Exhibit 10.2
CALIBRE ENERGY, INC.
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made as of
April 18, 2006, by and among Calibre Energy, Inc., a Nevada corporation (the
"Company"), and the undersigned holders of common stock (the "Company Stock") of
the Company together with their qualifying transferees (the "Holders").
RECITALS:
A. The Company has sold Units comprised of shares of the Company's Common
Stock and warrants exercisable for shares of the Company's Common Stock
(collectively with the shares sold, the "Common Shares") to the Holders
pursuant to one or more Subscription Agreements (each a
"Subscription").
B. The sale of the Units is conditional upon the granting of the rights
set forth herein, and by this Agreement the Company and the Holders
desire to provide for certain rights as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, the parties, severally and not jointly,
hereby agree as follows:
AGREEMENT:
1. Registration Rights.
1.1 Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:
(a) The terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act of 1933,
as amended (the "Securities Act"), and the declaration or ordering of
the effectiveness of such registration statement.
(b) The term "Registrable Securities" means (i) any and all
Common Shares issued or issuable upon exercise of the warrants issued
and sold by the Company pursuant to the Subscriptions; (ii) stock
issued in lieu of the Common Shares referred to in (i) in any
reorganization which has not been sold to the public; or (iii) stock
issued in respect of the Common Shares referred to in (i) and (ii) as
a result of a stock split, stock dividend, recapitalization or the
like, which has not been sold to the public.
(c) The terms "Holder" or "Holders" means any person or
persons who hold Registrable Securities or qualifying transferees
under subsection 1.9 hereof who hold Registrable Securities.
(d) The term "SEC" means the Securities and Exchange
Commission.
1
(e) The term "Registration Expenses" shall mean all expenses
incurred by the Company in complying with subsections 1.2, 1.3 and 1.4
hereof, including, without limitation, all registration, qualification
and filing fees, printing expenses, escrow fees, fees and
disbursements of counsel for the Company, blue sky fees and expenses,
and the expense of any special audits incident to or required by any
such registration (but excluding the compensation of regular employees
of the Company which shall be paid in any event by the Company).
1.2 Company Registration.
(a) Registration. If at any time or from time to time, the
Company shall determine to register any shares of its common stock,
for its own account or the account of any of its shareholders, other
than a registration on Form S-8 relating solely to employee, director
or consultant stock option or purchase plans or other equity
compensation plans, or a registration on Form S-4 relating solely to a
SEC Rule 145 transaction, the Company will:
(i) promptly give to each Holder written notice
thereof at least 10 days prior to the initial filing of the
registration statement relating to such registration; and
(ii) include in such registration, and in any
underwriting involved therein, all the Registrable
Securities specified in a written request or requests, made
within 5 days after receipt of such written notice from the
Company, by any Holder or Holders, except as set forth in
subsection 1.2(b) below.
Notwithstanding the foregoing, if the Company shall have
already registered for resale pursuant to a registration in
accordance with Section 1.3 all of the Registrable
Securities, the Company shall not be required to include
such Registrable Securities in the Company's registration or
to deliver the written notice to each Holder as provided in
subsection 1.2(a)(i).
(b) Underwriting.
(i) If the registration of which the Company gives
notice is for a registered public offering involving an
underwriting, the Company shall so advise the Holders as a
part of the written notice given pursuant to subsection
1.2(a)(i). In such event the right of any Holder to
registration pursuant to subsection 1.2 shall be conditioned
upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the
underwriting to the extent provided herein. Notwithstanding
the foregoing, if the Company proposes to commence an
underwriting with respect to shares of its common stock and
shall not have otherwise been required to deliver a notice
of the registration to the Holders of its Registrable
Securities pursuant to the last sentence of subsection
1.2(a), the Company shall deliver a written notice of such
2
underwriting at least 10 days prior to the commencement of
such underwriting and provide the Holders an opportunity to
participate in such underwriting in accordance with this
subsection 1.2(b). The Company shall, subject to subsection
1.2(b)(ii) below, include the Registrable Securities of any
Holder in such underwriting that specifies in a written
request or requests, made within 5 days after receipt of
such written notice from the Company. All Holders proposing
to distribute their Registrable Securities through any such
underwriting pursuant to this subsection 1.2(b) shall
(together with the Company and the other shareholders
distributing their shares of common stock through such
underwriting) enter into an underwriting agreement in
customary form with the underwriter or underwriters selected
for such underwriting by the Company.
