REGISTRATION RIGHTS AGREEMENT
Exhibit
10.13
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made as of the _____ day of
__________, 2006, by and among Key Gold Corporation, a Nevada corporation (the
“Company”), and the individuals and entities who have executed this Agreement
and are identified on the signature page hereto (each, a “Holder,” and
collectively, the “Holders”).
Recitals
WHEREAS,
in connection with the issuance of an aggregate of __________ shares of the
Company’s Common Stock to the Holders (the “Shares”) pursuant to Subscription
Agreements dated as of the date hereof by and between the Company and each
of
the Holders and the related issuance to the Holders of warrants to purchase
shares up to an aggregate of __________ shares of the Company’s Common Stock
(the “Warrants”), the Holders have requested, and the Company has agreed to
grant, registration rights in respect of the Shares and the shares of the
Company’s Common Stock underlying the Warrants (the “Warrant Shares”), as more
specifically set forth herein below.
NOW,
THEREFORE, the parties agree as follows:
Agreement
1. Registration
Rights.
The
Company covenants and agrees as follows:
1.1 Definitions.
For
purposes of this Section 1:
(a) The
term
“1933 Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
(b) The
term
“Common Stock” means the common stock, par value $0.001, of the
Company.
(c) The
term
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder.
(d) The
term
“Effective Deadline” has the meaning set forth in Section 1.3
herein.
(e) The
terms
“register,” “registered,” and “registration” refer to a registration effected by
preparing and filing a registration statement or similar document in compliance
with the 1933 Act, and the declaration or ordering of effectiveness of such
registration statement or document.
(f) The
term
“Registrable Securities” means (i) the Shares and the Warrant Shares (each
subject to appropriate adjustment for stock splits, stock dividends,
combinations and other recapitalizations after the date hereof (collectively,
a
“Recapitalization”)) and (ii) any Common Stock issued as a dividend or other
distribution with respect to, or in exchange for, or in replacement of the
shares referenced in (i) above, excluding in all cases, however, any Registrable
Securities that have been sold by a person privately, pursuant to the provisions
of Rule 144, or pursuant to a registration statement under the 1933 Act covering
such Registrable Securities that has been declared effective by the
SEC.
(g) The
number of shares of “Registrable Securities then outstanding” shall be
determined by the number of shares of Common Stock outstanding that are
Registrable Securities.
(h) The
term
“SEC” means the Securities and Exchange Commission or any successor
thereto.
1.2 Information
Under 1934 Act. With
a
view to making available to the Holders the benefits of Rule 144 promulgated
under the 1933 Act and any other rule or regulation of the SEC that may at
any
time permit the Holders to sell the Registrable Securities without registration,
the Company agrees, for so long as the Holders own any Registrable Securities
not transferable pursuant to paragraph (k) of Rule 144, to:
(a) Make
and
keep public information available, as those terms are understood and defined
in
SEC Rule 144;
(b) File
with
the SEC in a timely manner all reports and other documents required of the
Company under the 1934 Act or deliver to the Company’s market-makers all current
information required of the Company under Section 15c2-11 of the 1934 Act and
to
make all financial statements of the Company available to its stockholders;
and
(c) Furnish
to the Holders upon request (i) a written statement by the Company that it
has
complied with the reporting requirements of SEC Rule 144 and the 1934 Act,
and
(ii) such other information as may be reasonably requested in availing the
Holders of any rule or regulation of the SEC which permits the selling of any
such securities without registration or pursuant to such form.
1.3 Mandatory
Registration. The
Company shall use its commercially reasonable efforts to file with the SEC
a
registration statement on Form SB-2 (or, if Form SB-2 is not then available
to
the Company, on such form of registration statement as is then available to
effect a registration for resale of the Registrable Securities) (the
“Registration Statement”), registering all of the Registrable Securities for
resale no later than two weeks after the filing of the Company’s 10-KSB for the
current fiscal year and to diligently prosecute the Registration Statement
to
cause it to be declared effective by the SEC as soon as practicable
thereafter.
