REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is
made and entered into as of October 17, 2005 by and between Apollo Gold
Corporation, a Yukon Territory corporation (the “Company”),
as
evidenced by the signatures of the Company and Jipangu Inc., a Japanese
corporation (the “Subscriber”)
pursuant to the Subscription Agreement dated as of October 17, 2005 (the
“Subscription
Agreement”)
for up
to 11,650,000 Common Shares (the “Shares”)
of the
Company and up to 2,000,000 common share purchase warrants (the “Warrants”)
of the
Company, each Warrant entitling the holder to acquire one common share
(“Warrant
Share”)
of the
Company as set forth in the Subscription Agreement. In order to induce the
Subscriber under the Subscription Agreement to enter into the Subscription
Agreement, the Company has agreed to provide the registration rights set forth
in this Agreement.
The
Company agrees with the Subscriber, (i) for its benefit as Subscriber
and
(ii) for the benefit of the beneficial owners (including the Subscriber)
from time to time of the Shares, the Warrants and the Warrant Shares, and (iii)
for the benefit of the beneficial owners from time to time of the Registrable
Securities (as defined herein) issuable pursuant to the Subscription Agreement
(each of the foregoing a “Holder”
and
together the “Holders”),
as
follows:
SECTION
1. Definitions.
Capitalized terms used herein without definition shall have their respective
meanings set forth in the Subscription Agreement. In addition to the terms
that
are defined elsewhere in this Agreement, the following terms shall have the
following meanings:
“Additional
Amount”
means
any security issued with respect thereto upon any stock dividend, split, merger
or similar event, for each Registrable Security owned by the
Holder.
“Affiliate”,
with
respect to any specified person, has the meaning specified in Rule
144.
“Common
Shares”
means
the Company’s common shares, no par value.
“Company”
has the
meaning specified in the first paragraph of this Agreement.
“Deferral
Notice”
has the
meaning specified in Section 3(d) hereof.
“Deferral
Period”
has the
meaning specified in Section 3(d) hereof.
“Effectiveness
Deadline Date”
has the
meaning specified in Section 2(a) hereof.
“Effectiveness
Period”
means
the period commencing on the Issue Date and ending on the date that all
Registrable Securities have ceased to be Registrable Securities.
1
“Exchange
Act”
means
the United States Securities Exchange Act of 1934, as amended, and the rules
and
regulations of the SEC promulgated thereunder.
“Filing
Deadline Date”
has the
meaning specified in Section 2(a) hereof.
“Holder”
has the
meaning specified in the second paragraph of this Agreement.
“Initial
Resale Registration Statement”
has the
meaning specified in Section 2(a) hereof.
“Issue
Date”
means
the Closing Date, as that term is defined in the Subscription
Agreement.
Material
Event”
has the
meaning specified in Section 3(d) hereof.
“Notice
and Questionnaire”
means a
written notice delivered to the Company containing substantially the information
called for by the Selling Securityholder Notice and Questionnaire attached
as
Annex
A
to this
Agreement.
“Notice
Holder”
means
on any date, any Holder that has delivered a Notice and Questionnaire to the
Company on or prior to such date.
“Prospectus”
means
the prospectus included in any Registration Statement (including, without
limitation, a prospectus that discloses information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 415 promulgated under the Securities Act), as amended or supplemented
by
any amendment or prospectus supplement, including post-effective amendments,
and
all materials incorporated by reference or explicitly deemed to be incorporated
by reference in such Prospectus.
“Registrable
Securities”
means
the Shares, the Warrant Shares that have been issued or are issuable upon
exercise of the Warrants, and any security issued with respect thereto upon
any
stock dividend, split, merger or similar event until, in the case of any such
security, the earlier of (i) the date on which all of the Registrable Securities
have been sold pursuant to Rule 144 under the Securities Act or a shelf
registration statement and no additional Warrant Shares are issuable upon
exercise of the Warrants, or (ii) the date on which each Holder is entitled
to
sell all of its Registrable Securities pursuant to Rule 144(k) and no additional
Warrant Shares are issuable upon exercise of the Warrants.
“Registration
Statement”
means
any registration statement of the Company that covers any of the Registrable
Securities pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such registration statement, including
post-effective amendments, all exhibits, and all materials incorporated by
reference or explicitly deemed to be incorporated by reference in such
registration statement.