(ii) Notwithstanding any other provision of this
subsection 1.2, if the underwriter managing such public
offering determines that marketing factors require a
limitation of the number of shares of common stock to be
underwritten, and (A) if such registration is the first
registered offering of the sale of the Company's common
stock to the general public, the underwriter may limit the
number of Registrable Securities to be included in the
registration and underwriting, or may exclude Registrable
Securities entirely from such registration and underwriting,
or (B) if such registration is other than the first
registered offering of the sale of the Company's common
stock to the general public, the underwriter may limit the
amount of Registrable Securities to be included in the
registration and underwriting by the Company's shareholders;
provided, however, the number of Registrable Securities to
be included in such registration and underwriting under this
subsection 1.2(b)(ii) shall not be reduced to less than
thirty percent (30%) of the aggregate shares of common stock
included in such underwriting without the prior consent of
at least a majority of the Holders who have requested their
Registrable Securities to be included in such underwriting.
The Company shall so advise all Holders of Registrable
Securities which would otherwise be underwritten pursuant
hereto, and the number of shares of Registrable Securities
that may be included in the underwriting shall be allocated
among Holders requesting inclusion in such underwriting in
proportion, as nearly as practicable, to the respective
amounts of Registrable Securities held by each of such
Holders as of the date of the notice pursuant to subsection
1.2(a)(i) above; provided that the number of shares of
Registrable Securities requested to be included in such
underwriting shall not be reduced unless all other shares of
common stock being sold by shareholders other than the
Holders are first entirely excluded from the underwriting.
If any Holder disapproves of the terms of any such
underwriting, such Holder may elect to withdraw therefrom by
written notice to the Company and the underwriter. Any
Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from such registration.
1.3 Form SB-2 or S-3. In addition to the rights and obligations
set forth in subsection 1.2 above, within one hundred twenty (120) days of the
sale of the Units, Company will use commercially reasonable efforts to prepare
and file a registration statement on Forms SB-2 or S-3 (or any successor to
Forms SB-2 or S-3) to register the resale from time to time of the Holder's
Registrable Securities. In such a registration, the Company shall use
commercially reasonable efforts to cause such registration statement on Forms
SB-2 or S-3 (or any successor form to Forms SB-2 or S-3) to be declared
effective by the SEC as soon as practicable; provided, however, the Company
shall not be required to effect a registration pursuant to this subsection 1.3:
3
(a) in any particular jurisdiction in which the Company
would be required to execute a general consent to service of process
in effecting such registration, qualification or compliance unless the
Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act; or
(b) during the period starting with the date of filing of,
and ending on a date 90 days following the effective date of, a
registration statement pursuant to subsection 1.2, provided that the
Company is actively employing in good faith all reasonable efforts to
cause such registration statement to become effective and further
provided that no other person or entity could require the Company to
file a registration statement in such period.
Any Holder that intends to dispose of Registrable
Securities pursuant to a registration under this subsection
1.3 shall not offer, sell or otherwise dispose of any
Registrable Securities unless it has provided to the Company
a written notice of its intent to offer and sell the
Registrable Securities pursuant to a registration under this
subsection 1.3 at least ten (10) days prior to the offer or
sale of the Registrable Securities. Upon receipt of such
notice by the Company from a Holder, the Company may
voluntarily suspend the effectiveness of any registration
statement filed pursuant to this subsection 1.3 for a
limited time, which in no event shall be longer than 90 days
in any six-month period, if the Company has been advised by
counsel or underwriters to the Company that the offering for
resale of any Registrable Securities pursuant to the
registration statement would materially adversely affect, or
would be improper in view of (or improper without disclosure
in a prospectus), a proposed financing, a reorganization,
recapitalization, merger, consolidation or other transaction
involving the Company.
