not make any disclosure (except to
an Investor) or use of any Record or other information which the Company
determines in good faith to be confidential, and of which determination the
Inspectors are so notified, unless (a) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the 1933 Act, (b) the release of such
Records is ordered pursuant to a final, non-appealable subpoena or order from a
court or government body of competent jurisdiction, or (c) the information in
such Records has been made generally available to the public other than by
disclosure in violation of this or any other agreement of which the Inspector
has knowledge. Each Investor agrees that it shall, upon learning that disclosure
of such Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. Each Inspector which exercises
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its rights under this Section 3(i) shall be obligated to execute a
non-disclosure agreement containing such reasonable terms as the Company may
request. The fees and expenses of the Inspectors shall be borne by the
applicable Investor.
j. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) 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 Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor and allow such Investor, at the Investor's
expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, such information.
k. The Company shall use its best efforts to (i) cause all the
Registrable Securities covered by a Registration Statement to be listed on each
securities exchange or trading market on which securities of the same class or
series issued by the Company are listed, and (ii) without limiting the
generality of the foregoing, arrange for at least two market makers to register
with the National Association of Securities Dealers, Inc. ("NASD") as such with
respect to such Registrable Securities. The Company shall pay all fees and
expenses in connection with satisfying its obligation under this Section 3(k).
l. The Company shall cooperate with the Investors who hold
Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive
legend) representing the Registrable Securities to be offered pursuant to a
Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the Investors may reasonably request and
registered in such names as the Investors may request.
m. The Company shall provide a transfer agent and registrar
of all such Registrable Securities not later than the effective date of the
applicable Registration Statement.
n. If requested by an Investor, the Company shall (i) as soon as
practicable incorporate in a prospectus supplement or post-effective amendment
such information as an Investor requests to be included therein relating to such
Investor and the sale and distribution of Registrable Securities thereby,
including information with respect to the number of Registrable Securities being
offered or sold, the purchase price being paid therefor and any other terms of
the offering of the Registrable Securities to be sold in such offering; (ii) as
soon as practicable make all required filings of such prospectus supplement or
post-effective amendment after being notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment; and (iii) as soon as
practicable, supplement or make amendments to any Registration Statement if
reasonably requested by an Investor of such Registrable Securities.
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o. The Company shall use its best efforts to cause the Registrable
Securities covered by the applicable Registration Statement to be registered
with or approved by such other governmental agencies or authorities in the
United States as may be necessary to consummate the disposition of such
Registrable Securities.
p. The Company shall make generally available to its security
holders as soon as practical, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the 0000 Xxx) covering a twelve (12)-month
period beginning not later than the first day of the Company's fiscal quarter
next following the effective date of a Registration Statement.
q. The Company shall otherwise use its best efforts to comply
with all applicable rules and regulations of the SEC in connection with any
registration hereunder.
r. Within two (2) Business Days after a Registration Statement
which covers applicable 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 Investors whose Registrable Securities are included in such Registration
Statement) confirmation that such Registration Statement has been declared
effective by the SEC in substantially the form attached hereto as EXHIBIT B,
provided that if the Company changes its transfer agent, it shall immediately
deliver any previously delivered notices under this Section 3(r) and any
subsequent notices to such new transfer agent.
s. The Company shall make such filings with the NASD (including
providing all required information and paying required fees thereto) as and when
reasonably requested by any Investors and make all other filings and take all
other actions reasonably necessary to expedite and facilitate disposition by the
Investors of Registrable Securities pursuant to a Registration Statement,
including responding to any comments received from the NASD within five (5)
Trading Days.