1.4 Obligations
of the Company. Whenever
required under this Section 1 to effect the registration of any Registrable
Securities, the Company, at its expense, shall, as expeditiously as reasonably
possible:
(a) Prepare
and file with the SEC a registration statement with respect to such Registrable
Securities and use its reasonable best efforts to cause such registration
statement to become effective and, subject to the proviso in this Section
1.4(a), keep such registration statement effective for a period of up to ninety
(90) days or until the distribution contemplated in the Registration Statement
has been completed; provided,
however,
that
applicable rules under the 1933 Act governing the obligation to file a
post-effective amendment permit, in lieu of filing a post-effective amendment
that (i) includes any prospectus required by Section 10(a)(3) of the 1933 Act,
or (ii) reflects facts or events representing a material or fundamental change
in the information set forth in the registration statement, the incorporation
by
reference of information required to be included in (i) and (ii) above to be
contained in periodic reports filed pursuant to Section 13 or 15(d) of the
1934
Act in the registration statement.
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(b) Prepare
and file with the SEC such amendments and supplements to such registration
statement and the prospectus provided by Company in connection with such
registration statement as may be necessary to comply with the provisions of
the
1933 Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish
to the Holders such numbers of copies of a prospectus in conformity with the
requirements of the 1933 Act, and such other documents as the Holders may
reasonably request from time to time in order to facilitate the disposition
of
Registrable Securities owned by it.
(d) Use
its
best efforts to register and qualify the securities covered by such registration
statement under such other securities or Blue Sky laws of such jurisdictions
as
shall be reasonably requested by the Holders; provided that the Company shall
not be required in connection therewith or as a condition thereto to qualify
to
do business or to file a general consent to service of process in any such
states or jurisdictions, unless the Company is already required to qualify
to do
business or subject to service in such jurisdiction and except as may be
required by the 1933 Act.
(e) In
the
event of any underwritten public offering, enter into and perform its
obligations under an underwriting agreement, in usual and customary form, with
the managing underwriter of such offering. If a Holder makes such request
referenced in Section 1.4 above to have his Registrable Securities included
in
such registration and underwriting, the Holder shall also enter into and perform
his obligations under such an underwriting agreement.
(f) Notify
each Holder of Registrable Securities covered by such registration statement
at
any time when a prospectus relating thereto is required to be delivered under
the 1933 Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to
be
stated therein or necessary to make the statements therein not misleading in
the
light of the circumstances then existing, and, at
the
request of a Holder, prepare and furnish to such Holder a reasonable number
of
supplements to, or amendment of, such prospectus as may be necessary so that,
as
thereafter delivered to the purchasers of such share, such prospectus shall
not
include an untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary to make the statements therein not
misleading or incomplete in light of the circumstances then existing.
(g) Use
its
reasonable best efforts to cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange on which similar
securities issued by the Company are then listed.
(h) Provide
a
transfer agent and registrar for all Registrable Securities registered pursuant
hereunder and a CUSIP number for all such Registrable Securities, in each case
not later than the effective date of such registration.
(i) Make
available for inspection by any underwriter participating in any disposition
pursuant to such registration, and any attorney or accountant retained by the
underwriter, all financial and other records, pertinent corporate documents
and
properties of the Company, and cause the Company’s officers and directors to
supply all information reasonably requested by the underwriter, attorney or
accountant in connection with such registration statement; provided,
however,
that
the underwriter, attorney, or accountant shall agree to hold in confidence
and
trust all information so provided.
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(j) Make
available to each Holder participating in such registration, upon the request
of
such Holder:
(i) in
the
case of an underwritten public offering, a copy of any opinion of counsel for
the Company provided to the underwriters participating in such offering, dated
the date such shares are delivered to such underwriters for sale in connection
with the registration statement;
(ii) in
the
case of an underwritten public offering, a copy of any “comfort” letters
provided to the underwriters participating in such offering and signed by the
Company’s independent public accountants who have examined and reported on the
Company’s financial statements included in the registration statement, to the
extent permitted by the standards of the AICPA or other relevant authorities;
and
(iii) a
copy of
all documents filed with and all correspondence from or to the SEC in connection
with any such offering other than non-substantive cover letters and the
like.
(k) otherwise
use its reasonable best efforts to comply with all applicable rules and
regulations of the SEC, and timely make available to its security holders an
earnings statement covering the period of at least 12 months, but not more
than
18 months, beginning with the first month after the effective date of the
registration statement, which earnings statement shall satisfy the provisions
of
Section 11(a) of the 1933 Act.
1.5 Furnish
Information.