1.4 Expenses of Registration. All Registration Expenses incurred
in connection with any registration, qualification or compliance pursuant to
this Section 1 shall be borne by the Company except as follows:
(a) The Company shall not be required to pay fees or
disbursements of more than one firm of legal counsel to the Holders,
such fees to not exceed $10,000 in the aggregate.
(b) The Company shall not be required to pay underwriters'
fees, discounts or commissions relating to Registrable Securities.
1.5 Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep each Holder participating therein advised in writing as to
the initiation of each registration, qualification and compliance and as to the
completion thereof. Except as otherwise provided in subsection 1.4, at its
expense the Company will:
4
(a) Prepare and file with the SEC a registration statement
with respect to such Registrable Securities and use its commercially
reasonable efforts to cause such registration statement to become
effective, and, upon the request of the Holders of a majority of the
Registrable Securities registered thereunder, keep such registration
statement effective for up to 120 days, or if such registration
statement is on Form SB-2 or S-3 (or any successor to Form SB-2 or
S-3) and provides for sales of securities from time to time pursuant
to Rule 415 under the Securities Act, for up to one year.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such registration
statement.
(c) Furnish, without charge, to the Holders such numbers of
copies of a prospectus, including each preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other
documents as they may reasonably request in order to facilitate the
disposition of Registrable Securities owned by them. The Holders shall
not be entitled to use any selling materials other than a prospectus
and such other materials as may be approved by the Company, which
approval shall not be unreasonably withheld.
(d) Use its commercially reasonable 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 or any managing underwriter,
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.
(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. Notwithstanding the foregoing, the Company shall not be
obligated to enter into an underwriting agreement with any underwriter
unless the Company was previously consulted with respect to the
selection of each underwriter and the Company consented to such
selection, which consent shall not be unreasonably withheld. Each
Holder participating in such underwriting shall also enter into and
perform its obligations under such an 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 Securities Act or 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.
5
(g) The Company shall:
(i) make available for inspection by a
representative of the Holders, the managing underwriter
participating in any disposition pursuant to such
registration statement and one firm of attorneys designated
by the Holders (upon execution of customary confidentiality
agreements reasonably satisfactory to the Company and its
counsel), at reasonable times and in reasonable manner,
financial and other records, documents and properties of the
Company that are pertinent to the conduct of due diligence
customary for an underwritten offering, and cause the
officers, directors and employees of the Company to supply
all information reasonably requested by any such
representative, underwriter or attorney in connection with a
registration statement as shall be necessary to enable such
persons to conduct a reasonable investigation within the
meaning of Section 11 of the Securities Act.