“Resale
Registration Statement”
has the
meaning specified in Section 2(a) hereof.
2
“Rule
144”
means
Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or any similar or successor rule or regulation hereafter adopted by the
SEC having substantially the same effect as such Rule.
“SEC”
means
the United States Securities and Exchange Commission and any successor
agency.
“Securities
Act”
means
the United States Securities Act of 1933, as amended, and the rules and
regulations promulgated by the SEC thereunder.
“Shares”
has the
meaning specified in the first paragraph of this Agreement.
“Subscriber”
means
the Subscriber to the Subscription Agreement.
“Subsequent
Resale Registration Statement”
has the
meaning specified in Section 2(b) hereof.
“Warrant
Shares”
has the
meaning specified in the first paragraph of this Agreeement.
“Warrants”
has the
meaning specified in the first paragraph of this Agreement.
SECTION
2. Resale
Registration.
(a) The
Company shall prepare and file or cause to be prepared and filed with the SEC
no
later than December 31, 2005 (the “Filing
Deadline Date”)
a
Registration Statement (the “Initial
Resale Registration Statement”)
registering the resale from time to time by Holders of all of the Registrable
Securities (a “Resale
Registration Statement”).
The
Initial Resale Registration Statement shall be on Form S-3 or another
appropriate form permitting registration of such Registrable Securities for
resale by such Holders in accordance with the methods of distribution set forth
in the Initial Resale Registration Statement. The Company shall use its
commercially reasonable efforts to cause the Initial Resale Registration
Statement to be declared effective under the Securities Act no later than the
date (the “Effectiveness
Deadline Date”)
that
is ninety (90) days (or, in the case of a full review by the SEC, one hundred
and twenty (120) days) after the Issue Date, and to keep, subject to Section
3(d)(A) hereof, the Initial Resale Registration Statement (or any Subsequent
Resale Registration Statement) continuously effective under the Securities
Act
until the expiration of the Effectiveness Period. Each Holder that became a
Notice Holder on or prior to the date ten (10) Business Days prior to the time
that the Initial Resale Registration Statement became effective shall be named
as a selling security holder in the Initial Resale Registration Statement and
the related Prospectus in such a manner as to permit such Holder to deliver
such
Prospectus to purchasers of Registrable Securities in accordance with applicable
law (other than laws not generally applicable to all such Holders).
Notwithstanding the foregoing, no Holder shall be entitled to have the
Registrable Securities held by it covered by such Resale Registration Statement
unless such Holder has provided a Notice and Questionnaire in accordance with
and in compliance with Section 4. The Company may permit any of its
security holders to include any of the Company’s securities in the Initial
Resale Registration Statement or any Subsequent Resale Registration
Statement.
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(b) If
the
Initial Resale Registration Statement or any Subsequent Resale Registration
Statement ceases to be effective for any reason at any time during the
Effectiveness Period, the Company shall use its commercially reasonable efforts
to obtain the prompt withdrawal of any order suspending the effectiveness
thereof, and in any event shall within thirty (30) days of such cessation of
effectiveness amend the Resale Registration Statement in a manner reasonably
expected by the Company to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Resale Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a “Subsequent
Resale Registration Statement”).
If a
Subsequent Resale Registration Statement is filed, the Company shall use
commercially reasonable efforts to cause the Subsequent Resale Registration
Statement to become effective as promptly as is reasonably practicable after
such filing or, if filed during a Deferral Period, after the expiration of
such
Deferral Period, and to keep such Registration Statement (or Subsequent Resale
Registration Statement), subject to Section 3(d)(A) hereof, continuously
effective until the end of the Effectiveness Period.
(c) The
Company shall supplement and amend the Initial or any Subsequent Resale
Registration Statement if required by the rules, regulations or instructions
applicable to the registration form used by the Company for such Resale
Registration Statement, if required by the Securities Act.