It shall
be a condition precedent to the obligations of the Company to take any action
pursuant to this Section 1 with respect to Registrable Securities of any selling
Holder that such Holder shall furnish to the Company such information regarding
itself, its affiliates, the Registrable Securities held by it, and the intended
method of disposition of such securities as shall be required to effect the
registration of such Holder’s Registrable Securities.
1.6 Expenses
of Company Registration. The
Company shall bear and pay all expenses incurred by it in connection with any
registration, filing, or qualification of Registrable Securities with respect
to
the registrations pursuant to Section 1.3 for the Holders and compliance with
the terms hereof, including (without limitation) all registration, filing,
and
qualification fees, printers and accounting fees relating or apportionable
thereto, and the fees and disbursements of counsel for the Company, but
excluding underwriting discounts and commissions relating to Registrable
Securities.
1.7 Reductions
of Registrable Securities to be Included.
In
connection with any offering involving an underwriting of shares of the
Company’s capital stock, the Company shall not be required under Section 1.3 to
include a Holder’s securities in such underwriting unless such Holder accepts
the terms of the underwriting as agreed upon between the Company and the
underwriters selected by the Company and then only in such quantity as the
underwriters determine in their sole discretion will not jeopardize the success
of the offering by the Company. If the total amount of securities, including
Registrable Securities, requested by stockholders to be included in such
offering exceeds the amount of securities sold other than by the Company that
the underwriters determine in their sole discretion is compatible with the
success of the offering, then the Company shall be required to include in the
offering only that number of such securities, including Registrable Securities,
which the underwriters determine in their sole discretion will not jeopardize
the success of the offering (the securities so included to be apportioned pro
rata among the selling stockholders according to the total amount of securities
entitled to be included therein owned by each selling stockholder or in such
other proportions as shall mutually be agreed to by such selling stockholders).
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1.8 Delay
of Registration. The
Holders shall not have any right to obtain or seek an injunction restraining
or
otherwise delaying any such registration as the result of any controversy that
might arise with respect to the interpretation or implementation of this Section
1.
1.9 Indemnification.
In
the
event any Registrable Securities are included in a registration statement under
this Section 1:
(a) To
the
extent permitted by law, the Company will indemnify and hold harmless the
Holders, each officer and director of the Holders, any underwriter (as defined
in the 0000 Xxx) of the Holders, and each person, if any, who controls the
Holders or underwriter within the meaning of the 1933 Act or the 1934 Act,
against any losses, claims, damages, or liabilities (joint or several) to which
they may become subject under the 1933 Act, the 1934 Act, or other federal
or
state law, insofar as such losses, claims, damages, or liabilities (or actions
in respect thereof) arise out of or are based upon any of the following
statements, omissions, or violations (collectively, a “Violation”): (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto; (ii)
the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading;
or
(iii) any violation or alleged violation by the Company of the 1933 Act, the
1934 Act, any state securities law, or any rule or regulation promulgated under
the 1933 Act, the 1934 Act, or any state securities law; and the Company will
pay to the Holders, underwriter, or controlling person any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided,
however,
that
the indemnity agreement contained in this Section 1.9(a) shall not apply to
(1)
a Holder if he is either an officer or director of the Company at the time
of
the statement, omission, or violation (a “Management Holder”), unless such
Management Holder has sold shares included in the registration statement, (2)
amounts paid in settlement of any such loss, claim, damage, liability, or action
if such settlement is effected without the consent of the Company (which consent
shall not be unreasonably withheld), or (3) any such loss, claim, damage,
liability, or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration
by
a Holder (including each officer and director of such Holder), underwriter,
or
controlling person.
(b) To
the
extent permitted by law, the selling Holders will indemnify and hold harmless
the Company, each of its directors, each of its officers who has signed the
registration statement, each person, if any, who controls the Company within
the
meaning of the 1933 Act, any underwriter, and any controlling person of any
such
underwriter, against any losses, claims, damages, or liabilities (joint or
several) to which any of the foregoing persons may become subject, under the
1933 Act, the 1934 Act, or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or actions in respect thereto) 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 by the Holder, or by an officer or director of
the
Holders expressly for use in connection with such registration; and the Holders
will pay any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this Section 1.9(b) in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided,
however,
that
the indemnity agreement contained in this Section 1.9(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability, or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; provided,
further,
that in
no event shall any indemnity under this Section 1.9(b) exceed the gross proceeds
from the offering received by the Holders net of underwriters’ commissions and
discounts.