(ii) use its commercially reasonable efforts to
cause all Registrable Securities covered by a registration
statement to be listed on any securities exchange or any
automated quotation system on which the shares of common
stock of the Company are then listed;
(iii) cause to be provided to the Holders that are
selling Registrable Securities pursuant to such registration
statement and to the managing underwriter if any disposition
pursuant to such registration statement is an underwritten
offering, upon the effectiveness of such registration
statement, a customary "10b-5" opinion of independent
counsel (an "Opinion") and a customary "cold comfort" letter
of independent auditors (a "Comfort Letter") in each case
addressed to such Holders and managing underwriter, if any;
(iv) notify in writing the Holders that are
selling Registrable Securities pursuant to such registration
statement and any managing underwriter if any disposition
pursuant to such registration statement is an underwritten
offering, (A) when the registration statement has become
effective and when any post-effective amendment thereto has
been filed and becomes effective, (B) of any request by the
SEC or any state securities authority for amendments and
supplements to the registration statement or of any material
request by the SEC or any state securities authority for
additional information after the registration statement has
become effective, (C) of the issuance by the SEC or any
state securities authority of any stop order suspending the
effectiveness of the registration statement or the
initiation of any proceedings for that purpose, (D) if,
between the effective date of the registration statement and
the closing of any sale of Registrable Securities covered
thereby, the representations and warranties of the Company
contained in any underwriting agreement, securities sales
agreement or other similar agreement, including this
6
Agreement, relating to disclosure cease to be true and
correct in all material respects or if the Company receives
any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any
jurisdiction or the initiation of any proceeding for such
purpose, (E) of the happening of any event during the period
the registration statement is effective such that such
registration statement or the related prospectus contains an
untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to
make statements therein not misleading (in the case of a
prospectus, in light of circumstances under which they were
made) and (F) of any determination by the Company that a
post-effective amendment to the registration statement would
be appropriate. The Holders hereby agree to suspend, and to
cause any managing underwriter to suspend, use of the
prospectus contained in a registration statement upon
receipt of such notice under clause (C), (E) or (F) above
until, in the case of clause (C), such stop order is removed
or rescinded or, in the case of clauses (E) and (F), the
Company has amended or supplemented such prospectus to
correct such misstatement or omission or otherwise.
If the notification relates to an event described
in clauses (E) or (F), the Company shall promptly prepare
and furnish to each selling Holder and each underwriter, if
any, a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to
the purchasers of such Registrable Securities, 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.
(v) provide and cause to be maintained a transfer
agent and registrar for all such Registrable Securities
covered by such registration statement not later than the
effective date of such registration statement;
(vi) deliver promptly upon request to each Holder
participating in the offering and each underwriter, if any,
copies of all correspondence between the SEC and the
Company, its counsel or auditors and all memoranda relating
to discussions with the SEC and its staff with respect to
the registration statement, other than those portions of any
such correspondence and memoranda which contain information
subject to attorney-client privilege with respect to the
Company, and, upon receipt of such confidentiality
agreements as the Company may reasonably request, make
reasonably available for inspection by any Holder of such
Registrable Securities covered by such registration
statement, by any underwriter, if any, participating in any
disposition to be effected pursuant to such registration
statement and by any attorney, accountant or other agent
retained by any such Holder or any such underwriter, all
pertinent financial and other records, pertinent corporate
documents and properties of the Company, and cause all of
the Company's officers, directors and employees to supply
all information reasonably requested by any such Holder,
underwriter, attorney, accountant or agent in connection
with such registration statement;
7
(vii) use commercially reasonable efforts to
obtain the withdrawal of any order suspending the
effectiveness of the registration statement;
(viii) provide a CUSIP number for all Registrable
Securities not later than the effective date of any
registration statement;
(ix) make reasonably available its employees and
personnel and otherwise provide reasonable assistance to the
underwriters in the marketing of Registrable Securities in
any underwritten offering;
(x) promptly prior to the filing of any document
which is to be incorporated by reference into the
registration statement or the prospectus (after the initial
filing of such registration statement) (other than a
registration statement or prospectus prepared pursuant to
subsection 1.3) provide copies of such document to counsel
to the seller of Registrable Securities and to the managing
underwriter, if any, and make the Company's representatives
reasonably available for discussion of such document and
make such changes in such document concerning such sellers
prior to the filing thereof as counsel for such sellers or
underwriters may reasonably request; and
(xi) cooperate with the sellers of Registrable
Securities and the managing underwriter, if any, to
facilitate the timely preparation and delivery of
certificates not bearing any restrictive legends
representing the Registrable Securities to be sold, and
cause such Registrable Securities to be issued in such
denominations and registered in such names in accordance
with the underwriting agreement prior to any sale of
Registrable Securities to the underwriters or, if not an
underwritten offering, in accordance with the instructions
of the sellers of Registrable Securities at least three
business days prior to any sale of Registrable Securities.