(d)
Each
Holder of Registrable Securities agrees that if such Holder wishes to sell
Registrable Securities pursuant to a Resale Registration Statement and related
Prospectus, it will do so only in accordance with this Section 2(d),
Section 3(d) and Section 4. Each Holder of Registrable Securities
wishing to sell Registrable Securities pursuant to the Initial or any Subsequent
Resale Registration Statement and related Prospectus agrees to deliver a Notice
and Questionnaire to the Company at least five (5) business days prior to any
intended distribution of Registrable Securities under the Resale Registration
Statement. From and after the date the Initial Resale Registration Statement
is
declared effective, the Company shall, as promptly as is reasonably practicable
after the date a fully completed and legible Notice and Questionnaire is
received by the Company, (i) if required by applicable law, file with
the
SEC a post-effective amendment to the Resale Registration Statement or prepare
and, if required by applicable law, file a supplement to the related Prospectus
or a supplement or amendment to any document incorporated therein by reference
or file any other document required by the SEC so that the Holder delivering
such Notice and Questionnaire is named as a selling security holder in the
Resale Registration Statement and the related Prospectus in such a manner as
to
permit such Holder to deliver such Prospectus to purchasers of the Registrable
Securities in accordance with applicable law (other than laws not generally
applicable to all Holders of Registrable Securities wishing to sell Registrable
Securities pursuant to the Resale Registration Statement and related Prospectus)
and using the manner of sale specified in the Notice and Questionnaire, and,
if
the Company shall file a post-effective amendment to the Resale Registration
Statement, use commercially reasonable efforts to cause such post-effective
amendment to be declared effective under the Securities Act as promptly as
is
reasonably practicable; (ii) provide such Holder copies of any documents
filed pursuant to Section 2(d)(i); and (iii) notify such Holder
as
promptly as is reasonably practicable after the effectiveness under the
Securities Act of any post-effective amendment filed pursuant to
Section 2(d)(i); provided,
that if
such Notice and Questionnaire is delivered during a Deferral Period, the Company
shall so inform the Holder delivering such Notice and Questionnaire and shall
take the actions set forth in clauses (i), (ii) and (iii) above
upon
expiration of the Deferral Period in accordance with Section 3(d),
provided,
further,
that if
under applicable law the Company has more than one option as to the type or
manner of making any such filing, the Company will make the required filing
or
filings in the manner or of a type that is reasonably expected to result in
the
earliest availability of the Prospectus for effecting resales of Registrable
Securities. Notwithstanding anything contained herein to the contrary, the
Company shall be under no obligation to name any Holder that is not a Notice
Holder as a selling security holder in any Registration Statement or related
Prospectus; provided,
however,
that
any Holder that becomes a Notice Holder pursuant to the provisions of this
Section 2(d) of this Agreement (whether or not such Holder was a Notice
Holder at the time the Registration Statement was initially declared effective)
shall be named as a selling security holder in the Registration Statement or
related Prospectus subject to and in accordance with the requirements of this
Section 2(d).
4
SECTION
3. Registration
Procedures.
In
connection with the registration obligations of the Company under Section 2
hereof, the Company shall:
(a) Prepare
and file with the SEC such amendments and post-effective amendments to each
Registration Statement as may be necessary to keep such Registration Statement
continuously effective for the applicable period specified in Section 2(a);
cause the related Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the Securities Act; and use commercially
reasonable efforts to comply with the provisions of the Securities Act
applicable to it with respect to the disposition of all securities covered
by
such Registration Statement during the Effectiveness Period in accordance with
the intended methods of disposition by the sellers thereof set forth in such
Registration Statement as so amended or such Prospectus as so
supplemented.
(b) 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 a particular 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 48 hours after the submission of
such request.
(c) Use
commercially reasonable efforts to obtain the withdrawal of any order suspending
the effectiveness of a Registration Statement or the lifting of any suspension
of the qualification (or exemption from qualification) of any of the Registrable
Securities for sale in any jurisdiction in which they have been qualified for
sale, in either case at the earliest possible moment or, if any such order
or
suspension is made effective during any Deferral Period, at the earliest
possible moment after the expiration of such Deferral Period.