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(c) Promptly
after obtaining actual knowledge of any third party claim or action as to which
it may seek indemnification under this Section 1.9, an indemnified party will,
if a claim in respect thereof is to be made against any indemnifying party
under
this Section 1.9, deliver to the indemnifying party a written notice 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 the defense thereof with counsel mutually
satisfactory to the parties; provided,
however,
that an
indemnified party (together with all other indemnified parties which may be
represented without conflict by one counsel) shall have the right to retain
one
separate counsel, with the fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained
by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement
of
any such action shall relieve such indemnifying party of any liability to the
indemnified party under this Section 1.9, if, and to the extent that, such
failure is prejudicial to such indemnifying party’s ability to defend such
action, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 1.9.
(d) If
the
indemnification provided for in this Section 1.9 is held by a court of competent
jurisdiction to be unavailable to an indemnified party with respect to any
loss,
liability, claim, damage, or expense referred to therein, then the indemnifying
party, in lieu of indemnifying such indemnified party hereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such loss, liability, claim, damage, or expense (including, without
limitation, legal and other expenses incurred by such indemnified party in
investigating or defending any such action or claim) in such proportion as
is
appropriate to reflect the relative fault of the indemnifying party on the
one
hand and of the indemnified party on the other in connection with the statements
or omissions that resulted in such loss, liability, claim, damage, or expense
as
well as any other relevant equitable considerations. The relative fault of
the
indemnifying party and of the indemnified party shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party and the parties’
relative intent, knowledge, access to information, and opportunity to correct
or
prevent such statement or omission. Notwithstanding the provisions of this
Section 1.9, the Holders shall not be required to contribute any amount or
make
any other payments under this Agreement, which in the aggregate exceed the
net
proceeds received by the Holders from the offering covered by the applicable
registration statement.
(e) Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement entered into in connection
with the underwritten public offering are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall
control.
(f) The
obligations of the Company and Holders under this Section 1.9 shall survive
the
completion of any offering of Registrable Securities in a registration statement
under this Section 1, and otherwise.
1.11 Transfer
of Registration Rights. The
rights to cause the Company to register Registrable Securities pursuant to
this
Section 1 may be transferred only to any person or entity that is a relative
or
an affiliate of the transferring Holder in connection with a permitted transfer
of the Registrable Securities exempt from registration under the 1933
Act.
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1.12 “Market
Stand-Off”
Agreement. Each
Holder hereby agrees that, during the period of duration specified by the
Company and an underwriter of common stock or other securities of the Company,
following the effective date of a registration statement of the Company filed
under the 1933 Act, it shall not, to the extent requested by the Company and
such underwriter, directly or indirectly sell, offer to sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase,
or otherwise transfer or dispose of (other than to donees who agree to be
similarly bound) any securities of the Company held by him or her any time
during such period except common stock included in such registration;
provided,
however,
that:
(a) Such
agreement shall be applicable only to the first two such registration statements
of the Company which covers common stock (or other securities) to be sold on
its
behalf to the public in an underwritten offering;
(b) Such
market stand-off time period shall not exceed 180 days;
and
(c) All
officers and directors of the Company and holders of record of not less than
three percent of the Company’s common stock enter into similar
agreements.
In
order
to enforce the foregoing covenant, the Company may impose stop-transfer
instructions with respect to the Registrable Securities of each Holder (and
the
shares or securities of every other person subject to the foregoing restriction)
until the end of such period.
Notwithstanding
the foregoing, the obligations described in this Section 1.12 shall not apply
to
a registration relating solely to employee benefit plans on Form S-1 or Form
S-8
or similar forms which may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms which may be promulgated in the future.
2. Miscellaneous.
2.1 Successors
and Assigns. Except
as
otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties (including transferees of any shares of Registrable
Securities). Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this
Agreement.
2.2 Governing
Law. This
Agreement shall be governed by and construed under the laws of the State of
Nevada as applied to agreements among Nevada residents entered into and to
be
performed entirely within Nevada.
2.3 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
2.4 Titles
and Subtitles.
The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.