1.6 Indemnification.
(a) The Company will indemnify and hold harmless to the
fullest extent permitted by law each Holder of Registrable Securities
and each of its officers, directors and partners, and each person
controlling such Holder, with respect to which such registration,
qualification or compliance has been effected pursuant to this
Agreement, and each underwriter, if any, and each person who controls
any underwriter of the Registrable Securities held by or issuable to
such Holder, against all claims, losses, expenses, damages and
liabilities (or actions in respect thereto) arising out of or based on
(i) any untrue statement (or alleged untrue statement) of a material
fact contained in any registration statement under which such
securities were registered under the Securities Act or 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; (ii) any untrue statement (or alleged untrue statement) of
8
a material fact contained in any preliminary or final prospectus, or
based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the
statement therein, in light of the circumstances under which they were
made, or not misleading, or (iii) any violation or alleged violation
by the Company of the Securities Act, the Exchange Act or any state
securities law applicable to the Company or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any such
state law and relating to action or inaction required of the Company
in connection with any such registration, qualification of compliance,
and will reimburse each such Holder, each of its officers, directors
and partners, and each person controlling such Holder, each such
underwriter and each person who controls any such underwriter, within
a reasonable amount of time after incurred for any reasonable legal
and any other expenses incurred in connection with investigating,
defending or settling any such claim, loss, damage, liability or
action; provided, however, that the indemnity agreement contained in
this subsection 1.6(a) shall not apply to amounts paid in settlement
of any such claim, loss, damage, liability, or action if such
settlement is effected without the consent of the Company (which
consent shall not be unreasonably withheld); and provided further,
that the Company will not be liable in any such case to the extent
that any such claim, loss, damage or liability arises out of or is
based on any untrue statement or omission based upon written
information furnished to the Company by such Holder or underwriter
specifically for use therein; and provided further, however, that the
Company will not be liable in any such case to the extent that any
such claim, loss, damage or liability arises directly out of or is
based primarily upon an untrue statement or omission made in any
preliminary or final prospectus if (i) such Holder failed to send or
deliver a copy of the final prospectus or prospectus supplement with
or prior to the delivery of written confirmation of the sale of the
Registrable Securities and (ii) the final prospectus or prospectus
supplement would have corrected such untrue statement or omission.
(b) Each Holder will, if Registrable Securities held by or
issuable to such Holder are included in the securities as to which
such registration, qualification or compliance is being effected,
severally and not jointly, indemnify and hold harmless to the fullest
extent permitted by law the Company, each of its directors and
officers, each underwriter, if any, of the Company's securities
covered by such a registration statement, each person who controls the
Company within the meaning of the Securities Act, and each other such
Holder, each of its officers, directors and partners and each person
controlling such Holder, against all claims, losses, expenses, damages
and liabilities (or actions in respect thereof) arising out of or
based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement or final
prospectus, or based on any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and will reimburse the
Company, such Holders, such directors, officers, partners, persons or
underwriters for any reasonable legal or any other expenses incurred
in connection with investigating, defending or settling any such
claim, loss, damage, liability or action, in each case to the extent,
but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such
registration statement or prospectus in reliance upon and in
conformity with information furnished to the Company by such Holder
specifically for use therein; provided, however, that the indemnity
9
agreement contained in this subsection 1.6(b) shall not apply to
amounts paid in settlement of any such claim, loss, damage, liability
or action if such settlement is effected without the consent of the
Holder, (which consent shall not be unreasonably withheld); and
provided further, that the total amount for which any Holder shall be
liable under this subsection 1.6(b) shall not in any event exceed the
net proceeds received by such Holder from the sale of Registrable
Securities held by such Holder in such registration; and provided
further, that a Holder will not be liable in any such case to the
extent that any such claim, loss, damage or liability arises out of or
is based on any untrue statement or omission based upon written
information furnished to the Holder by the Company or underwriter
specifically for use therein.