5
(d) Upon
(A) the issuance by the SEC of a stop order suspending the effectiveness
of
the Resale Registration Statement or the initiation of proceedings with respect
to the Resale Registration Statement under Section 8(d) or 8(e) of the
Securities Act, (B) the occurrence of any event or the existence of
any
fact (a “Material
Event”)
as a
result of which any Registration Statement shall contain any untrue statement
of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, or any Prospectus
shall contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (including, in any
such
case, as a result of the non-availability of financial statements), or
(C) the occurrence or existence of any development, event, fact, situation
or circumstance relating to the Company that, in the discretion of the Company,
makes it appropriate to suspend the availability of the Resale Registration
Statement and the related Prospectus, (i) in the case of clause (B)
above, subject to the next sentence, as promptly as practicable prepare and
file
a post-effective amendment to such Registration Statement or a supplement to
the
related Prospectus or any document incorporated therein by reference or file
any
other required document that would be incorporated by reference into such
Registration Statement and Prospectus so that such Registration Statement does
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and such Prospectus does not contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in the light of the circumstances under which
they
were made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a
post-effective amendment to a Registration Statement, subject to the next
sentence, use commercially reasonable efforts to cause it to be declared
effective as promptly as is reasonably practicable, and (ii) give notice
(via facsimile, telephone or electronic mail followed by a written notice by
first-class mail) to the Notice Holders that the availability of the Resale
Registration Statement is suspended (a “Deferral
Notice”)
and,
upon receipt of any Deferral Notice, each Notice Holder agrees not to sell
any
Registrable Securities pursuant to the Registration Statement until such Notice
Holder’s receipt of copies of the supplemented or amended Prospectus provided
for in clause (i) above, or until it is advised in writing by the Company
that the Prospectus may be used, and has received copies of any additional
or
supplemental filings that are incorporated or deemed incorporated by reference
in such Prospectus. The Company will use commercially reasonable efforts to
ensure that the use of the Prospectus may be resumed (x) in the case
of
clause (A) above, as promptly as is practicable, (y) in the case
of
clause (B) above, as soon as, in the sole reasonable judgment of the
Company, public disclosure of such Material Event would not be prejudicial
to or
contrary to the interests of the Company or, if necessary to avoid unreasonable
burden or expense, as soon as reasonably practicable thereafter and (z) in
the case of clause (C) above, as soon as, in the reasonable discretion
of
the Company, such suspension is no longer appropriate. The period during which
the availability of the Registration Statement and any Prospectus is suspended
(the “Deferral
Period”)
is not
to exceed (i) 20 consecutive days at any one time; (ii) 30 days in the aggregate
in any three-month period; or (iii) 60 days in the aggregate during any 12-month
period, or as otherwise required by applicable regulatory authority; provided
that, the number of days the Company is required to keep the Registration
Statement effective shall be extended by the number of days equal to the
aggregate Deferral Period(s). The first day of any Deferral Period must be
at
least two (2) trading days after the last day of any prior Deferral
Period.
6
(e) During
the Effectiveness Period (except during such periods that a Deferral Notice
is
outstanding and has not been revoked), deliver to each Notice Holder in
connection with any sale of Registrable Securities pursuant to a Registration
Statement, without charge, as many copies of the Prospectus or Prospectuses
relating to such Registrable Securities and any amendment or supplement thereto
as such Notice Holder may reasonably request; and the Company hereby consents
(except during such periods that a Deferral Notice is outstanding and has not
been revoked) to the use of such Prospectus or each amendment or supplement
thereto by each Notice Holder in connection with any offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or supplement
thereto in the manner set forth therein.
(f)
Subject to Section 3(d), use commercially reasonable efforts to register
or
qualify or cooperate with the Notice Holders in connection with the registration
or qualification (or exemption from such registration or qualification) of
such
Registrable Securities for offer and sale under the securities or Blue Sky
laws
of such jurisdictions within the United States as any Notice Holder reasonably
requests in writing (which request may be included in the Notice and
Questionnaire), it being agreed that no such registration or qualification
will
be made unless so requested; use commercially reasonable efforts to keep each
such registration or qualification (or exemption therefrom) effective during
the
Effectiveness Period in connection with such Notice Holder’s offer and sale of
Registrable Securities pursuant to such registration or qualification (or
exemption therefrom) and do any and all other acts or things necessary to enable
the disposition in such jurisdictions of such Registrable Securities in the
manner set forth in the relevant Registration Statement and the related
Prospectus; provided,
that
the Company will not be required to (i) qualify as a foreign corporation
or
as a dealer in securities in any jurisdiction (except New York, if required
by
law) where it is not otherwise qualified or (ii) take any action that
would
subject it to general service of process in suits or to taxation in any such
jurisdiction where it is not then so subject.
(g)
Upon
(i) the filing of the Initial Resale Registration Statement and
(ii) the effectiveness of the Initial Resale Registration Statement,
announce the same, in each case by press release or any other means of
dissemination reasonably expected to make such information known
publicly.