2.5 Notices. Any
notice required or permitted under this Agreement shall be given in writing
and
shall be deemed effectively given upon personal delivery to the party to be
notified or by telex or confirmed facsimile, or one delivery day after deposit
with a recognized overnight express delivery service or courier (for FedEx
Express Overnight or equivalent delivery to and from an address within the
United States of America) or three delivery days after deposit with a recognized
overnight express delivery service or courier (for FedEx Express International
Priority or equivalent delivery to and from an address outside the United States
of America), and addressed to the party to be notified at the address indicated
for such party below, or at such other address as such party may designate
by
ten days’ advance written notice to the other party:
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(a)
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If
to the Company:
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Key
Gold Corporation
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Attention:
President
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0000
Xxxxxxxx, Xxxxx 000
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Xxxxxxx,
Xxxxxxxx 00000
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Fax
number:
(000) 000-0000
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with
a copy to:
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(which
shall not constitute notice)
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Xxxxx
Xxxx LLP
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Attention:
Xxxxxxx X. Xxxx
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0000
Xxxx Xxxxxx, Xxxxx 000
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Xxxxxx,
Xxxxxxxxxx 00000-0000
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Fax
number: (000) 000-0000
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(b)
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If
to a Holder:
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See
signature page to this Agreement
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with
a copy to:
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(which
shall not constitute notice)
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| ______________________ | |
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Attention:_________________
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| ______________________ | |
| ______________________ | |
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Fax
number:________________
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or
to
such other person or address as any party shall specify by notice in writing
to
each of the other parties. All such notices, requests, demands, waivers, and
communications shall be deemed to have been received on the date of delivery
if
the date of transmission is electronically endorsed automatically on the media
or evidenced by courier service documentation. If notice is mailed or
transmitted in a manner in which date of delivery cannot be ascertained from
the
media used or courier service records, notice shall be deemed given on the
fifth
business day after the mailing or other transmission or delivery thereof. A
notice of a change of address shall be effective only upon receipt.
2.6 Expenses.
If any
action at law or in equity is necessary to enforce or interpret the terms of
this Agreement, the prevailing party shall be entitled to reasonable attorneys’
fees, costs, and necessary disbursements in addition to any other relief to
which such party may be entitled.
2.7 Amendments
and Waivers.
Any term
of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the holders representing a majority of the Registrable Securities then
outstanding. Any amendment or waiver effected in accordance with this Section
2.7 shall be binding upon each holder of any Registrable Securities then
outstanding, each future holder of all such Registrable Securities, and the
Company; provided that, without the consent of the Company and holders
representing a majority of the Registrable Securities then outstanding, no
amendment to this Agreement may be made that (i) modifies this Section 2.7,
or
(ii) would affect the holders of the Registrable Securities in a
disproportionate manner (other than any disproportionate results that are due
to
a difference in the relative stock ownership in the Company).
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2.8 Severability.
If one
or more provisions of this Agreement are held to be unenforceable under
applicable law, such provision shall be excluded from this Agreement and the
balance of the Agreement shall be interpreted as if such provision were so
excluded and shall be enforceable in accordance with its terms.
2.9 Aggregation
of Stock.
All
shares of Registrable Securities held or acquired by affiliated entities or
persons shall be aggregated together for the purpose of determining the
availability of any rights under this Agreement.
2.10 Entire
Agreement.
This
Agreement constitutes the full and entire understanding and agreement between
the parties regarding the matters set forth herein. Except as otherwise
expressly provided herein, the provisions hereof shall inure to the benefit
of,
and be binding upon the successors, assigns, heirs, executors, and
administrators of the parties hereto.
2.11 Further
Assurances.
At any
time, and from time to time, each party will execute such additional instruments
and take such action as may be reasonably requested by any other party to carry
out the intent and purposes of this Agreement.
2.12 Arbitration.
Any
dispute, controversy, or claim arising out of or relating to this Agreement
or
the Registrable Securities will be resolved by binding arbitration before a
retired judge at JAMS in Xxxxx County, Nevada. Any interim or final arbitration
award by be enforced by any court of competent jurisdiction.
[BALANCE
OF PAGE INTENTIONALLY LEFT BLANK.]
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IN
WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first
above written.
KEY
GOLD CORPORATION
By:_______________________________
Name:_____________________________
Title:______________________________
HOLDERS:
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[name]
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[street]
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[city,
state, postal code, country]
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[facsimile
number]
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[street]
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[city,
state, postal code, country]
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[facsimile
number]
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