(c) Each party entitled to indemnification under this
subsection 1.6 (the "Indemnified Party") shall give notice to the
party required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any
claim as to which indemnity may be sought, and shall permit the
Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or
litigation, shall be approved by the Indemnified Party (whose approval
shall not be unreasonably withheld), and the Indemnified Party may
participate in such defense at such party's expense; and provided
further, that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its
obligations hereunder, except to the extent such failure resulted in
material prejudice to the Indemnifying Party; and provided further,
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. No Indemnifying Party, in the defense of
any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect to such claim or litigation.
(d) If for any reason the foregoing indemnity is unavailable
or is insufficient to hold harmless an indemnified party under
subsection 1.6, then each Indemnifying Party shall contribute to the
amount paid or payable by such Indemnified Party as a result of any
claim in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party, on the one hand, and the Indemnified
Party, on the other hand, with respect to such offering of securities.
The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact
relates to information supplied by the Indemnifying Party or the
Indemnified Party and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such untrue
statement or omission. If, however, the allocation provided in the
second preceding sentence is not permitted by applicable law, then
each Indemnifying Party shall contribute to the amount paid or payable
by such Indemnified Party in such proportion as is appropriate to
10
reflect not only such relative faults, but also any other relevant
equitable considerations. The parties hereto agree that it would not
be just and equitable if contributions pursuant to this subsection
1.6(d) were to be determined by pro rata allocation or by any other
method of allocation which does not take into account the equitable
considerations referred to in the preceding sentences of this
subsection 1.6(d). The amount paid or payable in respect of any claim
shall be deemed to include any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or
defending any such claim. 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. Notwithstanding
anything in this subsection 1.6 to the contrary, no Indemnifying Party
(other than the Company) shall be required pursuant to this subsection
1.6(d) to contribute any amount in excess of the net proceeds received
by such Indemnifying Party from the sale of Registrable Securities in
the offering to which the losses, claims, damages or liabilities of
the Indemnified Parties relate, less the amount of any indemnification
payment made pursuant to subsection 1.6.
(e) The indemnity agreements contained herein shall be in
addition to any other rights to indemnification or contribution which
any Indemnified Party may have pursuant to law or contract and shall
remain operative and in full force and effect regardless of any
investigation made or omitted by, or on behalf of, any Indemnified
Party and shall survive the transfer of the Registrable Securities by
any such party.
1.7 Information by Holder. Any Holder or Holders of Registrable
Securities included in any registration shall promptly furnish to the Company
such information regarding such Holder or Holders and the distribution proposed
by such Holder or Holders as the Company may reasonably request and as shall be
required in connection with any registration, qualification or compliance
referred to herein.
1.8 Rule 144 Reporting. With a view to making available to
Holders the benefits of certain rules and regulations of the SEC which may
permit the sale of the Registrable Securities to the public without
registration, the Company agrees at all times to:
(a) make and keep public information available, as those
terms are understood and defined in SEC Rule 144, after 90 days after
the effective date of the first registration filed by the Company for
an offering of its securities to the general public;
(b) 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 (at any time after it has become subject to such
reporting requirements); and
(c) so long as a Holder owns any Registrable Securities, to
furnish to such Holder forthwith upon receipt of a written request a
written statement by the Company as to its compliance with the
reporting requirements of said Rule 144 (at any time after 90 days
after the effective date of the first registration statement filed by
the Company for an offering of its securities to the general public),
and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), a copy of the most
recent annual or quarterly report of the Company, and such other
reports and documents so filed by the Company as the Holder may
reasonably request in complying with any rule or regulation of the SEC
allowing the Holder to sell any such securities without registration.