(h)
The
Company will use its commercially reasonable best efforts to file as soon as
practicable following the Issue Date to file an application for listing of
the
Registrable Securities to obtain the listing of the Registrable Securities
on
the American Stock Exchange.
SECTION
4. Holder’s
Obligations.
Each
Holder agrees, by acquisition of the Registrable Securities, that no Holder
of
Registrable Securities shall be entitled to sell any of such Registrable
Securities pursuant to a Registration Statement or to receive a Prospectus
relating thereto, unless such Holder has furnished the Company with a Notice
and
Questionnaire as required pursuant to this Section 4 (including the information
required to be included in such Notice and Questionnaire) and the information
set forth in the next sentence. Each Holder of Registrable Securities wishing
to
sell Registrable Securities pursuant to the Initial or any Subsequent Resale
Registration Statement and related Prospectus agrees to deliver a Notice and
Questionnaire to the Company at least five (5) business days prior to the filing
of the Initial Resale Registration Statement or Subsequent Resale Registration
Statement. Each Notice Holder agrees promptly to furnish to the Company in
writing all information required to be disclosed in order to make the
information previously furnished to the Company by such Notice Holder not
misleading, any other information regarding such Notice Holder and the
distribution of such Registrable Securities as may be required to be disclosed
in the Registration Statement under applicable law or pursuant to SEC comments
and any information otherwise required by the Company to comply with applicable
law or regulations. Each Holder further agrees, following termination of the
Effectiveness Period, to notify the Company, within twenty (20) Business Days
of
a request, of the amount of Registrable Securities sold pursuant to the
Registration Statement and, in the absence of a response, the Company may assume
that all of the Holder’s Registrable Securities were so sold.
7
SECTION
5. Registration
Expenses.
The
Company shall bear all fees and expenses incurred in connection with the
performance by the Company of its obligations under Sections 2 and 3
of
this Agreement whether or not any of the Registration Statements are declared
effective. Such fees and expenses shall include, without limitation,
(i) all registration and filing fees (including, without limitation,
fees
and expenses (x) with respect to filings required to be made with the
American Stock Exchange and (y) of compliance with federal and state
securities or Blue Sky laws to the extent such filings or compliance are
required pursuant to this Agreement (including, without limitation, reasonable
fees and disbursements of the counsel specified in the next sentence in
connection with Blue Sky qualifications of the Registrable Securities under
the
laws of such jurisdictions as the Notice Holders of a majority of the
Registrable Securities being sold pursuant to a Registration Statement may
designate)), (ii) printing expenses, (iii) duplication expenses
relating to copies of any Registration Statement or Prospectus delivered to
any
Holders hereunder, and (iv) fees and disbursements of counsel for the
Company in connection with the Resale Registration Statement. In addition,
the
Company shall pay its internal expenses (including, without limitation, all
salaries and expenses of officers and employees performing legal or accounting
duties), and its expenses for any annual audit, the fees and expenses incurred
in connection with the listing of the Registrable Securities on any securities
exchange on which the same securities of the Company are then listed and the
fees and expenses of any person, including special experts, retained by the
Company.
SECTION
6. Registrant
and Information Requirements.
The
Company represents that Form S-3 under the Securities Act is, on the date of
this Agreement, available for the registration of the Registrable Securities
by
the Company for sale by the Holders. The Company covenants that (a) during
the Effectiveness Period, it will (i) make and keep public information
available, as those terms are understood and defined in Rule 144, (ii) take
such action as is necessary to enable the Holders to utilize Form S 3 for the
sale of their Registrable Securities, (iii) file with the SEC in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act, and (b) so long as any Holder owns
any
Registrable Securities, it will furnish to such Holder, forthwith upon request
(i) a written statement by the Company that it has complied with the
reporting requirements of Rule 144, the Securities Act and the Exchange 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 in availing
any
Holder of any rule or regulation of the SEC that permits the selling of any
such
securities without registration or Form S-3.
8
SECTION
7. Indemnification
and Contribution.