t. Notwithstanding anything to the contrary in Section 3(f), at
any time after the applicable Registration Statement has been declared effective
by the SEC, the Company may delay the disclosure of material non-public
information concerning the Company the disclosure of which at the time is not,
in the good faith opinion of the Board of Directors of the Company and its
counsel, in the best interest of the Company and, in the opinion of counsel to
the Company, otherwise required (a "GRACE PERIOD"); provided, that the Company
shall promptly (i) notify the Investors in writing of the existence of material
non-public information giving rise to a Grace Period (provided that in each
notice the Company shall not disclose the content of such material non-public
information to the Investors) and the date on which the Grace Period will begin,
and (ii) notify the Investors in writing of the date on which the Grace Period
ends; and, provided further, that (A) no Grace Period shall exceed fifteen (15)
consecutive days, (B) during any 365 day period such Grace Periods shall not
exceed an aggregate of thirty (30) days and (C) the first day of any Grace
Period must be at least two (2) Trading Days after the last day of any prior
Grace Period (a Grace Period that satisfies all of the requirements of this
Section 3(t) being referred to as an "ALLOWABLE GRACE PERIOD"). For purposes of
determining the length of a Grace Period above, the Grace Period shall begin on
and include the date the holders receive the notice referred to in clause (i)
and shall end on and include the later of the date the holders
10
receive the notice referred to in clause (ii) and the date referred to in such
notice. The provisions of Section 3(f) hereof shall not be applicable during the
period of any Allowable Grace Period. Upon expiration of the Grace Period, the
Company shall again be bound by the provisions of Section 3(f) with respect to
the information giving rise thereto unless such material non-public information
is no longer applicable.
u. Any legend endorsed on a certificate evidencing a Registrable
Security held by an Investor and any stop transfer instructions or notations on
the Company's records with respect to such Registrable Security shall be removed
or lifted and the Company shall issue a certificate without such legend to such
Investor (i) if the transfer or such Registrable Security has been registered
under the Act, (ii) if such Registrable Security may be sold under Rule 144(k)
of the 1933 Act or (iii) if such holder provides the Company with an opinion or
counsel (which counsel and opinion are reasonably satisfactory to the Company)
stating that a public sale or transfer of such Registrable Security may be made
without registration under the 1933 Act.
4. OBLIGATIONS OF THE INVESTORS.
a. At least seven (7) Business Days prior to the first anticipated
filing date of a Registration Statement and at lease five (5) Business Days
prior to the filing of any amendment or supplement to a Registration Statement,
the Company shall notify each Investor in writing of the information, if any,
the Company requires from each such Investor if such Investor elects to have any
of such Investor's Registrable Securities included in such Registration
Statement or, with respect to an amendment or a supplement, if such Investor's
Registrable Securities are included in such Registration Statement (each an
"INFORMATION REQUEST"). Provided that the Company shall have complied with its
obligations set forth in the preceding sentence, it shall be a condition
precedent to the obligations of the Company to complete the registration
pursuant to this Agreement with respect to the Registrable Securities of a
particular Investor that such Investor shall furnish to the Company, in response
to an Information Request, 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. Each Investor, by such 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 any Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from such Registration Statement.
c. Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(g) or
the first sentence of Section 3(f) or written notice from the Company of an
Allowable Grace Period, such Investor will immediately discontinue disposition
of Registrable Securities pursuant to any Registration Statement(s) covering
such Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(g) or the first
sentence of Section 3(f) or receipt of notice that no supplement or amendment is
required or that the Allowable Grace Period has ended. Notwithstanding anything
to the contrary, the Company
11
shall cause its transfer agent to deliver unlegended shares of Common Stock to a
transferee of an Investor 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(g) or the first sentence of Section
3(f) and for which the Investor has not yet settled.
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 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. The
Company shall also reimburse the Investors for the reasonable fees and
disbursements of Legal Counsel in connection with registration, filing or
qualification pursuant to Sections 2 and 3 of this Agreement.
6. INDEMNIFICATION.
In the event any Registrable Securities are included in a
Registration Statement under this Agreement:
a. To the fullest extent permitted by law, the Company will, and
hereby does, indemnify, hold harmless and defend each Investor, the directors,
officers, partners, members, managers, employees, agents, and representatives
thereof, and each Person, if any, who controls any Investor within the meaning
of the 1933 Act or the 1934 Act (each, an "INDEMNIFIED PERSON"), against any
losses, claims, damages, liabilities, judgments, fines, penalties, charges,
costs, reasonable 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 a 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 any
preliminary, final, summary or free writing 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 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 or (iv) any material violation
of this Agreement by the Company (the matters in the
12
foregoing clauses (i) through (iv) being, collectively, "VIOLATIONS"). Subject
to Section 6(c), the Company shall reimburse the Indemnified Persons, 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) shall not
apply to (i) 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 for such
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(d), and (ii) 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
Investors pursuant to Section 9.
b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to severally but 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, and each Person, if any,
who controls the Company within the meaning of the 1933 Act or the 1934 Act
(each 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
furnished to the Company by such Investor expressly for use in connection with
such Registration Statement; and, subject to Section 6(c), such Investor will
reimburse any legal or other expenses reasonably incurred by an Indemnified
Party 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 such Investor, which consent shall not be
unreasonably withheld; provided, further, however, that the aggregate liability
of the Investor in connection with any Violation shall not exceed the net
proceeds to such Investor as a result of the sale of Registrable Securities
pursuant to the Registration Statement giving rise to such Claim. 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.