11
1.9 Transfer of Registration Rights. Holders' rights to cause the
Company to register their securities and keep information available, granted to
them by the Company under subsections 1.2, 1.3 and 1.8, may be assigned to a
transferee or assignee of (i) at least 100,000 shares of Registrable Securities
(as adjusted for stock splits, stock dividends, recapitalizations and like
events), (ii) the transfer is in connection with the transfer of all the
Registrable Securities of a Holder (including by way of transfer of a Holder's
Common Shares), or (iii) to any constituent partners or members of a Holder
which is a partnership or limited liability company, or to affiliates (as such
term is defined in SEC Rule 405) of a Holder, provided, that (a) the Company is
given written notice by such Holder at the time of or within a reasonable time
after said transfer, stating the name and address of said transferee or
assignee, and identifying the securities with respect to which such registration
rights are being assigned; (b) the assignee or transferee of such rights agrees
in writing to be bound by the terms and conditions of this Agreement, and (c)
solely as to transfers pursuant to clause (iii) above, any transferees or
assignees agree to act through a single representative. The Company may prohibit
the transfer of any Holders' rights under this subsection 1.9 to any proposed
transferee or assignee who the Company reasonably believes is a competitor of
the Company, or when such transfer may violate applicable securities laws.
Notwithstanding anything else in this subsection 1.9, any Holder may transfer
rights to a transferee of a Holder's Registrable Securities (or Common Shares)
if such transferee is a partner, member or shareholder or a retired partner,
member or shareholder of such Holder.
1.10 "Market Stand-Off" Agreement. Each Holder hereby agrees
that, during the period of duration (not to exceed 180 days) specified by the
Company and an underwriter of common stock or other securities of the Company
following the effective date of an IPO or reverse merger with a public company,
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, pledge or otherwise
transfer or dispose of (other than to donees who agree to be similarly bound)
any securities of the Company held by it at any time during such period except
common stock included in such registration. In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions with respect to the
securities of the Company held by any such Holder (and the shares of securities
of every other person subject to the foregoing restriction) until the end of
such period.
1.11 Delay of Registration. No Holder shall have any rights to
take any actions to restrain, enjoin, or otherwise delay any registration as the
result of any controversy that might arise with respect to the interpretation or
implementation of this Section 1.
1.12 Termination of Registration Rights. No Holder shall be
entitled to exercise any right provided for in this Section 1 at any time, and
the obligations of the Company to a Holder under this Section 1 shall terminate
with respect to such Holder, when such Holder may sell all its Registrable
Securities in a three (3) month period under Rule 144 of the Act (whether or not
such Registrable Securities are then held in the form of Common Shares).
12
2. Affirmative Covenants of the Company. The Company hereby covenants
and agrees as follows:
2.1 Annual Financial Information. The Company shall deliver to
each Holder of at least ten thousand (10,000) (as adjusted for stock splits or
recapitalizations) Registrable Securities (a "Qualified Holder") as soon as
practicable after the end of each fiscal year of the Company, but in any event
within 90 days thereafter, statements of operations, shareholders' equity and
cash flows of the Company for such year, and a balance sheet of the Company as
of the end of such year, such year-end financial reports to be in reasonable
detail, prepared in accordance with generally accepted accounting principles
("GAAP"), and audited by independent public accountants selected by the
Company's Board of Directors.
2.2 Inspection. The Company shall permit each Qualified Holder,
at such Qualified Holder's expense, to visit and inspect the Company's
properties, to examine its books of account and records and to discuss the
Company's affairs, finances and accounts with its officers, all at such
reasonable times as may be requested by the Qualified Holder; provided, however,
that the Company shall not be obligated pursuant to this subsection to provide
access to any information which it reasonably considers to be a trade secret or
similar confidential information.