(a) The
Company agrees to indemnify and hold harmless each Holder of Registrable
Securities covered by the Resale Registration Statement, the directors,
officers, employees, Affiliates and agents of each such Holder and each person
who controls any such Holder within the meaning of either the Securities Act
or
the Exchange Act against any and all losses, claims, damages or liabilities,
joint or several, to which they or any of them may become subject under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained
in
the Resale Registration Statement or in any amendment thereof, in each case
at
the time such became effective under the Securities Act, or in any preliminary
Prospectus or the Prospectus, or in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the
statements therein (in the case of any preliminary Prospectus or the Prospectus,
in the light of the circumstances under which they were made) not misleading,
and agrees to reimburse each such indemnified party, as incurred, for any legal
or other expenses reasonably incurred by it in connection with investigating
or
defending any such loss, claim, damage, liability or action; provided,
however,
that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished
to
the Company by or on behalf of the party claiming indemnification specifically
for inclusion therein. This indemnity agreement shall be in addition to any
liability that the Company may otherwise have.
(b) Each
Holder of securities covered by the Resale Registration Statement severally
and
not jointly agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who signs the Resale Registration Statement
and
each person who controls the Company within the meaning of either the Securities
Act or the Exchange Act, to the same extent as the foregoing indemnity from
the
Company to each such Holder, but only with reference to written information
relating to such Holder furnished to the Company by or on behalf of such Holder
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement shall be acknowledged by each Notice Holder
that is not a
Subscriber in such Notice Holder's Notice and Questionnaire and shall be in
addition to any liability that any such Notice Holder may otherwise
have.
9
(c) Promptly
after receipt by an indemnified party under this Section 7 or notice
of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 7,
notify the indemnifying party in writing of the commencement thereof; but the
failure so to notify the indemnifying party (i) will not relieve it
from
liability under paragraph (a) or (b) above unless such failure
results
in the forfeiture by the indemnifying party of substantial rights and defenses
or otherwise materially prejudices the indemnifying party; and (ii) will
not, in any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel (including local counsel) of the indemnifying party's choice
at the indemnifying party's expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying
party
shall not thereafter be responsible for the fees and expenses of any separate
counsel, other than local counsel if not appointed by the indemnifying party,
retained by the indemnified party or parties except as set forth below);
provided,
however,
that
such counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel (including
local counsel) to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses
of
such separate counsel if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a
conflict of interest; (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties that are different from or additional to those available to the
indemnifying party; (iii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution
of
such action; or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party.
An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d)
If
the indemnification to which an indemnified party is entitled under this
Section 7 is for any reason unavailable to or insufficient although
applicable in accordance with its terms to hold harmless an indemnified party
in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, in such proportion as is appropriate to reflect
the relative fault of the indemnifying party or parties on the one hand and
of
the indemnified party on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The
relative fault of the Company on the one hand and the Holders of the Registrable
Securities or the Subscriber on the other hand shall be determined by reference
to, among other things, whether any such untrue or alleged untrue statement
of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the holder of the Registrable
Securities or the Subscriber and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.
10
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 7(d) were determined by pro rata allocation
or by
any other method of allocation which does not take account of the equitable
considerations referred to above in this Section 7(d). The aggregate
amount
of losses, liabilities, claims, damages, and expenses incurred by an indemnified
party and referred to above in this Section 7(d) shall be deemed to
include
any out-of-pocket legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding
the provisions of this Section 7, neither the Holder of any Registrable
Securities nor the Subscriber shall be required to indemnify or contribute
any
amount in excess of the amount by which the total price at which the Registrable
Securities sold by such Holder of Registrable Securities or by the Subscriber,
as the case may be, and distributed to the public were offered to the public
exceeds the amount of any damages that such Holder of Registrable Securities
or
the Subscriber has otherwise been required to pay by reason of such untrue
or
alleged untrue statement or omission or alleged omission.
No
person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who
was
not guilty of such fraudulent misrepresentation.
For
purposes of this Section 7(d), each person, if any, who controls the
Subscriber or any Holder of Registrable Securities within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act
shall have the same rights to contribution as the Subscriber or such Holder,
and
each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange
Act
shall have the same rights to contribution as the Company.
(e) The
provisions of this Section 7 shall remain in full force and effect,
regardless of any investigation made by or on behalf of any Holder or the
Company or any of the indemnified persons referred to in this Section 7,
and shall survive the sale by a Holder of Registrable Securities covered by
the
Resale Registration Statement.
SECTION
8. Miscellaneous
(a) No
Conflicting Agreements.