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
13
Indemnified Person or the Indemnified Party, as the case may be. In any such
proceeding, any Indemnified Person or Indemnified Party may retain its own
counsel, but, except as provided in the following sentence, the fees and
expenses of that counsel will be at the expense of that Indemnified Person or
Indemnified Party, as the case may be, unless (i) the indemnifying party and the
Indemnified Person or Indemnified Party, as applicable, shall have mutually
agreed to the retention of that counsel, (ii) the indemnifying party does not
assume the defense of such proceeding in a timely manner or (iii) in the
reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel for 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 Company shall
pay reasonable fees for up to one (1) separate legal counsel for the Investors,
and such legal counsel shall be selected by the Investors holding at least
two-thirds (2/3) of the then-outstanding Registrable Securities included in the
Registration Statement to which the Claim relates. 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 prior written consent, provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise with respect to any pending or
threatened action or claim in respect of which indemnification or contribution
may be or has been sought hereunder (whether or not the Indemnified Party or
Indemnified Person is an actual or potential party to such action or claim)
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.
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.
14
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 Person involved in the sale of Registrable Securities which Person is
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 0000 Xxx) in connection with such sale, shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (ii) contribution by any seller of
Registrable Securities shall be limited to an amount equal to the net amount of
proceeds received by such seller from the sale of such Registrable Securities
pursuant to the Registration Statement giving rise to such action or claim for
indemnification less the amount of any damages that such seller has otherwise
been required to pay in connection with such sale.
8. REPORTS UNDER THE 1934 ACT.
With a view to making available to the Investors 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 Investors to sell securities of the
Company to the public without registration ("RULE 144"), the Company agrees 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 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 each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144 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 investors to
sell such securities pursuant to Rule 144 without registration.
9. ASSIGNMENT OF REGISTRATION RIGHTS.
The rights under this Agreement shall be automatically assignable
by the Investors to any transferee of all or any portion of Registrable
Securities if: (i) the Investor 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 transfer or 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) immediately following such transfer or
assignment the further disposition of such securities
15
by the transferee or assignee is restricted under the 1933 Act and applicable
state securities laws; and (iv) at or before the time the Company receives the
written notice contemplated by clause (ii) of this sentence, the transferee or
assignee agrees in writing with the Company to be bound by all of the provisions
contained herein.
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 Investors who then hold at least two-thirds (2/3) of the then-outstanding
Registrable Securities. Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon each Investor and the Company. No such
amendment shall be effective to the extent that it applies to less than all of
the holders of the Registrable Securities. No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any
provision of any of this Agreement unless the same consideration also is offered
to all of the parties to this Agreement.
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) Business 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:
If to the Company:
Galaxy Energy Corporation
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
With copy to:
Xxxx Xxxx Xxxx Xxxxxxxxxx & Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxx X. Xxxxxxxxx
16
Facsimile: (000) 000-0000
If to Legal Counsel:
Xxxxxx Xxxxxx Rosenman LLP
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Telephone: 000-000-0000
Attention: Xxxx X. Xxxx, Esq.
Facsimile: 312-902-1061
If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with copies to such Buyer's representatives as set forth
on the Schedule of Buyers, or, in the case of a Buyer or other party named
above, to 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 at least five (5) 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 courier or overnight courier service shall be
rebuttable evidence of personal service, receipt by facsimile or deposit with a
nationally recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively. Notwithstanding the foregoing, the Company or
its counsel may transmit versions of any Registration Statement (or any
amendments or supplements thereto) to Legal Counsel in satisfaction of its
obligations under Section 3(c) to permit Legal Counsel to review such
Registration Statement prior to filing (and solely for such purpose) by email to
xxxx.xxxx@xxxxxxxxx.xxx, provided that delivery and receipt of such transmission
shall be confirmed by electronic, telephonic or other means.