2.3 Termination of Information Covenants and Confidentiality of
Information. The covenants of the Company set forth in subsections 2.1 and 2.2
shall terminate as to the Qualified Holder and be of no further force or effect
when the Company first becomes subject to the periodic reporting requirements of
Section 12(b), 12(g) or 15(d) of the Securities Exchange Act of 1934, as
amended. Each Qualified Holder agrees that it will keep confidential and will
not disclose or divulge any confidential, proprietary or secret information
which such Purchaser may obtain from the Company, and which the Company has
prominently marked "confidential", "proprietary" or "secret" or has otherwise
identified as being such, pursuant to financial statements, reports and other
materials submitted by the Company as required hereunder, unless such
information is or becomes known to the Qualified Holder from a source other than
the Company without violation of any rights of the Company, or is or becomes
publicly known, or unless the Company gives its written consent to the Qualified
Holder's release of such information, except that no such written consent shall
be required (and the Qualified Holder shall be free to release such information
to such recipient) if such information is to be provided to a Qualified Holder's
counsel or accountant (and the provision of such information is directly
necessary in order for such recipient provide services to Qualified Holder), or
to an officer, director or partner of a Qualified Holder, provided that the
Qualified Holder shall inform the recipient of the confidential nature of such
information, and such recipient agrees in writing in advance of disclosure to
treat the information as confidential.
2.4 Issuance of Additional Units. If the Company fails to either
have the registration statement declared effective within 120 days of the date
hereof, or become a reporting issuer in a province in Canada, then the Company
shall issue to each Holder, without additional consideration, that number of
Units equal to 10% of the number of Units purchased by Holder pursuant to the
Subscription. No fractional Units will be issued and the number of Units to be
issued to a Holder shall be rounded down to the nearest whole number.
13
3. General.
3.1 Waivers and Amendments. With the written consent of the
record holders of at least a majority of the Registrable Securities, the
obligations of the Company and the rights of the parties under this Agreement
may be waived (either generally or in a particular instance, either
retroactively or prospectively, and either for a specified period of time or
indefinitely), and with the same consent the Company, when authorized by
resolution of its Board of Directors, may enter into a supplementary agreement
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement; provided, however, that no
such modification, amendment or waiver shall reduce the aforesaid percentage of
Registrable Securities without the consent of all of the Holders of the
Registrable Securities. Notwithstanding the foregoing, subsections 2.1, 2.2, and
2.3 may be amended only with the written consent of the Company and a majority
of the shares then held by Qualified Holders. Upon the effectuation of each such
waiver, consent, agreement of amendment or modification, the Company shall
promptly give written notice thereof to the record holders of the Registrable
Securities or Qualified Holders, as the case may be, who have not previously
consented thereto in writing. This Agreement or any provision hereof may be
changed, waived, discharged or terminated only by a statement in writing signed
by the party against which enforcement of the change, waiver, discharge or
termination is sought, except to the extent provided in this subsection 3.1.
3.2 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of Nevada without regard the principles of
conflicts of law thereof.
3.3 Successors and Assigns. 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.
3.4 Entire Agreement. Except as set forth below, this Agreement
and the other documents delivered pursuant hereto constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof, and this Agreement shall supersede and cancel all prior
agreements between the parties hereto with regard to the subject matter hereof.
3.5 Notices, etc. All notices and other communications required
or permitted hereunder shall be in writing and shall be delivered by overnight
courier service or mailed by first class mail, postage prepaid, certified or
registered mail, return receipt requested, addressed (a) if to any Purchaser, at
such party's address as set forth in the Company's records, or at such other
address as such party shall have furnished to the Company in writing, or (b) if
to the Company, at such address as the Company shall have furnished to the
Purchaser in writing.
3.6 Severability. In case any provision of this Agreement shall
be invalid, illegal, or unenforceable, the validity, legality and enforceability
of the remaining provisions of this Agreement or any provision of the other
Agreement s shall not in any way be affected or impaired thereby.
14
3.7 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
3.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
----- SIGNATURES ON NEXT PAGE -----
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date set forth underneath their respective signatures below.
"COMPANY"
Calibre Energy, Inc.,
a Nevada corporation
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
-------------------------------------------------
Xxxxxxx X. Xxxxxxxxx, Xx.
President
Date: April 18, 2006
"HOLDER"
If Holder is an individual, sign here: /s/
---------------------------------
(Signature)
Print Name:_______________________________________
If Holder is a company, trust or other entity, sign here:
Print Entity Name:________________________________
By:_______________________________________________
(Signature)
Print Name and Title:_____________________________
16