The
Company is not, as of the date hereof, a party to, nor shall they, on or after
the date of this Agreement, enter into, any agreement with respect to the
Company’s securities that conflicts with the rights granted to the Holders of
Registrable Securities in this Agreement. The Company represents and warrants
that the rights granted to the Holders of Registrable Securities hereunder
do
not in any way conflict with the rights granted to the holders of the Company’s
securities under any other agreements.
11
(b) Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this sentence, may
not
be amended, modified or supplemented, and waivers or consents to departures
from
the provisions hereof may not be given, unless the Company has obtained the
written consent of Holders of a majority of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to
the
rights of Holders of Registrable Securities whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect the rights of other Holders of Registrable Securities may be given by
Holders of at least a majority of the Registrable Securities being sold by
such
Holders pursuant to such Registration Statement; provided,
that
the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding sentence.
Each Holder of Registrable Securities outstanding at the time of any such
amendment, modification, supplement, waiver or consent or thereafter shall
be
bound by any such amendment, modification, supplement, waiver or consent
effected pursuant to this Section 8(b), whether or not any notice, writing
or marking indicating such amendment, modification, supplement, waiver or
consent appears on the Registrable Securities or is delivered to such
Holder.
(c) Notices.
All
notices and other communications provided for or permitted hereunder shall
be
made in writing by hand delivery, by telecopier, by courier guaranteeing
overnight delivery or by first-class mail, return receipt requested, and shall
be deemed given (i) when made, if made by hand delivery, (ii) upon
confirmation, if made by telecopier, (iii) one (1) Business Day after
being
deposited with such courier, if made by overnight courier, or (iv) on
the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:
if
to a
Notice Holder, at the most current address given by such Holder to the Company
in a Notice and Questionnaire or any amendment thereto;
if
to the
Company, to:
Apollo
Gold Corporation
0000
X.
Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx
Xxxxxxx, Xxxxxxxx, X.X.X., 80111- 3220
Facsimile:
(000) 000-0000
Attention:
Chief Financial Officer
with
a
copy to:
Xxxxx
Xxxxxx & Xxxxxx LLP
0000
Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx,
Xxxxxxxx 00000
Attention:
Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile
No. (000) 000-0000
or
to
such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance
herewith.
12
(d) Approval
of Holders.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by
the
Company or its Affiliates (other than the Subscriber or subsequent Holders
of
Registrable Securities if such subsequent Holders are deemed to be such
Affiliates solely by reason of their holdings of such Registrable Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
(e) Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
assigns of each of the parties hereto and, without requiring any express
assignment, shall inure to the benefit of and be binding upon each Holder of
any
Registrable Securities; provided,
that
nothing herein shall be deemed to permit any assignment, transfer of other
disposition of Registrable Securities in violation of the terms of the
Subscription Agreement. If any transferee of any Holder shall acquire
Registrable Securities in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be subject to all of the terms of this
Agreement and by taking and holding such Registrable Securities such person
shall be conclusively deemed to have agreed to be bound by and to perform all
of
the terms and provisions of this Agreement.
(f) Counterparts.
This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be original and all of which taken together shall constitute one and the
same
agreement.
(g) Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
(h) Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE
STATE OF COLORADO.
(i) Severability.
If any
term, provision, covenant or restriction of this Agreement is held to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated thereby, and
the
parties hereto shall use their reasonable best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction, it being intended
that all of the rights and privileges of the parties hereto shall be enforceable
to the fullest extent permitted by law.
(j) Entire
Agreement.
This
Agreement is intended by the parties hereto as a final expression of their
agreement and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and the registration rights granted by the Company
with
respect to the Registrable Securities. Except as provided in the Subscription
Agreement, there are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein, with respect to the
registration rights granted by the Company with respect to the Registrable
Securities. This Agreement supersedes all prior agreements and undertakings
among the parties hereto with respect to such registration rights.
(k) Termination.
This
Agreement and the obligations of the parties hereunder shall terminate upon
the
expiration of the Effectiveness Period.
13
IN
WITNESS WHEREOF
the
parties hereto have duly executed this Registration Rights Agreement as of
the
day and year set forth above.
| JIPANGU, INC. | ||
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| By: | /s/ Tamisuke Matsufuji | |
|
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|
Name:
Tamisuke Matsufuji
Office:
President and CEO
|
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