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. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting
the City of New York, borough of Manhattan, 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
17
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 constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein and therein. This Agreement supersedes 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 two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to each other party; provided that a facsimile signature shall be
considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile
signature.
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.
j. All consents and other determinations to be made by the
Investors pursuant to this Agreement shall be made, unless otherwise specified
in this Agreement, by Investors holding at least two-thirds (2/3) of the
then-outstanding Registrable Securities. Any consent or other determination
approved by Investors as provided in the immediately preceding sentence shall be
binding on all Investors.
k. 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.
18
l. Each Buyer and each holder of Registrable Securities shall
have all rights and remedies that such Buyers and holders have been granted at
any time under any other agreement or contract and all of the rights that such
Buyers and holders have under any law. Any Person having any rights under any
provision of this Agreement shall be entitled to enforce such rights
specifically (without posting a bond or other security or proving actual
damages), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law.
m. This Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and assigns and, to the extent
provided in Sections 6(a) and 6(b) hereof, each Investor, the directors,
officers, partners, members, managers, employees, agents, representatives of,
and each Person, if any, who controls any Investor within the meaning of the
1933 Act and the 1934 Act and each of the Company's directors, each of the
Company's officers who signs the Registration Statement, and each Person, if
any, who controls the Company within the meaning of the 1933 Act and the 1934
Act, and is not for the benefit of, nor may any provision hereof be enforced by,
any other Person.
n. Unless the context otherwise requires, (i) all references to
Sections, Schedules or Exhibits are to Sections, Schedules or Exhibits contained
in or attached to this Agreement, (ii) each accounting term not otherwise
defined in this Agreement has the meaning assigned to it in accordance with
United States Generally Accepted Accounting Principles, (iii) words in the
singular or plural include the singular and plural and pronouns stated in either
the masculine, the feminine or neuter gender shall include the masculine,
feminine and neuter and (iv) the use of the word "including" in this Agreement
shall be by way of example rather than limitation.
* * * * * *
19
IN WITNESS WHEREOF, the parties have caused this Registration Rights
Agreement to be duly executed as of day and year first above written.
COMPANY: BUYERS:
GALAXY ENERGY CORPORATION HFTP INVESTMENT L.L.C.
By: Promethean Asset Management L.L.C.
Its: Investment Manager
By: /s/ XXXXXXXXXXX X. XXXXXXXX
------------------------------ By: /s/ XXXXXX X. XXXXXXXX
Name: XXXXXXXXXXX X. XXXXXXXX ------------------------------------
------------------------------ Name: Xxxxxx X. Xxxxxxxx
Title: SVP & CFO Title: Partner and Authorized Signatory
------------------------------
GAIA OFFSHORE MASTER FUND, LTD.
By: Promethean Asset Management L.L.C.
Its: Investment Manager
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Partner and Authorized Signatory
CAERUS FUND LTD.
By: Promethean Asset Management L.L.C.
Its: Investment Manager
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Partner and Authorized Signatory
PROMETHEAN II MASTER, L.P.
By: Promethean Asset Management L.L.C.
Its: Investment Manager
By: /s/ XXXXXX X. XXXXXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Partner and Authorized Signatory
AG OFFSHORE CONVERTIBLES, LTD.
By: Xxxxxx, Xxxxxx & Co., L.P.
Its: Investment Manager
By: /s/ XXXXXX X. XXXXXXXXXXX
-------------------------------------
Name: XXXXXX X. WESKELBLATT
-----------------------------------
Title: AUTHORIZED SIGNATORY
-----------------------------------
XXXXXXXX, L.P.
By: Xxxxxxxx Capital Management, Inc.
Its: General Partner
By: Xxxxxx, Xxxxxx & Co., L.P.
Its: Director
By: /s/ XXXXXX X. XXXXXXXXXXX
-------------------------------------
Name: XXXXXX X. WESKELBLATT
-----------------------------------
Title: AUTHORIZED SIGNATORY
-----------------------------------
SCHEDULE OF BUYERS
INVESTOR ADDRESS INVESTOR'S LEGAL REPRESENTATIVE'S
INVESTOR'S NAME AND FACSIMILE NUMBER ADDRESS AND FACSIMILE NUMBER
HFTP Investment L.L.C. c/o Promethean Asset Management L.L.C. Xxxxxx Xxxxxx Xxxxxxxx LLP
00 Xxxxx Xxxxxx 000 X. Xxxxxx Xxxxxx
00xx Xxxxx Xxxxxxx, Xxxxxxxx 00000-0000
Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxx X. Xxxx, Esq.
Attention: Xxxxxx X. Xxxxxxxx Telephone: (000) 000-0000
Telephone: (000) 000-0000 Facsimile: (000) 000-0000
Facsimile: (000) 000-0000
Gaia Offshore Master Fund, Ltd. c/o Promethean Asset Management L.L.C. Xxxxxx Xxxxxx Xxxxxxxx LLP
00 Xxxxx Xxxxxx 000 X. Xxxxxx Xxxxxx
00xx Xxxxx Xxxxxxx, Xxxxxxxx 00000-0000
Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxx X. Xxxx, Esq.
Attention: Xxxxxx X. Xxxxxxxx Telephone: (000) 000-0000
Telephone: (000) 000-0000 Facsimile: (000) 000-0000
Facsimile: (000) 000-0000
Caerus Fund Ltd. c/o Promethean Asset Management L.L.C. Xxxxxx Xxxxxx Xxxxxxxx LLP
00 Xxxxx Xxxxxx 000 X. Xxxxxx Xxxxxx
00xx Xxxxx Xxxxxxx, Xxxxxxxx 00000-0000
Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxx X. Xxxx, Esq.
Attention: Xxxxxx X. Xxxxxxxx Telephone: (000) 000-0000
Telephone: (000) 000-0000 Facsimile: (000) 000-0000
Facsimile: (000) 000-0000
Promethean II Master, L.P. c/o Promethean Asset Management L.L.C. Xxxxxx Xxxxxx Xxxxxxxx LLP
00 Xxxxx Xxxxxx 000 X. Xxxxxx Xxxxxx
00xx Xxxxx Xxxxxxx, Xxxxxxxx 00000-0000
Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxx X. Xxxx, Esq.
Attention: Xxxxxx X. Xxxxxxxx Telephone: (000) 000-0000
Telephone: (000) 000-0000 Facsimile: (000) 000-0000
Facsimile: (000) 000-0000
AG Offshore Convertibles, Ltd. x/x Xxxxxx, Xxxxxx & Xx. Xxxx, Xxxxx, Xxxxxxx, Xxxxxxx & Xxxxxxxx
000 Xxxx Xxxxxx XXX
Xxx Xxxx, Xxx Xxxx 00000 1285 Avenue of the Americas
Attention: Xxxx X. Xxxx Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000 Attention: Xxxxxxx X. Xxxx
Facsimile: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxxxx, L.P. x/x Xxxxxx, Xxxxxx & Xx. Xxxx, Xxxxx, Xxxxxxx, Xxxxxxx & Xxxxxxxx
000 Xxxx Xxxxxx XXX
Xxx Xxxx, Xxx Xxxx 00000 1285 Avenue of the Americas
Attention: Xxxx X. Xxxx Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000 Attention: Xxxxxxx X. Xxxx
Facsimile: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000
EXHIBIT B
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
[TRANSFER AGENT]
ATTN:
RE: GALAXY ENERGY CORPORATION
Ladies and Gentlemen:
We are counsel to Galaxy Energy Corporation, a Colorado corporation
(the "COMPANY"), and have represented the Company in connection with that
certain issuance and sale to certain senior secured creditors (the "HOLDERS") of
the Company, shares of the Company's common stock, $0.001 par value per share
(the "COMMON STOCK"), pursuant to that certain November 2006 Waiver and
Amendment Agreement, dated as of November 29, 2006 (the "NOVEMBER 2006 WAIVER
AND AMENDMENT"). Pursuant to the November 2006 Waiver and Amendment, the Company
also has entered into a Registration Rights Agreement with the Holders, dated as
of November 29, 2006 (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which
the Company agreed, among other things, to register the Registrable Securities
(as defined in the Registration Rights Agreement), including the shares of
Common Stock issued pursuant to the November 2006 Waiver and Amendment, under
the Securities Act of 1933, as amended (the "1933 ACT"). In connection with the
Company's obligations under the Registration Rights Agreement, on ____________
___, 200_, 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 stockholder 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,
[ISSUER'S COUNSEL]
By:
-------------------------------------
cc: [LIST NAMES OF HOLDERS]
